Technology moves fast and big organisations can struggle to keep up. Startups provide access to cutting-edge tech and undiscovered talent in areas where established vendors can struggle.
Startups can spearhead innovations, but their unique benefits come with unique risks. We review the best ways to assess startup solutions and integrate them into your organisation.
1. How CIOs can work with startups: Scout the market
Analyse the state of your industry and goals of your company and find and follow any relevant startups. Pinpoint the emerging technology trends and the startups driving them through analyst reports, incubators, universities and industry news, or through a network that meets regularly to discuss startup solutions.
Identify the venture capitalists that specialise in the area of technology of interest and attend regular events in the ecosystem so you can get in early before the market consolidation.
2. How CIOs can work with startups: Make a strong business case
Startups can give an edge over your rivals in technology and talent. It could benefit the company by supporting research into new tools as a means to establish the emerging customer needs and to provide advanced technology before competitors can get it.
Establish the business case for involving the company, whether it's the talent they provide or the solution it offers. Startups can boost your own status as an innovator as well as your company's, but if they can make your reputation, they can also break it. You may be better served licensing the product than investing in it as a partner.
3. How CIOs can work with startups: Do your due diligence
Evaluate the financial position of the company by reviewing cash flow, backers, current contracts and R&D expenditure. Speak to the customers and investigate the founders to make sure they have a track record of commercial success and a background of expertise, as business abilities and technology innovation don't always go hand-in-hand.
The solution itself is the most important factor, so look into how far developed the concept is and whether it is at a stage at which deployment is realistic. If possible, go onsite to have a look at how the company operates, and assess the product through trials prior to implementing it in full.
4. How CIOs can work with startups: Assess integration
Staff will need to be trained in the solutions the startup provides, vendors will need to be managed and any customer service provided as necessary. Startup staff may be fulfilling multiple roles, so resources can be stretched and will require ongoing review.
These are areas that can be more difficult to manage with emerging companies offering new solutions, so ensure the responsibilities are assigned for all of the requirements, and that arrangements are determined before contracts are signed.