We all frequently hear about startup company collaborations. But are we aware of startup-startup efforts? Especially when both companies are still at the startup level, this situation could mean that products may not reach their final form and resources that enable self-sufficiency may be difficult to obtain. This could give rise to the idea of collaboration. Is this a good idea? Is it a good method to further enhance current technologies and help strengthen the startups behind them? We asked our Deep Tech Pioneers community personal experiences, the pros and cons of this collaboration model, and tips for successfully working with other startups.
Here are Key Takeaways:
FOUNDER PERSONAL COLLABORATION STORIES
The CEO of microelectronics manufacturing company Atlant 3D Nanosystems, Maksym Plakhotnyuk, emphasized that he has had very positive experiences with collaborations with other startups and that Atlant 3D's core technology was developed thanks to a collaboration with a startup.
“We are always looking for complementary technologies. Consultants often tell us this: 'Don’t try to collaborate with other startups.' But this often varies from person to person. We had very positive experiences. We developed our core technology with another startup. They risked their time and effort, and so did we by taking the risk of failure. As a result, we succeeded, and that’s why we are here.
This also creates a really great opportunity to advance further in the industry and combine innovations that no one has yet implemented. We are working with companies that make sensors with AI solutions, and it’s great to see new ideas emerge from this. More practically, entering collaborations can also mean being able to take advantage of public funds that encourage and enable such collaborations.”
AI Redefined Co-Founder Dorian Kieken states that the advantages of startup-startup collaborations largely depend on the type of company. He noted that for AI Redefined, startup collaboration is inevitable and that this approach is a good strategy for higher quality projects.
“Our preference is to collaborate with very large companies that can do everything or with medium-sized companies where we can provide complementary value. Our platform helps people get trained in AI and our goal is to design collaborations that will engage the broader audience. I understand why this can be complex for other companies and why operating with a very vertical understanding, besides establishing your company alone, may be better.
We are currently in talks with a France-based startup called Delphas based in Bordeaux. Their expertise aligns very well with what we do. Overall, we have very large-scale projects, and there are many obstacles at the entry stage. On one hand, we need expertise in simulations and visual capabilities, while on the other, AI expertise. Therefore, it is not unusual for us to collaborate with another startup working in one of these areas. This way, we can achieve large-scale projects together that we cannot accomplish alone.”
The Co-Founder and CFO of Aircision, Betsy Lindsey discussed the importance of trust at the center of the relationship and face-to-face communication with partners.
“Startup collaborations in deep tech are about trust. Covid slowed down some of these collaborations because, as a hardware company, we really needed to meet face-to-face with people to understand how our technologies actually support each other's goals – not to mention validating a concept. At Aircision, we are working on creating future-ready optical wireless telecom systems that will provide 10 times the current bandwidth in wireless networks. We want to ensure that we are using energy-efficient technology components. Fortunately, we have a network of people in our ecosystem in Eindhoven who understand this.”
On the other hand, Daniele Ramirez, COO of the exoskeleton company AGADE, had a rather complex experience.
“Working with a startup is like playing Russian roulette; you either win and gain a great partner to share your journey with, or you spend too much time trying to get things back on track.”
Often, startups have not finalized their products. Therefore, you have to take your chances. Combining the technical knowledge of two deep tech ventures into a single solution is groundbreaking, but because you are designing two things at the same time, it requires doubling the workload. Ultimately, what really matters is how both sides react.”
The CEO of nanofiber production company Gelatex, Mari-Ann Meigo Fonseca, acknowledges that such collaboration has its pros and cons, but emphasizes that collaboration is the key to success.
“It’s easier and faster to work with newly established companies because we speak the same language and are used to getting things done quickly. Additionally, startups are often very transparent and honest. Finally, less bureaucracy means more actual work. The downsides can be financial limitations and therefore limits on what can be done. There may be more uncertainty about whether the other party will continue the collaboration or even survive in a year or two.
Startups are often warned about IP protection, and there is immense pressure to have all IP in-house, constantly applying for new patents, etc. This can restrict collaboration and slow down innovative results. I would like to see more open collaboration among startups. We have the task of convincing companies that collaboration is the key to success, and we’re pleased to see many starting to change the mindset of doing everything alone.”
ADVANTAGES AND DISADVANTAGES
Indeed, there are many pros and cons when it comes to working with new ventures. To provide you with a better overall perspective on what to expect, we have compiled some of the other key points described by our founders of Deep Tech Pioneer below.
Pros of Collaborating with Startups
The CEO of advanced space weather monitoring company Mission Space, Ksenia Moskalenko, stated that working with startups is great in terms of flexibility, speed, and motivation. She noted that sharing insights and maximizing collaboration is much easier since both sides experience resource creation, market determination, product fit, etc.
The CEO of microsats monitoring Earth's temperature ConstellR, Max Gulde, reflects on the value of speed. Compared to working with larger corporations, collaborating with startups can lead to much faster outcomes.
Toothpick Project’s Co-Founder and Director Claire Baker said: “We saw that we could align objectives and reduce burdens. We can work with similar networks to share best practices and services. For example, we are currently working with another initiative to reduce unintended negative outcomes that their programs are creating on our end.”
Cons of Collaborating with Startups
The CEO of green systems developing Manastu Space, Tushar Jadhav, mentioned the following drawbacks: “Working with startups can lead to very rapid changes in plans and generally, both ventures may be inexperienced in infrastructure, so they might tend to make the same mistakes.
Volt14 Solutions, co-founder Animesh Jha, particularly noted that this could mean both parties’ priorities and timelines may be reduced or postponed.
The CEO of SkyEcho, Yann Dufournet, providing extreme localized rainfall intelligence, said, “The main disadvantage is that the flexibility of the venture can be constrained by financial shortcomings limiting the outcomes of collaborations.”
Enerpoly Communication Strategy Director Sahitya Yarlagadda, “Startups seeking quick results sometimes begin a concept without resolving issues in the idea or without good planning. Yarlagadda warned that we need to go back and prevent those errors. “Working with a startup is not always comprehensive, and implementation can take more time.”
After all this, you might be wondering: Should you collaborate with another startup, or shouldn’t you? As you’ve heard from the founders themselves, there is no single answer to this question. The answer can vary based on various factors including: the type of company or the type of technology you are developing, your company's overall vision and goals, the objectives of the potential collaboration, the capabilities of the other party, as well as what you can realistically offer in the collaboration.
TIPS FOR A SUCCESSFUL COLLABORATION
If you are considering collaborating with a startup now or in the future, here are some valuable tips compiled from the founders’ insights that can help you lay the foundation for a successful collaboration:
Alignment is important, so ensure that you share a common vision and similar values with the company you plan to collaborate with.
Verify that you have the same bandwidth to complement the collaboration.
Provide commitment with strong economic incentives embedded in the collaboration for both sides.
Set clear goals, roles, and responsibilities for each company.
Mutual trust and transparency are crucial, so be honest with your partner company about your capacities and limitations.
Maintain regular communication with your partner throughout the collaboration and plan for some face-to-face meetings.
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