Corporations, Startups Bring More to the Table Together Than Alone

Goliath had massive size, fearsome strength, and an established reputation as a dominator. David had courage, cunning, and precision weaponry. Just imagine what they could have accomplished together!

Forget David versus Goliath—David and Goliath is the innovative new idea in town.

Locating the synergies and combining the strengths of large CPG companies with small, imaginative, scrappy startups is a new notion challenging the conventional thinking that small companies have an edge over large companies in innovating and bringing new products or technologies to market quickly. Rather, large companies, with their greater ability to fund and bear the risks of taking a chance on something new, can join forces with agile startups that have developed close relationships with their customers to create a new force for market innovation.

Putting this idea forth at the IFT FIRST closing keynote panel on July 19, moderator Charlotte Allen, founder and CEO at Rebel Success for Leaders, asserted, “We are the ones who are the difference-makers going forward.”

The transformation is already underway, said Lara Ramdin, chief innovation and science officer for Upcycled Foods.

When she worked with Dole, Ramdin said, “We were very honest with ourselves that we were very good at what we were doing for a long time, but if we were going to expand [into new areas, such as functional foods], we were never going to be able to do it on our own.” It’s smart, Ramdin said, for a company to assess what capabilities they do and do not have. Large companies should ask themselves if they want to build something new or join with someone (such as a startup) who already can.

“If you’re working in a startup you’re ideally placed … to do the really disruptive stuff … and the really risky stuff.” The larger company, Ramdin added, “can keep doing what it’s doing to generate the big revenue.”

In his capacity as investment director for DSM Venturing Firmenich, Arpesh Metha supports startups with funding, resources, expertise, and mentoring.

“We serve financial as well as strategic mandates,” said Metha. “For every deal we do, we strive to generate those benefits on both sides.” Beyond the financial return on investment, the company looks to encourage, advance, and elevate innovation efforts to the next level.

Firmenich “really embraces this David and Golaith” concept, said Metha. In addition to investment capital, the company offers support services for resources, distribution, manufacturing, supply chain management, regulatory and R &D, all of which is very important for start-ups because scaling in the food industry can be resource-intensive, he adds.

CEO and founder of Radices Bio Carmen Schicklberger, whose company produces novel food ingredients for next generation foods, envisions teaming up with a corporate partner.

So far, her company and its nimble team have used obstacles as learning opportunities and pushed forward in technology and product development innovation advancements. “We really want to have a strong data package and bring a maximum amount of value to the table.”