#Asia How ‘born globals’ dance with ‘gorillas’ to punch above their weight

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Dancing with gorillas refers to startups partnering with large companies, in particular, multinational corporations (MNCs), says Dr Shameen Prashantham

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The author Dr Shameen Prashantham is Associate Professor of International Business & Strategy at China Europe International Business School. He has also published a book based on his research between startups and multinationals called Born Globals, Networks and the Large Multinational Enterprise.

I have been studying how two very different types of companies — startups or ‘born globals’ and MNCs — engage with each other in both the West (especially the US and UK) and the East (especially China and India) for about a decade now.

Some ‘born globals’ internationalise rapidly, and successfully leverage relationships with large multinationals to facilitate this process.

During the early stages of my research, I once asked the late Professor CK Prahalad, a business expert, what he thought of the scope for startups to engage with large multinationals. His immediate response was: “Many of these small companies have no choice but to learn to dance with big gorillas”. I immediately latched on to that phrase!

Dancing with gorillas refers to startups partnering with large companies, in particular, multinational corporations (MNCs).

I recently published a book targetted at other academics, based on this research, titled Born Globals, Networks and the Large Multinational Enterprise, which was released during the Academy of International Business conference in Bangalore.

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And three key insights for entrepreneurs from this research include the following:

Be proactive in recognising the opportunity to harness globalisation

More than at any point in history, ‘gorillas’ aka multinationals are now genuinely interested in engaging with startups. It wasn’t always like this. When I started my research in 2002, I could barely find any multinational with a structured partnering programme targetted at young companies at home or abroad.

This changed over the next few years as multinationals recognised that they could not be self-sufficient in generating novel ideas, and that startups were great at doing this.

Today, many multinationals offer a range of startup engagement mechanisms from mass partner programmes to selective incubators.

Be discerning in order to leverage the right opportunity 

Just because an opportunity exists does not mean that it is guaranteed to work out. Entrepreneurs have to be discerning in how they engage with multinationals. In one sense, discernment in this context entails figuring out which partner is most appropriate to its strategic intent.

Another facet is ensuring that its interests are protected, which may call for clever co-optation of local allies (for example, mentors from respected incubators or VC firms). Yet another aspect of this is learning as much about the partner as possible to have a realistic understanding of what is and isn’t likely to be feasible.

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Learn from gorillas so you can better dance with them 

Large multinationals can be an effective source of new business opportunities and revenues, but typically there are limits to how helpful they can be in this way.

In the long term, new ventures will accrue important benefits if they adopt a learning mindset and seek to learn new capabilities through observation of, and joint activity with, large multinationals. Also, partnering with multinationals is a skill, and startups can become better at this over time – if they consciously make the effort to reflect on their partnering experiences and talk to mentors periodically.

Thus, associating with multinationals involves considerable skill and effort, but the payoff can be considerable for new ventures if they can pull it off. Such startups harness globalisation to punch above their weight. It’s a worthy goal for ventures with high aspirations in terms of innovation and internationalisation.

The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at writers[at]e27[dot]co

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