Large organisations are engaging startups in growing numbers, due in part to a realisation that companies have not been built to respond to the accelerating pace of change in a timely manner, and that short of restructuring the entire organisation from the ground up, partnering with startups who are unencumbered by bureaucracy, short-term shareholder demands and employee incentives, is an easier way to tap into emerging technologies, business models and talent.
This makes sense for most large organisations given that startups tend to explore disruptive innovations - usually low margin, small market and high risk to begin with - don’t support short term and often large company growth targets, but if left unchecked, may be the source of dwindling market share a few years down the track (here’s looking at you Blockbuster for passing up the opportunity to buy Netflix for US$50M - the company is today worth 140 times that).
Below are eight ways that corporates can connect with startup ecosystems and engage startups to work collaboratively towards their mutual goals - some light touch and others that require a more serious commitment of time and money.
A corporate accelerator program pairs the domain expertise, resources, brand, distribution channels and networks of a large organisation together with the talent, speed and unencumbered nature of a startup, in order to leverage their respective strengths to take startups from zero to one.
Programs generally run for about 6 months while the startup incubation periods tend to run for 8-13 weeks.
Cost: 9/10
Pros:
Cons:
Requires a considerable amount of effort to source quality entrepreneurs and nurture them throughout a 13-week program which necessitates legals, branding, funding, workspace, mentors, event management, workshops and diligent guidance throughout (a growing number of organisations with domain expertise have been established to run accelerator programs on behalf of large corporates).
Examples:
Recommended Reading: Corporate accelerator programs
You’ve heard of startups pitching their ideas right? Reverse pitching essentially turns the table on startups and asks corporates to pitch the problems they want startup teams to solve and offer a pathway to funding and partnering.
Cost and Effort: 5/10
Pros:
Cons:
Examples:
Recommended Reading: Why Your Startup Needs to Reverse Pitch
An open innovation program poses a simple request of startups, entrepreneurs (and employees, customers, partners, academia and the general public) - “give us your ideas on topic X”.
These programs tend to be run online, supported by an idea platform like Spigit, and can often elicit hundreds of ideas which then lend themselves to subsequently engaging with the people behind the top ideas.
Cost and Effort: 7/10
Pros:
Cons:
Examples:
Recommended Reading: 4 Ways to Win at Open Innovationand Inside Procter & Gamble’s New Model for Innovation
The WorkFlow podcast is hosted by Steve Glaveski with a mission to help you unlock your potential to do more great work in far less time, whether you're working as part of a team or flying solo, and to set you up for a richer life.
To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.