How start-ups successfully organize and manage open innovation with large companies

Abstract

Purpose Open innovation in start-ups is a relatively unexplored field and studies focusing on collaborative innovation between start-ups with large companies seen from the former’s point of view are virtually inexistent. The authors address this gap in an exploratory study built on in-depth case studies. The purpose of this paper is to illustrate how start-ups successfully organize and manage open innovation with large companies. The paper highlights common challenges and barriers faced by start-ups in adopting open innovation practices along with its benefits for them. Design/methodology/approach This is an exploratory study based on two case studies. The cases are diligently selected to examine two key forms of open innovation – inbound and outbound open innovation – in start-ups. Findings The paper provides an insight on how start-ups organize and manage open innovation activities with large companies and how it benefits them in overcoming liability of newness and smallness. The practices significantly differ from those followed in large companies. The paper highlights the advantages and challenges of inbound and outbound open innovation for start-ups. This paper also ascertains the crucial role of start-up manager for successful implementation of open innovation and shows how start-up’s managers with prior experience of working in/with a large company can proficiently deal with the larger counterpart in the innovation network. Research limitations/implications This research is based on exploratory case studies so the conclusions drawn from these two cases may be hard to generalize. The findings of the study could be used for further development of the theoretical framework. Future research, including quantitative studies, will be helpful in examining the conclusions and providing more in-depth understanding of open innovation in start-ups. Practical implications The paper includes several practical implications for the managers including the role start-up managers play in organizing and managing open innovation activities. Furthermore, this paper suggests how start-ups could orchestrate open innovation ecosystem. Originality/value The paper is a step forward in filling the literature gap about open innovation and start-ups with some definite implications for start-up managers. A lot is written about the collaboration between large firms and start-ups from a former’s point of view but the start-up’s perspective has been left unexplored.