As I discussed in my recent blog Disrupt or be Disrupted, large corporates in all sectors increasingly need to be investing in innovation and becoming technology companies in their own right if they are to future proof their business.
Global tech accelerator Startupbootcamp is proof that enterprises are waking up to this fact. It has engaged more than 100 corporates with start-ups across 14 accelerator programmes, ranging from FinTech to FoodTech.
We wanted to explore the drivers behind this in more detail and so invited Andy Shannon, Startupbootcamp’s Head of Global, to tell us more.
1) What is driving big corporates to collaborate with start-ups?
Companies become ‘big corporates’ for a reason – they’ve discovered a business model that works and have been able to successfully scale their operations through a systematic approach to growth. Policies, procedures, reviews… all of these competencies create big companies that are excellent at executing a specific business model.
But what these big companies aren’t designed to do is search for new business models, and often fail when they try to do so. However, this is exactly what start-ups need to be structured to do, as they search for a market fit for their product.
Bringing start-ups and corporates together allows both side to learn from each other. Corporates can better understand how to be nimble, fast and embrace failure. Start-ups can better understand how to implement procedures to effectively scale an organisation once they find a product-market fit.
2) Are big enterprises truly embracing disruptive tech, or are they just paying lip service?
There are certainly good examples of corporates that embrace disruptive tech. Whether that is through R&D budgets, acquisitions or pilots, corporates as a whole have been dramatically increasing their innovation activities in recent years.
Some industries are also better than others at embracing innovation. Within traditionally agile industries top performers have typically adopted new digital technology, while laggards have failed to adapt and overhaul their organisation quickly enough.
Something that does happen is that more traditional ‘marketing’ budgets are allocated to the innovation space to promote innovation. While this may be great in certain instances to help start-ups with exposure, it doesn’t typically address the core difficulties of that corporate needing to alter its internal systems to adequately work with innovative companies.
3) Which companies are doing corporate innovation right?
From an external perspective it’s difficult not to point at companies like Google and Salesforce that have allocated billions of dollars to the innovation space. These organisations have committed huge amounts to both investing in start-ups and acquiring them. Whether they’re doing innovation ‘right’, only time will tell…
In the long term, the corporates that are successful with innovation will probably be those that are committed to aligning their internal interests to adopting technology, creating agile systems and having simple processes in place to appropriately work with start-ups. From an external perspective it’s difficult to evaluate which corporates are doing this most successfully, but we do hear of one-off examples where these types of practices are being put in place.
4) What’s in it for start-ups? Is it just a route to acquisition or will this actually give them opportunities to scale and grow in their own right?
The start-ups I’ve worked with typically struggle with one of two things – customer adoption and revenues. The right type of partnership or pilot with a corporate can immensely speed up the process of acquiring customers and gaining revenue. The difficulty is understanding which corporates to work with and how to go about developing a business relationship with them.
Wildfire is currently working with Startupbootcamp to highlight the work of the start-ups and partners engaged in its programmes, and raise awareness of the growing need for traditional corporations to collaborate with innovators.
To find out more about how Wildfire can help your organisation position itself for the future, please get in touch.