“Large companies are actually fertile ground for innovation; they just need to know how to cultivate it”. This is one of the strongest messages of the book Corporate Explorer. Big corporations play a crucial role in innovation and, if working together with startups, they can be an Avant-guard force.
Fashion Big Corporations
But, wait… startups and big corporations working together? Does it sound right?
Well… the answer to these questions is just one: This not only sounds right, but it’s also the solution for the future!
LVMH is an example of this. The group partners with small companies and, together, they share the same ambition and values: “to be creative and innovative, to deliver excellence, to cultivate an entrepreneurial spirit, and to be fully committed to positive impact”, says Laetitia Roche-Grenet, Director of Open Innovation at the group.
Laetitia shared with us how these partnerships can be transformative, both for large companies and small businesses. In other words, it’s a win-win strategy and people need to know more about it.
Big Corporations & Startups: A Must-Have Collab
Do you think your company is too small to build a lasting partnership with a big company? Know that the number of partnerships between startups and big corporations has grown. Certainly, it brings benefits to both sides. Small businesses gain experience and notoriety, expand their horizons, and large corporations gain agility and speed to find innovative solutions for their businesses.
However, starting this path is not so simple: it is necessary to seek ways to establish this connection and, thus, present your company. That is to say, the startup needs to show that it is prepared and excels in what it does. It must clearly demonstrate the advantages it has to offer, and how it can add value by partnering with a large company.
There are different ways to tighten the bond between these two ends. There are competitions that big brands open to select partner startups. Also, a startup can organize a deck and a pitch and present themselves to companies they believe they can contribute to. The possibilities are endless. At this point, being attentive to the market and creative are the differential.
Understand the differences & partnership formats
The structure of a big corporation is extremely strong and organized. On the other hand, concerns about process safety, for example, can make the steps of a future partnership a little more bureaucratic. There are more levels in the hierarchy and people who analyze and decide actions, which includes, for example, the task of closing a partnership.
In any case, it is important to emphasize that each company works in a different way. Therefore, each partnership does too. That is, some large corporations establish exclusive partnerships so that startups cannot work with other companies. Meanwhile, others determine a more flexible model, so they don’t work so closely together, but have some projects together.
Partnership models have occurred through service provision contracts, product acquisition, or just access to the company’s network for the development of tools.
Txhe main reasons why executives and large companies sought interaction with startups are:
- Look for innovative solutions for opportunities in your company
- Discover new ideas and innovations
- Help entrepreneurs develop their businesses
- Accelerate internal and innovation processes
- Look for investment opportunities
Partnership benefits for startups & big corporations
- New opportunities: when a small company manages to close a deal with a large company, it opens the way to seek other strong customers. The professionals and managers of a large corporation start to have more confidence in a startup after it is a partner of another business of the same size. Furthermore, it is also possible to demonstrate that it has the structure, processes, criteria and virtues to maintain satisfactory service and generate results.
- Learning: partnerships between startups and large companies provide baggage to all small business professionals, who learn a lot, both from the partner organization (complex processes, major objectives, rules and laws, specific care, greater requirements.) and from their actions. As a result, everyone is more quickly prepared to deal with the requirements and specifics of growth.
LVMH & Startups: Walking Hand-in-Hand To Grow & Innovate Together
LVMH Moët Hennessy Louis Vuitton SE, or simply LVMH, is a French holding company specializing in luxury goods. Moët et Chandon and Hennessy groups first merged to form the holding and, later, the resulting group with Louis Vuitton.
We exclusively interviewed Laetitia Roche-Grenet, Director of Open Innovation at LVMH. She shared with us a little more about how the program works.
Read the full interview below!
Fashinnovation: How is LVMH’s work with startups established and done?
Laetitia Roche-Grenet: “A little context helps to understand how LVMH operates. LVMH is the mother company to a very large Group – the largest in the luxury industry. It includes 75 companies, called Maisons. Each Maison is unique with its culture, identity and know-how, but we all share common values and ambitions: to be creative and innovative, to deliver excellence, to cultivate an entrepreneurial spirit, and to be fully committed to positive impact.
All Maisons are engaged in these efforts and so is LVMH. Our shared goal is to perform by getting closer to our customers’ aspirations, delivering the best experience online and in retail, and innovating with sustainable materials and processes.
Are there any startups that can help us? How do we get to know them, and how do we collaborate? LVMH makes sure that Maisons can discover and have access to the best startups globally, whatever their innovation needs: improving e-Commerce, finding sustainable materials for a product, etc”.
Fashinnovation: And how does this partnership work?
Laetitia Roche-Grenet: “It starts with detection. LVMH launched the LVMH Innovation Award in 2017 to celebrate innovation and meet new startups from around the world. Each year, the program receives hundreds of applications and helps LVMH discover thousands of innovative solutions. Many of them now work with the Group. The 2021 winner is Bambuser, a Swedish startup that developed a live-shopping platform used by Fendi, Parfums Christian Dior, Make Up Forever and Louis Vuitton.
Once we get to know the startups, they can be selected for our acceleration program La Maison des Startups LVMH. The program was launched in 2018 at Station F, the world’s largest startup campus in Paris. It now also operates remotely, to adapt to the Covid context and most importantly to welcome international startups.
Every 6-months, 25 new startups join the program where they meet and pitch their solutions to as many key stakeholders as possible in our Maisons. Over the years La Maison des Startups has generated over 285 business collaborations with our Maisons, which is important in such a short time”.
Fashinnovation: What’s the importance of having big corporations partnering and helping to scale up new companies in the fashion industry?
Laetitia Roche-Grenet: “Startups and large groups need each other to grow and transform, and I believe it is true in all industries. For large groups, the challenge is to access innovative products and technologies that they won’t develop in-house. A startup typically specializes in one product and technology, or one expertise, and they have to be great at it to find clients and succeed. Large groups focus on their own business and clients and don’t always have the time or resources to develop technologies that aren’t core to their business. In other words, partnering with startups allows big groups to innovate at a faster pace and create value.
But there is more than that. Collaborating with startups means so much more than just “buying” a solution: we both learn from each other. The large group accesses new technology, new culture, new working methods and agility. In this learning process, our talents also learn to act like entrepreneurs. LVMH launched DARE, our intrapreneurship program. It allows any talent in any Maison with an innovative idea to propose it, get selected and accelerate it – like a startup. We designed our department, LVMH Open Innovation, as the LVMH place to find, co-craft and produce innovative solutions via startups and intrapreneurship.
On the startup side, partnering with large groups is key to success. They gain industrial knowledge and the ability to structure for growth. And the more the startup scales, the best suited it becomes to become a great partner for the large group. It is a virtuous circle”.
Fashinnovation: What are the main necessities of the fashion industry today? How have these startups have been helping to solve them?
Laetitia Roche-Grenet: “Getting closer to our customers’ aspirations, delivering the best luxury experience online and in retail using data, innovating with sustainable materials and processes to protect resources and ecosystems… These are our priorities.
The startups we select in our programs logically fall into one of these categories: 3D and Virtual Product; Media & Brand Awareness; Employee Experience & CSR; Sustainability; Omnichannel & Retail; Operations & Manufacturing Excellence. A startup like Hipli, for example, does a brilliant job at helping brands reduce e-commerce packaging waste, with a “zipped” envelope that is reusable over a hundred times. We also work with startups developing alternatives to leather, either vegan or upcycling existing resources to limit waste. Upcycling is a huge stake for our industry. By working with startups we are finding multiple ways to bring to the conversation. Not only business but also creative!
Check out our article on how B Corp Certification can be a game-changer for your business!
