Big firms struggling to open up to collaboration with start-ups

Multinationals and large indigenous companies are failing to properly engage with tech start-ups, according to a leading business angel.

John Phelan, head consultant with Dublin BIC, a public-private support organisation that manages the AIB Seed Capital Fund, the Halo Business Angels Network (HBAN) and the Guinness Enterprise Centre, said large firms are increasingly keen to collaborate with entrepreneurs. However, he added that many experience cultural issues that stop them from truly opening up to collaboration.

“Unfortunately, when larger companies team up with start-ups, it is often not a meaningful engagement. It is superficial and, while it might sound good to shareholders and staff, the organisations haven’t really committed to the process,” Mr Phelan said.

“The question for those of us looking to bring bigger companies and entrepreneurs together is how to help those organisations create an innovation culture internally in a positive way.”

Mr Phelan, who is national manager of HBAN, was speaking as Dublin BIC revealed further details about its forthcoming FutureScope event, which takes place in the Convention Centre on May 31st. The conference, which replaces the organisation’s ‘Silicon Stroll’ bootcamp, is expected to draw 1,000 attendees to discuss how start-ups and established firms can work together.

It is supported by companies such as Google, Facebook, Vodafone, Ryanair and IBM and features a range of guest speakers, including include Realex founder and Fire Financial Services chief executive Colm Lyon, Dublin commissioner for start-ups Niamh Bushell, Boxever boss Dave O'Flanagan, Movidius chief technology officer David Moloney and the European head of Stripe, Don O'Leary.

Mr Phelan said the lack of commitment shown by some larger firms and their urge to own any collaboration was making entrepreneurs hesitant about getting into bed with them. That said, he added that there were also plenty of examples of companies who were engaging in a positive manner.

"You have the likes of Ryanair and Accenture, who are putting their money where their mouth is and taking concrete steps to create innovation hubs and they and the start-ups they engage with are gaining from the experience," said Mr Phelan.

“There are significant advantages for both sides if they can engage in true collaboration. Many start-ups don’t have the resources to scale by themselves and so a partnership model that sees larger firms helping entrepreneurs to develop products and services in return for a share of the revenues offers great rewards,” he said.