Innovation
Startups
Technology
September 01, 2025
The curse of the free PoC
In the best practice of open innovation, the ideal is that startups and corporations maintain a fair relationship
The construction of partnerships is fundamental in the innovation ecosystem for the generation of value among the agents that compose it. In this context, initial investors and clients are important parts for the gears of startups to start turning.
The credential of venture investors and companies are distinctive features that make a big difference in the entrepreneurial journey. But, to sell something in the corporate environment, it is expected that the business playbook be followed. Looking specifically at startups with solutions focused on companies that operate in the B2B (business-to-business) model, there are particularities that need to be considered so that the beginning of the relationship with clients generates more friction than revenue.
Companies that deal with companies are organizations in search of a common benefit. In this equation, it is worth remembering that startups are early-stage companies, seeking a repeatable business model, scalable, operating in an environment of risk and uncertainty. As companies that follow a path that is not usually very easy, startups must also take care to avoid some corporate “ghosts” and thus, reduce risks that are not usually so evident, such as not combining the game, acting without method, and delivering results by working for free.
Don’t lower the price, increase the perceived value
In the best practice of open innovation, the ideal is that startups and corporations maintain a fair relationship, which is productive and balanced, to favor the “win-win” between the parties involved. Unfortunately, there are still cases that do not follow this trend.
And here there is a shared responsibility, with some companies bargaining the most they can and entrepreneurs anxious to close deals at any cost — sometimes even at no cost, mobilizing their teams for free experimentation deliveries.
The promise of a big contract and the visibility that a strong brand can bring to a startup is indeed an important asset for those who are starting out and makes a big difference when it comes to opening doors. However, obtaining branding and recognition as payment is not something that makes the numbers add up in the long run.
What is given is given. If it is free, it becomes easier to break the commitment if another priority arises within an organization. Imagine, furthermore, the difficulty of a future negotiation, in which a buyer already starts from the premise that the relationship began as a unilateral and unpriced exchange. It will not be simple to adjust the perception of value for something that already started with a price of zero.
More than following the old saying — “what is agreed upon is not expensive” —, in projects that aim to assess the potential for adoption and large-scale implementation of a product, it is better that the scope, deliverables, and, especially, the values be defined right from the start, for greater effectiveness in experimenting with new technologies.
It is even possible to point out some forms of experimentation that seem to deviate from this recommendation of not offering the free lunch to potential clients. As part of the marketing strategy of some startups and technology-based companies, especially those operating in the software segment, trial, demo versions, or the freemium approach are ways to promote products through user use and interaction without charges.
However, in the vast majority of these tastings, potential clients test the products as they are already available, with limitations of some functionalities and within a determined period for consumption.
| Demonstration | It is the abbreviated form of the word “demonstration”. It means a trial or sample version of a digital product (software, game, music, etc.). Demos are usually released to leads who may be interested in trying the product to increase publicity. |
| Test | Test of a product or service for a determined period. Through this system, the user can test an application or software trial, for example, proving the benefits in practice, before acquiring it. |
| Freemium | It is a business model in which companies offer users the most basic version of a product for free, while incentivizing them to upgrade to a paid premium version that comes with additional and advanced features. |
Sharing risks and results
The risk is present in the venture of startups, and it would not be different for those who take the risk of acting with them. But there are ways and methods to mitigate this issue with the possibility of evaluating the value, the concept, and the performance of new solutions before establishing a commitment more firm between technology developers and corporations.
The PoV, the PoC, and the Pilot are the most practiced forms for this purpose. StartupBootcamp, a global network of investment and acceleration for startups, helps with the definition of these methods:
- PoV – Proof of Value (the smallest and most focused of the experiments)
- Objective: to prove the value of a solution for both the startup and the corporation.
- Commercial conditions: normally no costs; occasionally, direct costs are covered by the parties involved.
- PoC – Proof of Concept (the experiment that serves as a bridge between the proof of value and the transition to a pilot or commercial agreement)
- Objective: to carry out an operational test, on a small scale, with specific defined time and scope.
- Commercial conditions: normally, direct costs are covered by the contractor. The hiring of the PoC already involves the company’s purchasing department, but with minimal approval. The time allocated by the startup and by the corporation can be considered in-kind contribution (in-kind).
- Pilot – Pilot project (experimentation format, with pre-defined technical scope and commercial conditions, on a larger scale than the PoC, directly impacting the operation and business areas of the corporation where the solution will be applied)
- Objective: use proven results to co-create and deliver real value to the company.
- Commercial conditions: contracting and approval of the project proposal with the involvement of the company’s purchasing department and the involved business areas, due to the higher investment level and the application in an operational environment.
In the end, regardless of whether these forms of experimentation are successful or not, the two parties can benefit. On one hand, companies will have a better understanding of the investment needed for tests, and the teams involved will gain knowledge in emerging technologies and fluency for future tests with other partners. In turn, startups will be able to collect feedback on performance and user experience, capture suggestions for improvements, and gain insights into pain points that were not previously mapped.
Practice is practice; game is game
In popular wisdom, that which is very cheap is not usually well-regarded, and what is free tends to be undervalued. Also from collective knowledge comes the saying that “when the alms are too much, the saint becomes suspicious”. However, trying out the solutions of startups in offers subsidized by consolidated partners or traditional suppliers can be something interesting from the point of view of cooperation and value generation. It would be “seeing is believing” enabled by a third party, in a B2B2C (business-to-business-to-consumer) approach.
It is a way to offer market access and reduce customer acquisition costs for new entrants, mitigating the level of distrust from early adopters regarding what still needs to be proven. Of course, there is no free lunch at this table. Big techs and established suppliers may even have greater room to subsidize free trials for partner startups that add value to their offerings, but the cost is usually embedded in the fine print of commercial negotiations and in the share of sales that are confirmed. A test is a test; a contract is a contract.
Nevertheless, this triangulation example shows how open innovation translates into cooperation and results. Startups scale up, established suppliers update and complement their portfolios, and their customers experience novelties that have already been qualified.
Better PoC than never
Among open innovation practitioners in the corporate environment, there is a common understanding that experiments with new technologies should occur strategically and aligned with the companies’ objectives. Whether to increase operational efficiency with a focus on the core business, or to anticipate trends that can pave the way for new businesses or new markets.
To give a sense of how this already happens in Brazil, according to the 100 Open Startups platform, in 2024 more than 62,000 open innovation partnerships were carried out between startups and companies, resulting in R$ 10.8 billion in contracts, with a growth of 69% compared to 2023. However, for those who already use the inventive potential of startups to advance the technological development agenda, keeping one’s feet on the ground is fundamental to avoid wasting resources (money, time, and effort), to mobilize areas with adoption potential within organizations, and to engage key people to test and implement what has synergy and offers a good relationship between investment and potential return.
This posture is a way to avoid what the innovation ecosystem has come to call the “PoC factory,” where companies prioritize the innovation pipeline with various experiments, but do not necessarily convert them into practical and concrete results.
Indeed, it is a challenge for innovation professionals to manage projects by balancing the urgency to innovate, to raise awareness among people, and to prove results for solutions that are still consolidating in the market.
One way to balance this scale is to structure an innovation portfolio with short- and long-term objectives, composing a basket with two types of projects: those with quick results and those that demand greater institutional commitment. It would be something like running a marathon by doing several sprints of 100 meters, to deliver immediate value and obtain intangible, not to say political, capital necessary to proceed with initiatives of greater ambition on a long journey of transformation and promotion of the innovation culture.
Another way to give visibility to the assets generated by open innovation, which is valuable for both startups and innovation managers, is to consolidate results using a combination of quantitative and qualitative indicators. Some examples are:
- cost reduction potential;
- percentage increase in assertiveness;
- reduction in time for the execution of some activity (quanti);
- user and customer satisfaction index;
- socio-environmental compliance services;
- less exposure of workers to operational risks;
- reputational damage reduction (quali).
After all this review, it is clear that there is no ready-made recipe, much less a free one, for those who want to innovate or need to remain innovative. Looking at the current market moment, in which innovation has been relegated in corporate planning and budgeting, if you have to choose between doing the quick thing to deliver results or prioritizing the fundamentals for a relevant business case in the long term, prefer the middle ground. To go far, without ceasing to be fast.
Who wrote this column
Ricardo Campo
