Over the days leading up to Halloween, I had some to time to reflect on the existing open innovation models for corporates and startups to work together, why they should work together... and was inspired by Halloween.
Drawing Inspiration From Halloween
Visiting a really scary Halloween party with lots of terrifying costumes and loads of fun, I pondered why big organizations and small startups are so different.
I finally settled on the fact that, really often, the life cycle of a startup is like an extended Halloween party - with lots of scared faces and cruel struggles, but also high peaks of fun. Startup life can be just as scarily intense as a good Halloween party, with the founder going through huge ups and down and bringing products to market.
So what can corporates learn from this? And how can they invent in a similarly scary way?
To be as innovative as some of the most successful startups on the RocketSpace campus (alumni Uber and Spotify, for example) you have to scare the @$*%! out of the existing market and take huge risks to mix things up in big parts of the established industry.
And not only do your moves have to scare established competitors and market players, but they might even scare your startup team as well. There are times when money is short and funding doesn’t come as expected. It’s a daily fight! But as Richard Branson put it: You don’t learn to walk by following rules. You learn by doing, and by falling over. You learn by putting on your scary poker face and challenging the status quo - by actually making it happen and executing on your ideas.
4 Scary Good Open Innovation Models
1. Innovation Labs
Sometimes the least intimidating approach is to just start learning from the scary cool kids.
Many corporates work along side the almost 200 startups we have on campus. They set up their Innovation Labs (XLabs) on our campus to work with startups and learn the lean startup approach.
2. Startup-corporate Partnerships
The next nevel of engagement is when corporates and startups work together through strategic partnerships.
Those partnerships, where the startup provides its technology or sometimes its customers to the corporate, are a great win-win. In return, the corporate can provide benefits like working capital, resources or access to a bigger market.
Some take it a step further by moving into a long-term collaboration, often formed as a joint venture. Usually, RocketSpace's Corporate Services team helps the corporates identify the right startups to partner with.
3. Investments
For many corporations, the need to innovate is even more pressing and requires a constant inbound flow of innovative IP.
In this case, corporates gravitate to the supreme discipline of innovation: Investment. Corporate accelerators with a steady stream of investments in innovative technologies can act as a mechanism for scaling and systemizing a startup partnership program.
The reasons for investing can be strategic (e.g. to increase the profits of the investing company’s own business) or aimed at providing more of a financial return to drive value for the established business units of the company. Google Ventures is a good example of the latter.
4. Acquisition
Besides investing, the highest form of commitment to a startup is an acquisition.
We have seen many RocketSpace alumni get acquired by multinational corporations: Softbank bought 51 per cent of the Finnish mobile game maker Supercell for $1.5 billion, and Opera acquired mobile video ad platform AdColony for $350 million last June.
Those moves sound scary, but they give large corporates access to unique IP, the startup's team, and a scary interesting user base and revenue pool!
This is probably why companies like Softbank and Cisco - that frequently invest in innovative startups - are listed under the Top 50 most innovative companies in the world in BCG's Report, The Most Innovative Companies of 2014.
We say: no risk, no fun!
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