How does a corporate innovator approach startup sourcing and startup outreach? How does a corporation direct an innovation campaign to properly align with the technology startup ecosystem? This article discusses six proven steps to maximize your integration into the innovation technology landscape, and they are not what you think.
"We're at maybe 1% of what is possible. Despite the faster change, we're still moving slow relative to the opportunities we have.” — Larry Page
The conditions that likely made your company great— a commitment to efficiently run your processes at scale, a focus on consistency, and predictability scaling a proven model— are diametrically opposed to the conditions that breed innovation. Innovators break systems, proudly. That is the one thing you cannot have your employees doing, at least not on the job. Hence the reason most internal innovation efforts fail.
"Lots of companies don’t succeed over time. What do they fundamentally do wrong? They usually miss the future.”— Larry Page
So you might be thinking, ‘Nonsense, companies such as Google are both innovative and efficient at scale, right?’ Not so fast. As a small startup, Google was an innovative company. As it grew, Google built a machine, and machines must run. However, Google has always understood the need to innovate, so they do the next best thing. They buy their innovation. Relentlessly. Google has one of the strongest corporate venture arms in the world:
*Not pictured are countless smaller acquisitions.
Whether an employee’s pet project, a stealth 8-person operation, or a multi-billion-dollar household name, a thousand times Google saw someone doing something better than Google could do it, and a thousand times Google assumed ownership. Remove this one essential behavior, and Google is that innovative search engine you used from 2003-2006. What was before all those really good search innovations came along? Alta Vista?
How to Optimize Startup Sourcing and Startup Outreach, that Leads to Innovation Success
At RocketSpace, we have engaged with 20% of the Fortune 500 as well as countless successful startups, and we have worked out a system where we too are constantly seeking to disrupt and innovate. Follow these six steps, and you will run a world class operation bringing industry-disrupting innovations into your company.
Step 1: Know Your Outcome
The success of every future action you take is predicated on asking the hard questions. Do not skip this step.
Have you invested the time to become clear about your desired outcome? Successful startups understand precisely where they are, where they want to go, and why it’s worth the trouble. Their ambitions are affirmed or rejected quickly by market testing, and they adjust via pivot whenever necessary. The result is a laser-like focus attacking one target after another. Startups know their end game, their purpose. As such, they will be acutely perceptive of your reason for partnering, and they move far too quickly to wait around if you have not determined your objective.
So ask yourself:
- Are you simply looking for a solution to a finite operational challenge? Or are you looking to survey all the ways your current business model may be disrupted?
- Are you wanting to be the one to disrupt your business model before competitors do so?
- Is your aim to fortify your current market position, or expand either vertically or horizontally, or both?
- Are you hoping specifically to partner, invest, acquire, or absorb relevant startups? Which of these approaches will have broad support from the C-Suite on down to the people in the field? Which of these initiatives will likely receive the required resources?
Step 2: Dream Big
“To be reasonable in your search for an innovative solution, however simple that challenge may appear, is to position your solution for obsolescence before you have finished assembling it.”— David Hettena, RocketSpace dreamer
With your outcome top of mind, it is time to look at a map and identify all the ways you could get from here to there. This is the time to think unreasonably. How would Richard Branson or Elon Musk solve this problem? Remember, in one lifetime, we went from there being no airplanes, to putting men on the moon. The rate of innovation has accelerated exponentially since then. You have permission to dream big, for now.
Ask, how you would build your solution if you had access to every technology ever invented. Chances are high that any technology you would reach for already exists, or at minimum a cash-strapped engineer somewhere in the world has worked out how to build it. Your product catalog could be fed to a computer vision AI, allowing your technicians in the field to identify physical parts in seconds without printed part numbers or barcodes. Better yet, the consumer could be equipped with that same technology in their smartphone, eliminating the need for a technician to spend time doing physical diagnostic work in the first place. Every part sold could be labeled with a blockchain tag so that all relevant information and touch points could be recorded and retrieved as each component progresses through the factory to distribution, installation, repair, removal, and recycling, without a centralized owner managing a database. In this example, we have flagged computer vision, artificial intelligence, remote and automated diagnostics, and blockchain. All of these solutions are already deployed in the field, and startups are selling working solutions today.
Find a better way forward.
Step 3: Understand the Technologies
You have a list of technologies that could help you achieve your mission. Now, it is time to develop a deep and practical understanding of these technologies. Often, it’s the critical details that can make or break a project. You must understand how these technologies are deployed in a similar use case. Failing to develop this deep, practical understanding leaves to chance whether an implementation will emerge viable. How do you do this? Read. Listen. Search for PDFs and articles from thought leaders. Watch videos of conference presentations. Follow the chain of questions, ask ‘why’ repeatedly, until you can see how a solution could be built and implemented, and understand how it commonly fails.
For the example of object recognition via computer vision, do you know whether the image is processed and analyzed locally or in the cloud, or some combination of local processing and cloud analytics in order to optimize processing time? Will your remote users always have access to the requisite internet connection to operate the service? Will that internet connection have bandwidth adequate to the requirement of the solution in question? Is the existing library of images similar enough to how items look in the field to be useful? Is the analysis strategy optimized to identify the specific characteristics in common between stock photos and field photos?
The objective requires accounting for every technological variable that could derail it. Understand the technologies.
Step 4: Get Involved with the Ecosystem
Now that you know what key ingredients make a successful implementation, it is time to become involved in the emerging technology and startup ecosystem, and build up personal connections.
- Lookup events and conferences specific to your technology area(s) of focus. Plan to arrive early and leave late so you can meet people.
- Contact the other corporates that you hear about playing in the space and discuss your common challenges.
- Reach out to the Venture Capital and Angel Investors active in the niche, and see whether they might refer you to relevant startups in their portfolios.
- Contact universities with labs focused on these challenge areas, and ask whether you can contribute to their programs by providing real use cases.
- Visit relevant accelerators and incubators, and ask the participants what they find most valuable about these programs.
- Now, start reaching out to the startups themselves, and ask specifically what would be their dream corporate engagement.
You may find that players within these organizations will have as much interest in you and what you aim to do as you have in them and what they aim to do. The fact that you will have an understanding of their work down to a reasonably detailed level will make all the difference in how many people respond to you.
Tell people you meet why you are there, and ask them specific questions that interest you. ‘Who do you know that has experience with a corporate implementation of this technology?’ ‘Who do you know that is working on a breakthrough solution to this specific problem?’
Bonus: Want to take it up a notch? Look inside. Host the community with your own hackathons, competitions, challenges, events, etc., and make it worth their while with meaningful prizes and interesting speakers.
Reach out en mass to other employees within your company, and ask them whether they know of anyone innovating in the space. Maybe this is even a passionate side project for a small number of your employees.
The longer you do this, the better you will position yourself and your organization, so start today, right after you read this article.
Get involved with the ecosystem.
Step 5: Know Your Constraints
So far, we have discussed understanding what the problem is, how to design a solution, and how to connect with the people who might be able to execute.
You might feel ready to reach out to startups and start talking engagement and terms, but not so fast! Internal analysis is mandatory, as things tend to fall apart in spectacular ways when this step is neglected. Imagine a plane intending to takeoff without an equipment check, a fuel check, a registered flight plan, or clearance from air traffic control to takeoff or land.
Success belongs to the proactive. So ask:
- Do you have the required organizational buy-in? Every level and department of the company involved in the startup must be willing to face the extra work and disruption that comes with testing a new technology, from the chief decision maker all the way down to the associates on the ground who will have to embrace changes to their workflows. You must have broad commitment.
- Is your organization setup to implement and test potentially disruptive solutions? Have you assembled ALL necessary organizational elements to implement, including executive ownership, managerial oversight, budget, and alloted internal resources? Is your organization structured to allow for minimum viable product (MVP) testing, failure, and iteration, repeatedly? If not, what would have to happen internally for your innovation project to have a chance at seeing the light of day? Investing the time up front in aligning expectations and acquiring durable commitments of time and resources is one of the most important steps in the entire process.
- Have you determined that the common ground and shared vision between your organization and your outside partner(s) is substantial enough to overcome any gaps between the two operations? Or are you trying to merge two different worlds? Your team’s focus on achieving the agreed outcome typically must be more important to your team than their adherence to their legacy habits and processes. So, assuming you engage with a wonderful and competent technology implementation team, will your employees play nice and go the extra mile to support an implementation with that team? Perhaps you do not receive everything you wanted. Now, you at least know where you stand, and you can change your plan to accommodate.
Do not take this process lightly. To proceed without getting the required buy-in is to do so at your peril. Such oversights are so common that the technology startup ecosystem is littered with companies who will no longer even talk to corporates. Know your constraint.
Step 6: Engage with Startups
If you have done the above properly, then your approach is calibrated to the highly nuanced startup ecosystem, and you have a vision for how you can realize your innovation initiatives.
At last, it’s time to connect with specific startups for the purpose of assessing partnerability. It should be clear by now that it’s not what you do so much as how you do it. Here is a checklist that will empower you to maximize your impression and impact:
- Know the startup. Visit the website, review the employees’ LinkedIn accounts, research founders’ backgrounds, lookup their funding rounds, and test or watch a demo of their latest product capability (often not found on their website).
- Be very specific about your use case, and frame it to be most relevant to the interest of the startup. Offer something in return — money, users, exposure, relationships, or as a partner in development.
- Be clear about explaining who you are. Be upfront about the power, influence, and decision-making authority that you do and do not have in representing your organization.
- Be clear about your intentions. Disclose what you can and cannot commit to.
- Be clear about your project’s timeline, milestones, next steps, budget, and stakeholders.
- Have all your interview questions prepared. Plan for an hour. Be specific. Know what you care about, whether that be founder backgrounds, partnership history, or how exactly their technology works. Find out what they want out of an engagement. Literally ask, “What would your dream engagement look like with us, what would you get out of it (money, users, exposure, relationships, a partner to help you develop)?"
- Have big expectations for the technology, have lower expectations for everything else. Startups rarely have the polish of an established company.
We have discussed the process of first being clear about what you want to achieve, dreaming how you might achieve it, how these ideas become technological reality, how to connect with the owners of those technologies, how to assess what your organization can manage, and finally, how to properly engage directly with innovative problem solvers.
A word of caution: This list does entail a large and constant volume of work. It is not easy, but it is achievable; and, it is performed by many passionate individuals representing their corporations within the emerging technology ecosystem. Though requiring a meaningful investment from many parts of your company, the rewards are asymmetrical. When done correctly, the rewards exponentially outweigh the costs.
At a certain point, the cost / benefit ratio inflects, so it pays to stick with the process through to the final step. At a certain point, people start referring you, calling you, coming to you, and initiating with you. The innovations come knocking! You start having something in common with Google.
Start now! You can do it! If you prefer not to do it alone, RocketSpace can help! Located at the center of a vibrant tech community, and with substantial Fortune 1000 client experience, RocketSpace manages and delivers the end-to-end innovation process.