Difficulty in connecting between Startup & Corporates

Industry 4.0 – the golden age for the birth of a series of promising startups. With businesses around the world, they nurture the intention to “transform” by applying the Open Innovation model – finding creative ideas and solutions from outside. Startup is the new energy source of large enterprises. And conversely, big business is the foundation, the commercial developer, putting new ideas into practice. 

However, the connection between the two sides still has problems and must be clearly seen. So, let’s learn about those difficulties with BambuUP 

Problems from large corporations

The difficulty in connecting between Startups and large corporations is partly due to the lack of connection platforms between the two sides, startup support centers to meet investors, or sharing sessions about the two sides. demand from large enterprises; but in fact, this problem mostly stems from the subjective reasons of the two sides. Large corporations are still cautious, not trusting startups enough

According to Louis Nguyen, Chairman of the Board of Directors and General Director of Saigon Fund Management Company (SAM): “The limitations that prevent investors from going long distances with startups are the lack of honesty in the process. introduce the project and call for capital. Investors need this to plan correctly. However, not many projects presented insincerely, so after the appraisal round, investors were forced to part with the startup.”

In addition, to avoid the mixing of competitors, corporations need to be very careful when signing cooperation agreements with startups.

Not ready to change the operating system

Mr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry said: “Large enterprises often have too complete and professional operating apparatus… that existing framework.”

In addition, the fact that leaders do not see the need for new technology solutions and think that the company’s current apparatus is still working well is also one of the reasons for the difficulty in connecting. both sides. In the recent Virtual Talk – DISRUPTION IN RETAIL INDUSTRY, speaker Thuan Doan brought up the fact that: “In large companies, the decision makers are often the ones who don’t understand technology enough, and those who understand the technology again. no decision-making power.”

Not aware of the responsibility to support start-ups

Large businesses must consider supporting startups and small businesses as their own needs, not charity. According to Mr. Vu Tien Loc: “It seems that we overestimate the role of big businesses for startups, but technology empires are startups. As such, big businesses have to thank startups.”

“The social responsibility of large enterprises is to train generations of entrepreneurs, good businesses for the future, for the country. Carrying out the responsibility of building the next generation of entrepreneurs is the mission of large enterprises. Big businesses put entrepreneurs on their shoulders. This will determine the development of the country,” said Mr. Vu Tien Loc.

Large enterprises are often too busy and cannot arrange the time to listen to all the solutions offered.

Big business comes with a huge number of problems to solve in a day, making the opportunity for startups to present their ideas to corporations extremely limited in both quantity and time. Only really brilliant and outstanding ideas have this opportunity. After finishing 3-5 minutes of a short presentation, the chance to shake hands with a large corporation of the startup is only 10%. But the reality is that startups are still weak in pitching skills and do not have a good strategy in launching products/ideas.

For startups

There are four facts:

Afraid that my ideas will be copied by big corporations

When a startup enters the business battle, it lacks a lot, first capital, then management, production chain, market… . Of the 10 basic elements of business, startups only have one element, which is an idea. However, many startups are both looking for support in large enterprises and are afraid of being “swallowed”, “acquired” and missed the opportunity to meet with advisors and investors of leading corporations.

The solutions are still only products that solve short-term problems, not comprehensive solutions and in line with the vision of large enterprises.

From the perspective of large enterprises, their needs are very great, need comprehensive solutions to apply in practice and this is one of the huge shortcomings of today’s startups.

According to Nguyen Do Lang, Chairman of the Board of Directors of APEC Group, the biggest lack of Vietnamese startups is experience, knowledge, dreams and vision. Startups have not grasped the needs and vision of the business, so they cannot offer comprehensive and appropriate solutions.

Mr. Lang frankly expressed: “We have established a start-up fund of 5 million USD, but it is very difficult to disburse. We searched for eye strain but couldn’t find the right startup. When asked what is the dream of a startup? Children often say the dream is too small, that is to earn 1-2 million dollars in the future. While the boss of Facebook has a dream to change the world.”

Not knowledgeable enough about business, lack of confidence

Ms. Doan Thu Nga – Director of Lawpro Law Firm pointed out two common concerns of businesses when starting a business: “First of all, they are not knowledgeable about business. Most startups do not know who they supply to, where they are in the chain, so they quickly give birth and then die. The current weakness and lack of startups is the lack and weakness of information, leading to a bit of volatility that can be “broken” and “swallowed up.”

Besides, according to Ms. Nga, the second worry lies in the inside of the business, which is fear of being wrong, fear of failure, fear of losing money. Many startups fail to develop the system due to administrative obstacles even with capital.

Not many relationships

New to the business environment, startups certainly cannot have many relationships in the business world. This may be one reason why their solutions are not prioritized for review and evaluation. Not having a relationship also means not knowing how to contact the corporation, the process, etc.

So what is the solution to these problems? Follow BambuUP for updates on upcoming articles on solutions to strengthen the connection between startups and large enterprises.