One of the key findings from the Business Tech Trends study is that leading companies use partnerships to stay ahead of rapidly changing markets. They not only partner more – they partner more creatively.
To learn more, Steve Rogers, Director of the IBM Center for Applied Insights, spoke with Gina Waldhorn, COO of Evol8tion, which specializes in matching major brands with start-ups to drive innovation.
Listen to the full podcast here:
Highlights from our conversation with Gina
Partnerships are a win-win
The benefits realized by a partnership will differ between brands and startups, but both sides will find significant value in the collaboration. Brands will benefit from the speed and efficiency offered by startups’ lean approach. Meanwhile, startups can take advantage of the resources and publicity available to a bigger brand:
There were two sides of success. [For brands,] I think it was cultural: learning how to act and work more like a startup, get away from some of those big, laborious, bureaucratic tendencies that a lot of big corporations have. But also executionally, they’re really looking to do things better, faster, cheaper, and start-ups represent their opportunities to do that. So they’re really looking at how they did things in the past and how start-ups can help them do those same things with increased efficiencies …
And for [startups]it was an opportunity to continue to prove their concept, really get a solid case study and really get work with a big brand and learn from that big brand. So just the opportunity to work with those brand managers, tap into their assets and their insights was a success for them. And then also the press—so being able to have these brands tweet or post on Facebook about the startup is more press and more reach and more eyeballs on that startup than that founder alone could ever have wished for.
Partnerships help brands face disruptive innovations
Big brands aren’t reaching out to startups merely on a whim. For the most part, these are companies that have been threatened by emerging trends or technologies, and need to mix up their methodology by joining forces with a startup:
A lot of the companies who are exploring partnerships with startups are finding that their categories are being significantly disrupted by technology and usually from new competitors that they never saw coming. So you’ve got brands like Gillette who overnight are being threatened by someone like a little Dollar Shave Club that’s using ecommerce and a subscription model to steal share from Gillette who’s really owned the market for a long time. And so I think brands like that are needing to turn to up-and-coming startups in order to try to find that next potential competitor and partner with them instead of going up against them.
I think another interesting case is the gum brands. So typically gum is sold at the checkout counter. But today when someone is standing at that checkout counter they’re on the phone. So no one is buying gum anymore and all of the gum brands have seen share plummet because the mobile phone is taking eyeballs off the candy and gum section. And if you think about ecommerce and grocery shopping moving online there is no such thing as a last minute impulse purchase when you’re shopping online. So for gum brands they have to start thinking about how can technology—which in a way seems to be hurting them—probably also be their savior.
Partnerships offer speed and scale
The partnerships that Gina’s company facilitates can be extensive efforts. Often companies are looking to spend significant capital on vital components of their brand with the goal of a large-scale but speedy deployment:
One of my favorite examples is a client of ours, Mondelez International. And they really put a stake in the ground and said we want to spend 10 percent of our total marketing budget—not just digital, total marketing budget—in mobile in 2013. And they wanted to do this in order to really start to leap frog competition and keep pace with consumers who were spending more and more time on Mobile. So what Mondelez did is they took nine of some of their biggest brands, brands like Chips Ahoy! and Sour Patch Kids and the Nabisco brands, and partnered those nine brands with nine start-ups with the goal of launching nine different pilot programs in market in 90 days. And each one tested a different type of mobile technology to learn how they could go to market differently and how they could really keep pace and become more appealing and relevant to their consumers
To learn more about Evol8tion and partnerships, listen to the full discussion. For more information about how leading companies are partnering, read the IBM Business Tech Trends study and blog post on partnering strategy.
“Talking Insights” is a podcast series aimed at exploring business and technology topics through candid conversations with industry experts. Tune in to learn about everything from social business to start-up partnerships from the people who are actually doing it.