Berlin It sounds like the perfect symbiosis: A medium-sized company with experience and financial strength brings in the innovative ideas of a start-up. A cooperation between two economic forces that is intended to provide both sides with added value – what can go wrong? Practice shows: quite a lot.
Angelique Renkhoff-Mücke, Chairwoman of the Digital Council of the Confederation of German Employers’ Associations (BDA) and Managing Director of the awning manufacturer Warenma, says: “There are often a whole series of obstacles and misunderstandings on both sides.”
But she is also certain: “If the framework conditions are clear, such cooperation can be very fruitful.” In order for this to succeed, politicians are also called upon: More networking platforms and institutional meeting places are needed so that the right start-ups can meet with the merge with the right medium-sized companies. So that the business path of start-ups and medium-sized companies does not end in frustration, both sides should be aware of which mistakes could threaten success.
More innovation? Yes of course! More sales? Definitely! Changes in the company? D rather not. This attitude seems to be holding back real changes, especially among medium-sized companies. But you need it to be successful with new technologies.
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Renkhoff-Mücke says: “Medium-sized companies are often very proud of their market leadership and shy away from jumping on an uncertain horse.” The business model, which has helped the company to success over the past decades, should be questioned as little as possible .
As the founder of the start-up Kreatize, Simon Tüchelmann has a lot of experience in cooperation with medium-sized companies. His tech company has developed a platform that coordinates manufacturing capacities. An offer that is particularly interesting for machine builders.
Tüchelmann complains that for many companies, cooperation with start-ups is just another project “on top” that somehow has to be based on day-to-day business. “For many start-ups it’s the typical phenomenon: people row – but don’t have time to set sail,” he says.
Professional innovation management and the commitment to rethinking processes that have become dear to high hierarchical levels are needed.
(Photo: CHG Meridian)
Instead, what is needed is professional innovation management and the self-commitment to rethink processes that have become dear to high hierarchical levels. For example, this has already worked for Kreatize in cooperation with the mechanical engineering company Bizerba. “Because we can deliver savings quickly and concretely,” says Tüchelmann.
There was also support from the medium-sized company: Benjamin Eha, who also manages cooperations with start-ups for Bizerba as a “digital architect”, sees himself as a mediator between the worlds, who prepares topics to such an extent that the entry hurdle and, above all, the effort for the specialist departments are lower.
But the experts also see the founders as having an obligation to engage in new experiences. “Even start-ups have to try to understand the working realities of established companies,” explains Christoph Bornschein, Managing Director at TLGG, who advises companies on the use of digital technologies.
For example, when it comes to the key figures. There would be fundamental differences between young and old companies. While a start-up is primarily defined by value development, medium-sized companies look at sales and profits. “For a long time, start-ups didn’t care at all about that,” says Bornschein.
2. Too high expectations
Another danger for the cooperation lurks in exaggerated expectations. For example, many medium-sized companies would assume that a start-up already has a perfect product, says founder Tüchelmann. “But the product or service is just developing.”
But this is precisely where the opportunity lies for both sides: “If both of you set out together, the end result can only get better,” says the founder. He advises start-ups to communicate clearly that even a pilot product must be included in the budget and that it is by no means a free service.
In a study – which Bornschein and Renkhoff-Mücke were responsible for developing – the BDA-Digitalrat also advises on the cooperation between start-ups and medium-sized companies to clearly communicate expectations from the outset.
Above all, this includes keeping the goals of the cooperation in mind: Is it about opening up new markets or just a new form of value creation? Is the goal a concrete application or just a “proof of concept”?
Expectations also often differ when it comes to the question of who has the main control over the collaboration. There are often “different ideas about equity participation” and “unequal access to common resources,” writes the BDA Digital Council. Such questions should also be clarified before the start of the cooperation in order to prevent frustration.
“Digital Architect” Eha, speaks in this context of the “middle class disease”. By that he means – not in relation to his company, but to his experience and the exchange with many start-ups – lengthy work processes and hierarchical structures, the result of which is often a “purgatory of meetings”, which, however, do not lead to a purchase.
Eha therefore advises established companies to communicate quickly and clearly with the founders if cooperation does not make sense. Otherwise the start-ups would often “starve to death on the long arm”.
3. Poor communication
One of the fundamental problems with start-up-Mittelstand cooperations is that both sides do not speak the same language – and that is to be taken quite literally. While founders often come from an urban and international milieu, many medium-sized companies are traditionally located in rural areas.
More on the future of the start-up scene:
The Anglicisms and “fashionable buzzwords” of the start-up scene could therefore represent a communication obstacle, writes the BDA Digital Council in its study. At the same time, however, the start-ups would also have to get involved with the “often regionally influenced forms of behavior of family-run medium-sized companies”.
In addition to the regional problem, there often seems to be a hierarchical problem in communication. Looking at the meta level, Eha describes the expectations of some employees in classic medium-sized companies with the sentence: “We are the big ones and the others must be happy to be able to work with us.”
The BDA Digital Council therefore demands that the entire duration of the partnership must be “acted and communicated transparently and at eye level”. There is also often an age difference: Young founders often meet long-established company managers in the truest sense of the word.
However, the experts agree that the big difference between medium-sized companies and start-ups could also be a great opportunity for cooperation. Because more successful cooperation also promises an advantage for European competitiveness, according to the BDA Digital Council, in order to combine technologies and traditional know-how.
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