Spend to save

We’re publishing an open letter to industry here but we don’t want your signatures: we want you to give startups contracts, pilots and projects. If you don’t, not only will their survival be in question but enterprises will suffer from an innovation deficit for years.

OPEN LETTER: WHY INDUSTRY MUST SPEND TO SAVE OUR STARTUPS

Whether it’s using machine learning to personalise healthcare, making education more accessible or using drones to deliver supplies to where they’re needed, they push the limits of what’s possible.

And large enterprises depend on them to meet their challenges. At Plexal we know this from our work with large organisations: they come to us because they realise they can’t go it alone, and want to tap into emerging innovations.

But large organisations can’t take it for granted that they’ll always have this innovation on tap.

The pandemic has placed enormous pressure on startups – especially early-stage ones that are experiencing difficulty sourcing funding. Government support has helped ease some of this pressure, but it’s also up to industry giants to save our startups. That’s you.

1,472 startups in the UK have filed for administration, liquidation or dissolution since lockdown began – and counting. Meanwhile funding for seed-stage startups is 51% lower compared to the same period in 2019.

The government has already stated that it aims to spend 1/3 of its budget with SMEs. This is an open letter to you, the large organisation, asking you – compelling you – to buy from startups.

Bring your challenges to them, pilot new solutions and give them contracts.

If you don’t, you won’t see the impact right away. Business will probably seem quite normal – for now. But in years to come, those early-stage startups and spinouts that were just finding their feet in 2020 won’t exist. And the solutions that might have been won’t be available to you.

So we’re not asking you to lend your signature to this open letter. Adding your logo to our website won’t make a difference, but spending your budgets with startups sooner rather than later will.

The relationship between large organisations and startups isn’t always easy, of course. They have different cultures and processes, and sometimes it helps to work with a third party to make sure you’re comfortable with the risk involved in a pilot, and that any IP created is retained fairly. Make use of those third parties and lean on your networks to iron out these kinks.

With digital transformation taking place across sectors, large organisations are seeing their marketplaces change and they need to adapt or die.

This isn’t about charity, it’s about survival. Yours and theirs.

Plexal was created with this in mind. We help governments, academics, enterprises, technology service providers, charities, startups and scaleups collaborate on some of the most challenging and rewarding areas of innovation. Get in touch to see how we can help.