What can a city do for corporations <​-> startups collaboration.

The goal of this post is to describe the importance of cities in fostering collaboration between startups and large companies.

Local governments play an important role in building ecosystem of effective innovations.

How can City Hall support small companies, startups and large companies to provide value and build growth?

Firstly, think about fund of funds. Fund of funds is a kind of activity when you let other venture capitals, incubators, or accelerators to be a part of a local funds, so instead of investing directly into startups, you enable collaboration between large companies and startups by letting venture capitals to invest in funds. If City Hall enables the infrastructure, financial structure, organizational structures to open local fund of funds, you can have amazing impact on collaboration between startups and large companies.

What is this impact?

If you let venture capitals to invest in local funds with a promise that local corporations and startups will be involved as well, you lower the risk for investors because fund of funds gives faster pipeline building process. There is no need to chase many startups the same time. Fund of funds aggregates the effort and gives higher impact on the ecosystem.


Secondly, cities can support development of offline and online platforms where large companies and startups can look for mutually beneficial relationship. Ninety percent of startups die because they launch products and services nobody wants. There is no need. No demand. Platform is a great opportunity for large companies to share publicly what are their challenges, what kind of inefficiencies they fight with, and what kind of problems they would like to approach and solve. Local governments can empower leaders of large companies to unveil demand and needs which are important factors of startups growth.

“We will create a platform for you (corporation) where startups can tackle your challenges and you can share your next big thing you work on and let startup add value, where you can announce your next strategic challenge and hire startups to work on them”- this concept could be effective part of local government development strategy.

Pilots and Proof of Concepts.

The third thing is acting like piloting enabler and catalyst. Imagine that the large company has a problem with connected car sensors and there is a local startup that works on software that manages sensors. If you create the platform, a safe environment, when both parties can do proof of concept and pilot, you will be the enabler. Safe place means, government will protect both sides IP, will build fair and transparent collaboration by sharing contract templates, will provide financial assurance.

Pilots are time consuming and require talents. Government can act like coordinators as well. So, if you have an innovation managers in a city office, they can also offer their skills and time and prepare and coordinate the process of piloting, process of contracting as well as collecting documentations.

Can City Hall actually do it and is it really going to work?

There is a lot of examples you can follow and learn from. Minneapolis is conducting a lot of activities as well as Cincinnati. The last one has opened incubator when city hall, large companies and local startups are playing together innovation game. It’s called Centrifuge.

Another example is Boston. Boston City Hall and local companies conduct many different projects, one of them is “mobile city hall” concept which turned into successful venture. Mobile city halls are trucks going around the city, they stop in neighborhoods and offers direct access to civic services. The “mobile City Hall” offered 50 services and completed 4,050 transactions by the end of 2014, leading to similar programs in Vancouver, British Columbia and Evanston, Illinois. To further strengthen relationships with local startups, Mayor of the City launched StartHub program supporting entrepreneurs and fostering collaboration with large companies.

#talents, attract #talents

You can also help large companies to solve their problem of recruiting specialists, geeks and business founders. Recruiting is expensive, so if you build that platform like Boston, Cincinnati or San Francisco did, and there’s a lot of talent gathering around, you will also help large companies to meet that shortage of talented people, and you can solve the problem of HR departments.

City Mayors roll up your sleeves, you can do a lot for companies, startups and local communities.

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