How 5 Big Brands Are Partnering with Startups to Innovate

November 10, 2015

3:00 pm

According to data from the U.S. Census Bureau, 400,000 new businesses are born every year nationwide. For businesses big and small, that means 400,000 new competitors for customers, investors, employees, et al. With so many new businesses popping up and applying new approaches to old problems, older organizations are being forced to innovate or perish. The solution? Big partnerships with startups.     

In order to stay relevant in today’s business world, large and established companies must adapt to the 21st century. And accelerating innovation by leveraging startups is the key to doing just that.

In fact, IBM’s 2014 Business Tech Trends study of 1,447 companies revealed that “pacesetters” – organizations that set the pace for growth and innovation – partnered more creatively with outside individuals or companies, recruiting less-traditional partners for their efforts. This presents a great opportunity for growth, development, and recognition for startups.

Here are five examples of brands’ efforts to innovate through forming partnerships within the bustling startup community and what you can learn from them:

1. General Electric (GE)

General Electric, founded in 1892, takes an open approach to innovation by crowdsourcing product ideas – both internally and externally. The multinational conglomerate has fundamentally changed the way it does business through partnering with various other entrepreneurs and companies to drive innovation. GE explains here:

“We believe openness leads to inventiveness and usefulness. We also believe that it’s impossible for any organization to have all the best ideas…”

Realizing this, GE openly invites collaboration from innovators, entrepreneurs, and experts on a global scale to find the best possible solutions to today’s most pressing problems. Through these partnerships, GE has continued to build on its position as a leader in areas ranging from energy efficiency to jet engine design.

2. Motorola

Motorola, founded in 1928, recently partnered with crime-fighting software startup Wynyard Group to enhance its existing offering and improve its credibility in Smart Public Safety Solutions. What led to the partnership? A need to adapt to one of the latest trends in enterprise tech: Big Data analytics.

The idea is to help Motorola’s law enforcement agency clients effectively and efficiently connect data sources – from social media to criminal history databases – and turn that data into actionable intelligence. With enterprise organizations investing a significant amount in data-driven initiatives – $13.8 million on average, per large-scale enterprise – according to the 2015 Big Data and Analytics study by IDG Enterprise, it’s no wonder Motorola found the need to enhance its offerings with Big Data.

In June, New Zealand-based Wynyard completed a NZ$40 million capital raise, which will be used to invest in the company’s global growth strategy and emerging leadership position in the crime analytics space.

3. The General Educational Development (GED) Testing Service

The GED test was first offered in 1942 and reflected an industrial era – when a high school education would qualify you for most jobs. Needless to say, that’s no longer the case.  

Today, getting a high school diploma needs to be connected with entry into the 21st century workforce. To help achieve this goal, the GED Testing Service partnered with my company, Bay Area HR tech startup PathSource, to provide all GED students with a free suite of powerful career exploration tools.

For more than a decade, 65 percent of GED students indicated they wanted a job that requires further education or training after passing the test. However, less than 12 percent went on to do just that, according to research by GED Testing Service. This partnership was formed to provide GED students with access to career exploration guidance to enable them to figure out what they want to do and what educational path will get them there.

4. Disney

Disney – which is nearly a century old – is a magical example of what happens when major brands and startups work together to drive innovation. After joining Disney’s three-month-long accelerator program, robotics startup Sphero partnered with Disney in order to design and create the BB-8 droid, a robot starring in the upcoming film Star Wars: The Force Awakens.

The partnership was a win-win –Disney was able to turn a vision into reality with the help of Sphero, while the Boulder, CO-based startup received an investment of $120,000, as well as a valuable mentor in Disney CEO Bob Iger.  

5. Blue Cross Blue Shield

The Blue Cross Blue Shield Association has come a long way since it was first founded in 1929. To remain a leader within the health insurance industry, one of its subsidiaries, Blue Cross Blue Shield of Massachusetts, recently partnered with Ovuline around its Ovia apps to improve the way insurers connect with their patients.

The program enables users to choose an insurer and enables insurers to send users information tailored to them and their pregnancy needs:

“The insurance industry is trying to figure out better ways to connect and empower people,” explains Paris Wallace, CEO of Ovuline. “The Ovia app is an ideal platform to deliver that benefit info in an incredibly personalized way in a platform members are already using daily.”

What can startups learn from these partnerships?

As more and more businesses continue to pop up, it will become increasingly important for both seasoned companies and growing startups to join forces in order to evolve and thrive. Here are three lessons startups can take away from these partnerships:

  • Have common values and goals. The key to making any relationship work is to have a common vision as the foundation. Take the partnership between Blue Cross Blue Shield of Massachusetts and Ovuline, for instance. The companies were pursuing the same goal: to better provide patients with the personalized information and care they need.   
  • Timing is everything. While having the same values and goals is important, it doesn’t matter if the timing isn’t right. In order for the partnership between Disney and Sphero to take off, for example, Sphero’s product had to be fully developed and ready to merge with Disney’s latest development within the Star Wars franchise — one couldn’t happen without the other.  
  • Do your homework. As a startup, it’s your job to understand the needs of major potential partners. GED Testing Service was focused on finding a great career solution for GED students. By listening closely to their team and researching the way in which the GED impacts people’s lives, I was able to show that PathSource was the best-in-class solution to connect GED students with career and educational options.

What are some other examples of well-established brands that partnered with startups to create and innovate?

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Aaron Michel is the co-founder and CEO at PathSource, a career exploration solution helping students and job seekers make better career choices.

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