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Insights
Innovation

How to Work with the Right Startups for Your Business

Written by 
Ben Harrison
 on 
November 22, 2023
Plus X Innovation
6
 min

Collaborating and partnering with startups can be a precious tool when it comes to innovation strategy.

Members connecting at Plus X Innovation Brighton

Establishing relationships with startups and scaleups is an invaluable way to understand how your market is evolving and is sometimes a faster option than innovating internally.  



Startups are the beating heart of industry evolution. By partnering with them, corporates can gain access to cutting-edge technologies and stay ahead of the curve. As they are agile and fast-moving businesses, corporates can also learn new ways of working from these businesses and are well-positioned to take new propositions to market quickly and effectively.



However, carelessness when choosing collaborators can destroy any real opportunity for business innovation. With pressure to scout startups in line with the speed of technology development, many businesses overlook the vetting process.  



If corporates want to position themselves as key players in emerging trends and technologies, they need to embrace these developments at the source. Collaborating and partnering with startups can be a precious tool when it comes to innovation strategy.  



Establish the Quantitative Data



One core way to filter through the noise is by utilising Technology Readiness Levels (TRLs). This is a measurement system used to assess the maturity of emerging technologies during their acquisition phases. There are nine levels; the higher the level, the further developed and validated for market it is.



It is vital to know ahead of your investment that the product or service developed by the startup is directly making an impact on the target customer. Rather than opening yourself up to the risk of overselling or underdelivering, you need to see the proof of the product in action. When liaising with founders, ask them to provide evidence of:

  • Customers they have worked with

  • ROI and impact metrics from pilots

  • References from previous stakeholders





Establish the Qualitative Data

Businesses are usually sold on hard evidence, facts, and data. While these are undoubtedly vital in decision-making, determining more nuanced structural elements is equally important.  

Vision Alignment

Startups and scaleups will potentially be working with several different corporates and developing multiple projects with varying target customers at any one time. Before entering a partnership, collaboration or acquisition, ensure that your vision for the project is aligned. Clarify the goals and objectives of the venture and nail down the details together.


Expectation Alignment

Expectation alignment can be one of the most common pitfalls for corporate-startup relationships. Startups work very differently from corporates, and corporates often learn from their agility. However, a balance needs to be struck, and a clear outline of expectations from both sides needs to be determined.  



Don’t be afraid to clarify the finer details of components such as timelines, budgets, processes and stakeholders. These can make or break the success of a project.



Be Mindful of Over Prescribing


Whilst making big decisions for your business needs parameters, be careful not to make it too difficult for startups to work with you. Remain open to working with startups at all levels, and don’t set unnecessary red tape. Explore potential, regardless of how much traction the business currently has in the market.



By establishing rigid expectations, you risk detracting from your goals. You’ll end up working with more established businesses that may have less space for innovation, giving you less competitive advantage over early-stage disruptors.



If you’re unsure as to how to make a final decision, consider using small-scale pilots to quickly run tests. Focus on a small area of the business to test for three to six months and set fixed objectives with distinct milestones and clear ‘go / no go’ points of decision making.



Case Study: Southern Water


Southern Water is responsible for providing the water supply to 2.5 million customers and managing wastewater for 4.5 million people across Hampshire, the Isle of Wight, West Sussex, East Sussex and Kent. Bluewave is Southern Water’s internal innovation consultancy, created in 2017 in anticipation of rapid growth and innovation needs.



Plus X Innovation was selected as the ideal partner for finding a high-performing and innovative supplier with a relevant solution. Through Plus X Innovation’s network of innovators and startups, Bluewave would be able to access interesting solutions and technologies that were not on their radar and would extend their own network and supplier base.


The challenge



In 2011, the government transferred ownership of 154,000km of sewers across the UK to public ownership. Southern Water’s assets increased by as much as 50%, with 40% of their newly acquired sewer network unmapped and ‘missing’.

Having such a large percentage of its assets unmapped meant that Southern Water was incurring large additional costs and issues with future planning due to unknown customer locations.  


The process


The challenge scoping phase allowed Plus X Innovation to understand the challenge and the existing solutions deeply. By engaging with key stakeholders, challenge champions, and decision makers across Southern Water, Plus X Innovation was able to critically understand the internal needs and barriers, find the relevant solutions with future pilot and partnership potential, and define the process to take the project forward.  



After a deep-dive session with stakeholders, 1Spatial was selected for its proof-of-concept trials. – 1Spatial



The solution


1Spatial has asset inference software, an advanced rules-based data modelling system based on market-leading 1Integrate technology.

They were chosen with the aim of proving that an evidenced-based and automated approach to mapping the remaining sewer network would be possible and less costly than traditional surveying techniques.  

1Spatial’s technology was chosen to further test after the initial concept trial. After this, a business case was built for further internal funding to embed the technology.  


Having worked in the water industry before, onboarding 1Spatial was straightforward as they already understood the intricacies of internal corporate processes and how to navigate this relationship.



The results

  1. After an original quote of £54 million for mapping the network, Bluewave partnered with the startup after a successful pilot and secured £1.5 million of internal investment from Southern Water to use the technology to solve their challenge.  
  1. This resulted in increased internal credibility for the Bluewave team within Southern Water, having delivered a successful partnership that sped up innovation and cut costs.
  1. Through introducing Bluewave to 1Spatial, an organic working group of key players in the water industry has formed who now collaborate to identify opportunities for the sector to innovate and develop.
  1. Partnering with Plus X Innovation, and subsequently with 1Spatial, has meant that Southern Water has saved a huge £52.5 million through using new technology.






How to Start Scouting and Vetting for Startups

Taking the plunge into startup culture is equal parts daunting and inspiring. Cut through the clutter and connect directly with those who can benefit you:

  • Explore partnerships with local or national universities that are relevant or adjacent to your industry.

  • Expand and cultivate your innovation network. Reach out to peers in your industry and establish working groups for you to strategize and ideate together.

  • Pinpoint the needs of your business and ideal solutions, no matter how farfetched or seemingly negligible they might be.

  • Look for industry-related events and networking opportunities. Places like Plus X Innovation have tailored events and programmes specifically to connect corporates and startups.

  • Utilise databases and directories that offer financial information on hundreds of thousands of startups. Crunchbase and Pitchbook are good places to start.

  • If you don’t have time to sift through, think about using a third-party specialist or platforms that utilise AI to connect businesses together, such as Novable.

  • Establish some sensible and realistic vetting criteria for your business. Think about things like your current capacities and competitive landscape to refine your needs.


If you’re looking for space to innovate or want to connect with exciting innovators at the leading edge of their industries, book a tour of a Plus X Innovation hub in London, Slough, or Brighton.

Ben Harrison

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