Startups and middle-sized companies do not always necessarily get along well together. The human factor is usually the key to successful collaboration.

Midcap companies and startups: the two sides of a collaborative process

Startups have just about had enough of incubators.” Or so Daniel Benchimol, the President of web development agency Digiplace, argued in an interview (link to an article in French) with French weekly business magazine Challenges a month ago. However, it was also just a month ago that the second season of the ‘Innov&Connect by BNP Paribas’ accelerator drew to a close. This programme is designed to pair up startups with midcap firms in order to apply innovations developed by the former to the needs of the latter and at the same time enable the startups to draw on the experience of the larger companies. Supported and assisted by L’Atelier BNP Paribas through the WAI (‘We Are Innovation’) centres, the pairings were able to make great strides together with their ventures, ambitions, and common values. However, we may ask ourselves how you can get midcaps and startups to work well together and what role the human factor play in the equation. And what sort of relationship can we expect to be created between two types of company that look so different on paper?

We bring you some answers from those involved in the process. During six months of working together, we saw three types of collaborative relationship formed, depending on the background and the needs of the two partners in the pairing. All these have been highly successful.

Commercial collaboration reinvented – Cémoi and LaCoolCo

The story of this collaboration was born of a very specific need. The Cémoi Group, a French maker of chocolate and confectionery has always used traditional methods to ensure the quality of a highly demanding ingredient – cocoa. Methods of growing cocoa have not been standardised, and both the climate and the technology in use impose their own strictures. So Cémoi decided to team up with LaCoolCo, a French startup which develops smart data analysis tools for monitoring plant growth. The two partners have taken their collaboration much further than a mere client-supplier relationship. Underlines Cémoi Chief Executive Tristan Borne: “For us, sponsoring a startup was almost a matter of strategic positioning. We wanted to experience from the inside what was being deciphered around us. We were looking for a startup that could deliver on two counts: a product in line with our expectations and good interaction between the two sets of staff. The trap we could have fallen into was that the startup might simply become a service provider.

So managing the relationship between a startup and a midcap is sometimes a delicate balancing act. Explains Tristan Borne: “There was one moment when we felt that the relationship might tip over. If that had happened, we would never have learned what we’d been hoping to learn. The venture could have been run by our Agronomy department. But we selected people who were not from Agronomy, so that they could start to talk and ask each other questions that they had never thought of before. We wanted Cémoi to be a flagship for agility and demonstrate that it’s possible for established players to become agents of change.

According to Tristan Borne, becoming an agent of change is all about interpersonal relationships. He reveals: “Both parties wanted to make people – and the way they do things – central to the whole project. We shared common values with LaCoolCo, including a modest attitude and a profound respect for both the Ivory Coast planters and our customers. Both parties were also very open-minded. You have to accept that there might be other ways of looking at things, other areas of added value.

A mentoring relationship – Naturex and Lumiere

Naturex, a company based in the southern French town of Avignon that produces specialty plant-based natural ingredients, decided to impart some of its corporate wisdom and manufacturing expertise to French startup Lumiere, which has invented a connected diffuser to dispense essential oil fragrances. Benoit Brochet, a Key Account Director at Naturex, explains their relationship: “We were able to coach Lumiere as part of our innovation programme, entitled Ingenium. We wanted to use digital technology to connect with our customers but also to spruce ourselves up in startup mode. First, we set out to understand Lumiere’s environment and its goals. Coaching was then the second step. What Naturex was able to bring to Lumiere is rigorous project execution –  scientific rigour rather than emotional drive, because a startup is a firecracker fizzing with energy. We helped Lumiere channel all that energy by bringing our manufacturing knowhow to the table. And Naturex put their people in touch with the right contacts in the raw materials field.

Benoit Brochet also sees interpersonal relationships as key to successful collaboration. “Human relationships can't fit into an Excel spreadsheet. But if things go well on a human level, the rest is just organisational. With Lumiere, we worked so well together that it felt as if we were working on an in-house project. We didn’t treat our startup partner like a sort of foreign body but as part of our own organisation. After all, a midcap is basically a startup that has done well. It’s like a small oak that has grown from the cutting of a larger oak. We basically have the same entrepreneurial genes. That’s why we got on so well,”  he enthuses.

A P2P relationship – Pierre Fabre and Sensorwake

The Pierre Fabre – Sensorwake pairing arose from a common desire: to develop together an innovative product by drawing on their synergies. The idea was to apply Sensorwake CEO Guillaume Rolland’s olfactory products in the flagship fields of dermo-cosmetics specialist Pierre Fabre – namely cosmetics, pharmaceuticals or paramedical products. Christophe Guillot recounts his experience: “We took on a human adventure, a peer-to-peer project with win-win objectives. This type of collaboration is basically a matter of trust, it’s about people. If you don't allow yourself to work with someone, it’s just not going to work out. I would almost go so far as to say that it’s like a marriage – it’s based on trust, listening to one another, respect. Above all, the midcap has to be able to get outside its role, to break down the customer-supplier relationship. Guillaume Rolland taught us humility. At the age of nearly 50, I set aside everything I thought I knew. Sometimes you have to know when to leave off your jacket, your suit and your tie when you’re face-to-face with a young man of 19 who has so much to offer.

Conclusion: collaboration is first and foremost about people!

Many incubators in France offer pretty much the same services. Startups hear a lot of promises, but they rarely manage to get real value out of it. Incubators often do no more than just provide premises free-of-charge, without any real support,” points out Emmanuel Touboul, Head of Acceleration Programmes at L’Atelier BNP Paribas, adding: “A young startup needs a lot more than that if it’s going to find its market.‟ And the prime differentiator at ‘Innov & Connect’ is its personalised service. Stresses Touboul: “Our accelerator focuses all its energy on handholding the startups. We try to understand them, unravel their problems, help them define their objectives and above all never foist a solution from one startup on to another because the situations, skills and markets will never be exactly the same. […] This acceleration programme really injects some momentum into the startup-midcap collaboration, not least by taking off all the cultural brakes on collaboration.

So it is clear that a tailored approach is the key to successful collaboration between midcap and startup, but the other advantage which startup people, midcap staff and the ‘Innov & Connect’ team all talk about is human relationship. Emmanuel Touboul concludes: “When a large firm works with a startup, the human equation is absolutely fundamental. If the two parties don’t share the same values, there’s no chance that the collaboration will work. The two won’t understand each other and will end up having less and less respect for each other. If the midcap cannot open up and show some respect, and the startup has no patience or understanding, then they will never be able to move forward in the same direction”.

 

 

 

 

By Laura Frémy
Journalist