Interactions between startups and corporates often fail to produce meaningful results. Some internal changes can help - but is achieving a breakthrough possible without digital assistance?
Corporate venture funds (CVCs) often struggle to significantly impact their parent companies’ growth. There are a few ways to make it work better internally, but an external platform could really revolutionise the process.
Startup success captivates large company CEOs. Who wouldn’t be intrigued by the entrepreneurial mindset that fuels fast-growing businesses, with a fraction of traditional R&D and go-to-market investments? And who wouldn’t be seeking to infuse some of that innovation and agility into their own corporate strategies?
I have worked on partner innovation at some of the world’s largest companies, including names like Mars, Danone, Novartis and Pepsico. Over the years I have seen many organizations introduce various innovation vehicles like venture funds, accelerators, incubators, intrapreneurship, and startup programs to boost the innovation pipeline, and ultimately growth.
But, as Capgemini found, despite massive efforts 90% of innovation labs fail to deliver on their promises. And investments in startups are frequently not followed by an acquisition or contribute to growth as expected.
Because corporations themselves are not in the right mindset for change, this often creates a ‘two-speed’ trap: one side of the company driven by agile, disruptive innovations, while the other – core business is focused on optimizing current operations.
While technology and innovation became essential for growth, hacking a way through internal inertia was for me one of the most frustrating, yet rewarding challenges.
Create a “case for change”
With experience, I learned how to accelerate a “case for change”, build strategic alliances, and align on a single agenda in weeks rather than months. Before embarking on disruptive projects, I would ask myself and the team: “How might we inspire others to take action now?”
Here are five levers that you can pull for this:
- Executive sponsorship leads the way: When leaders champion and reward experimentation, creative problem-solving and value delivery thrive.
- Strategic alignment is a golden rule: Ensure innovation hubs objectives clearly align with strategic business priorities to drive internal change and performance.
- Experimentation for all: Make experimentation part of everyone’s yearly goals, across all functions.
- Streamlined collaboration: Adapt open innovation and corporate venturing processes, decision tools, and governance for automation and efficiency.
- Measure what matters: Customise metrics to match your unique goals for measurable impact.
Simplify the collaboration framework.
The other part of the problem is creating a framework that makes it easier for startups to collaborate with large companies. When I first started work in this field, corporate-startup partnerships had little chance of success. The gaps between goals, cultures, and ways of working were enormous, with no one knowing how to build a common ground.
On the corporate side we knew how to work with large enterprises, capable of meeting our commercial terms (120 days payment terms!), legal requirements (exhaustive 89-pages contracts) and ambiguous decision-making processes. Without hesitation, we applied the same principles to startups.
We ended up in a paradox: we aspired to co-create with agile players while imposing inflexible ‘big is always beautiful’” rules.
Frustrated, many startups moved away to more comprehensive partners. This was a strong signal for us to simplify our collaboration framework.
One thing that helped us a lot was listening to startups feedback and employing a design-thinking approach with founders as our users.
We then assembled a team of experts from various departments — legal, procurement, digital, and finance and gave them a clear mission: break the old rules and make collaborations with startups more mutual.
At first, our discussions revolved around risks, but within a few weeks, we created a new playbook with streamlined processes and decision-making. The results were significant:
- We attracted more startups from the ecosystem.
- We facilitated internal collaborations.
My message for new open innovators and corporate venturers: think of startups as if you’re recruiting the best talent. Then, create an experience that showcases your ambition to attract and work with top-notch candidates.
The more systematic and data-driven your approach, the greater the results.
A new approach
Learning, exploring, and transforming as part of global organizations has been fascinating for over 20 years. Yet, obstacles I saw in corporate – startups collaborations sparked my entrepreneurial passion. Discussing them with peers, I identified the core issues: a lack of a systematic approach, automated processes, and dynamic decision-making tools. I felt there was a gap in the market for a platform that would take even more friction out these relationships, which is why we founded Innopearl, an end-to-end platform for open innovation and venturing.
Today, neither large companies nor startups have any more patience for slow, inefficient, and unpredictable collaboration processes and outcomes.
Just as LinkedIn disrupted professional networking, and Airbnb transformed the travel experience, Innopearl aims to revolutionise open innovation and venturing.
With the Innopearl platform’s systematic approach, users can create a startup pipeline, evaluate, and choose suitable partners, and manage their portfolio, all within a single “CRM” tool tailored to the company’s specific needs.
We are passionate about helping entrepreneurial talent from large companies and startups deliver meaningful value through partnerships.
Our initial priority is to cover the needs of large companies in Europe. We have created working groups with industry thought leaders and subject matter experts from the food, beverages, beauty, and consumer health sectors and used their feedback to build the functions and features of the platform.
Many of these companies have already expressed interest in piloting or adopting our platform, and even suggested referrals to their network.
Success for us will mean creating long-term partnerships with users. On a broader level, we will have succeeded if we see the adoption of open innovation growing as well as seeing more corporations investing into startups.
Challenges like fixing our food system and combating climate change will require collaboration between emerging and established companies. My 20-years experience of corporate transformation has taught me that when such collaborations succeed, it feels magical. With Innopearl I aim to make this magic the new norm.
Olga Guerous is an entrepreneur and the founder of Innopearl, the world’s first platform for Open Innovation and Venturing. Previously, Olga held senior roles at Danone, Novartis, PepsiCo, and Mars, where her entrepreneurial mindset helped to accelerate companies’ transformations through external innovations and partnerships.