During our recent TechCrunch Mobility gathering, we had the opportunity to speak with Amy Gu, founder and managing partner of Hemi Ventures, Olaf Sakkers, a founding partner at Maniv Mobility, and Reilly Brennan, the founding general partner at Trucks VC. Our conversation covered a broad spectrum of topics, ranging from the complexities of U.S.-China relations to the mobility sector’s increasing utilization of SPACs as a means of bringing capital-intensive businesses to the public market.

We also explored the dynamics of partnerships, specifically focusing on how emerging startups can assess whether a large corporation seeking information – and potentially making an investment – is a genuine ally or a potential competitor.

The venture capitalists we spoke with indicated that collaboration with larger, financially stable companies is now essential for mobility startups.

Brennan recalled providing early funding to May Mobility, an autonomous shuttle company, and joining its board. He noted that the company initially aimed for independent operation upon its founding in 2017, a strategy shared by other companies at the time, such as Cruise Automation and NuTonomy.

Currently, Cruise operates as a subsidiary of GM, and NuTonomy was acquired by automotive supplier Delphi just four years after its launch. “Launching a structured robo-taxi service today presents significant hurdles without a substantial manufacturing partner,” Brennan explained. He further highlighted Toyota Motor Corp.’s $50 million Series B investment in May Mobility last December, encouraging the audience to watch for the outcomes of this collaboration.

Gu concurred that “partnering” represents the most viable path for startups, citing the continued progress of major automotive companies even throughout the pandemic. She referenced Ample, a portfolio company of Hemi Ventures developing battery-swapping technology, and its recent partnership with Uber, which is committed to achieving a zero-emission platform by 2040.

“Another company within our portfolio established a partnership with Tesla during the COVID-19 pandemic,” Gu added, characterizing this trend as beneficial for startups.

Regarding potential drawbacks of these large-scale partnerships, including those with Amazon – known for its assertive business practices – Sakkers acknowledged the concerns. He also advised startups to maintain a realistic outlook, recognizing that a current partner could evolve into a future competitor.

“For entrepreneurs engaging with companies like Amazon or other highly successful organizations, there’s a significant potential for benefit, whether through acquisition or a lasting partnership,” he stated.

However, he cautioned, “These companies also represent a competitive risk, and it’s crucial to acknowledge that and avoid overly optimistic expectations.”

Brennan, whose portfolio includes two companies partnered with Amazon, suggested that ignoring Amazon could be detrimental. While acknowledging Amazon’s demanding negotiation tactics in commercial deals, he emphasized its influence as a cultural trendsetter. He noted that the expectation of two-day delivery has become commonplace in the U.S., and Trucks VC anticipates this will evolve to one-day and then same-day delivery within the next five years.

Whether to partner with Amazon or not, Brennan argued, understanding that “Amazon’s strategic decisions significantly shape the direction” of the mobility industry is paramount.

Describing the company as “vital,” he pointed to its competitors to illustrate his point. “Companies like Walmart, which operate further down the supply chain from Amazon, typically implement similar strategies approximately 24 to 36 months later.”