How startups and researchers can partner to foster innovation

How startups and researchers can partner to foster innovation

Why it is smart to start investing in the stock market?

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Should I be a trader to invest in the stock market?

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What app should I use to invest in the stock market?

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Is it risky to invest in the stock market? If so, how much?

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Tell us if you are already investing in the stock market

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There’s a significant amount of data and research looking at how startups and corporates can collaborate. Accelerator programmes, investors, incubator programmes, VC funds are all often cited as key partners and stakeholders to help startups grow. However, what about research organisations and universities?

In many sectors, such as healthcare, it’s common for startups to collaborate with research centres and universities. This type of collaboration presents several key benefits for both sides. In this article, we’ll look at what those benefits are and how to ensure these collaborations are successful.

A win-win situation for startups and researchers

A common goal: innovation

Startups and researchers both typically aim to push innovation and make new discoveries. However, research isn’t a linear process. There are pitfalls and challenges that come up and slow down progress. While most universities and research entities already work with industry leaders and corporates, startups offer a different advantage here. This advantage is a stronger grasp on innovation, something startups also offer in the context of corporate-startup collaborations.

Among the many reasons to work with startups are their:

- access to the latest technologies on the market,

- efficiency in product development,

-  faster R&D cycles,

- and their adaptability.

All of these factors contribute to making startups pioneers of innovation. Startups and researchers can thus pool their expertise to help create cutting-edge innovation and garner results faster.

Pooling your networks for greater visibility

Startups and researchers can benefit from each other’s networks. Each party will likely have access to investors, corporate entities, technical or market experts and other contacts that could prove to be invaluable resources. This benefit is at the core of most partnerships.

Having the right contacts can have a fundamental impact on a project’s trajectory. Business networks are a key element in launching and running successful startups. In fact, they’re one of the criteria Early Metrics looks at when rating a startup. Startups and researchers collaborating could be a way of acquiring new contacts that could help with the technical, strategic or financial aspects of a project.

Bolstering your branding and credibility

One of the most obvious benefits for a startup collaborating with a research organisation or university is boosted credibility. When a startup is launched, it is typically starting from nothing. Unless the startup’s team includes high profile individuals, or it's a spin-off from another company or university, the project doesn’t have much credibility in its early days. It has to build that credibility through results over time: securing highly reputable investors, garnering impressive results in pilots or tests, signing high profile clients, etc. This process can be enabled by developing partnerships with key players such as researchers.

Indeed, when a startup partners with a reputable research entity or university, this partnership can help reassure potential clients or investors. It demonstrates the project is valuable and trustworthy enough for reputable researchers to get involved.

On the other hand, it helps researchers show they’re staying on top of innovation and branching out to work with up-and-coming companies that have fresh ideas.

Better access to data and resources

Startups can be a great source of invaluable data for researchers across all sectors. For example, a healthtech startup could anonymise consumers’ health data to help pharmaceutical labs with a clinical trial. Or, a retailtech startup could provide a corporate brand with data on consumer shopping habits to help them develop a new product. Because of this, you’ll often come across startups who sell data to third parties as part of their business model.

Startups, on the other hand, can benefit from researchers’ access to resources. For example, many universities provide startups with access to their labs so they can prototype products and run tests.

HR and funding benefits

Partnerships can be a cost-effective way to access talent. Entrepreneurs benefit from access to expertise that proves less costly than hiring consultants. Furthermore, researchers or students could find new career opportunities through the startups they collaborate with. This offers universities a significant perk, as employment opportunities are a key factor for prospective students when choosing a school to attend. Consistent collaborations with startups could mean providing more promising opportunities for students.

Furthermore, both sides can pool financial resources. For certain topics, there are numerous grants available to academic researchers, whereas for others, it’ll be easier to receive VC funding through a startup. Within the context of a partnership, both parties can pool their respective funding to help advance a project’s progress. For example, if academic or federal grants are lacking for a research topic being worked on, collaborating with a startup who could raise significant funding for R&D would help circumvent that issue.  

Examples of successful startup-researcher collaborations

There are countless examples of startups collaborating with research entities or universities. Here are a few that can help illustrate the rising popularity and usefulness of these types of partnerships:

  • In January 2020, Oregon Health & Science University launched a 2-year study to find connections between early cognitive decline and financial behaviour. A US-based startup, Eversafe, is assisting the study by providing data from its AI-based solution. The startup’s software helps detect anomalies in financial behaviour in real-time.
  • Semaxone partners with several academic entities to develop its augmented cognition software solution: IMT Mines d’Ales, Laboratoire Informatique d’Avignon (computer lab) and EuroMov.
  • Braingaze, one of Early Metrics’ rated startups, develops detection solutions and digital treatments for cognitive disorders. The startup collaborates with several academic entities, such as: King’s College London, Syracuse University and University of Nottingham.
  • Kiplin, which also has undergone Early Metrics' startup rating process, provides health prevention programmes via a mobile app. The startup has a scientific board (which includes researchers) to help with the development of its solution. It also collaborates with the CEA to co-develop AI algorithms for patient diagnoses before treatment or health prevention efforts.  
  • Early Metrics has an R&D partnership with Audencia. As part of this partnership, we assist with the Finance for Innovation Chair’s study of startup valuation drivers by sharing aggregated and anonymised data from our database of over 3,500 rated startups.
  • Early Metrics’ methodology is also defined largely thanks to the help of academics and researchers. With the help of our scientific committee (which includes the CNAM and Audencia), we conduct regular statistical backtesting to validate the robustness of our methodology.

Avoiding common pitfalls and challenges

Assessing the real added value for both parties

As is the case with any partnership, both parties must assess the potential added value of a collaboration. Before launching a startup-researcher partnership, there are important questions to answer such as:

  • What tools and resources can each side contribute?
  • Could they bring in extra funding for the project?
  • Can they provide relevant expertise?
  • What’s the goal and expected outcome of the collaboration?
  • What will the costs and gains of the collaboration be?
  • What are the pain points each party is facing, and how can the other party help address them?

These types of collaborations can’t just be about accessing free labour or expertise. Both sides need to have a common goal and the willingness to invest time and resources in achieving it.

Defining a clear roadmap

The academic and business worlds function very differently. While researchers are used to working on very long-term projects that can take years to complete, the business world often wants quick wins. For a collaboration to be successful, both parties need to realistically define their project’s roadmap.

The roadmap should include both short-term milestones, that could provide commercial quick wins for the startup, and long-term goals with a greater academic impact. Setting clear goals with dates in mind will help both sides easily stay on track and anticipate when delays might occur. This step is also key to plan expected funding, ensuring the project won’t run out of money as it moves forward.

The matter of intellectual property

IP is probably one of the biggest challenges when it comes to partnerships between businesses and researchers. Who owns the intellectual property? It’s often the university, research centre or a specific researcher. However, there are many options both parties can determine before entering into a partnership. The researchers can exclusively license the IP to the startup. They can also agree to sell the IP to the startup at a certain point in time. Although less widespread, they can opt to license the IP to many other players on the market, if competition isn’t an important factor to either party.

Accepting the risk

Ultimately, a partnership presents risks, no matter how much you try and anticipate all pitfalls. Working with a startup can be seen as riskier than working with corporates, as the financial reward is less secure. Startups present more risks in terms of potential bankruptcies, as their financial situation is less safe than well-established corporations. In the end, both sides must determine whether the risks outweigh the potential rewards.