When might it make sense for an organization to work with startups?

If the company’s primary problem is that it has become inward looking and does not have enough external connectivity, and it lacks the technical expertise and talent to explore new areas, then working with startups definitely makes sense.

The collaboration can take many forms, from standing up a corporate venture capital fund to invest in startups, to partnering with the startup as its first customer, to actually acquiring the startup to build a new business line with excellent growth potential. 

We have seen this model in many companies with CVC practices, such as Siemens and its investment portfolio in industrial automation startups, Procter and Gamble and its calls for startups to solve challenges, and Teradyne in its acquisition of robotics companies to build a new growth business.

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