We’ve previously written about the things that kill corporate innovation on medium.com. Number 2 on that list was 'You’re stuck in your own bubble.' It’s easy to get comfy in your corporate office, with the colleagues you’ve known for years, all standing around drinking the same Kool-Aid.
But if your corporate innovation efforts so far have been 'meh,' it’s time to add a little startup juice.
Here are 6 ways to engage with startups and reap big benefits from it.
One of the easiest ways for corporations to get some startup juice is to engage startups through events. By sponsoring and participating in events like hackathons or reverse pitch competitions corporations can meet, engage with and learn from entrepreneurs and startups in their community.
During these kinds of events, teams of designers, marketers and developers come together for to pitch ideas and build functional prototypes for new products and businesses. They are also a great way to network with talent and to learn what it’s like to think, move, and execute at startup speed.
Events like hackathons bring communities together and offer ways for folks to experiment and work with new ideas and teams in a non-traditional format. While hackathons are often associated with creating tech-based solutions, we’ve seen a variety of new hackathon formats for folks to “hack” together ideas and solutions. Events like ProtoHack offer code-free hackathon for non-technical entrepreneurs. Events give you insight on how outside thinkers address the problems your customers have, allowing you to see through the inevitable blind spots in your internal thinking. Events like these also can help you identify and hire local tech talent.
Corporations can actively find and support new startups by sponsoring or spinning up an accelerator. Sprint sponsors an accelerator focused on mobility innovation. The L.A. Dodgers sponsor one focused on technology that enhances sports and entertainment events. Kaplan sponsors an accelerator focused on education technology. Nike and Virgin have sponsored others. That’s pretty good company to keep.
Sponsoring an accelerator allows corporations to engage early with the very entrepreneurs who will be disrupting their market in the future and gets them access to the accelerator’s mentors and advisors.
Disney sponsored a TechStars startup accelerator that hosted Sphero in the fall of 2014. As part of the program, the accelerator offered each of its companies a 15-minute meeting with Disney CEO Bob Iger.
During Sphero’s meeting with Iger, they got the idea to put a head on one of their existing products, a little robot ball. And a Disney star was born. Sphero’s BB-8 was an official Lucasfilm-licensed toy for 'Star Wars: The Force Awakens.'
Sponsoring a coworking space is also an effective way for your employees to get out of their bubble and learn side-by-side with more nimble entrepreneurs. The open, fast-paced atmosphere in coworking spaces fosters communication and innovation. Corporations can create coworking spaces themselves by carving out unused space in their building and offering it to the community or partner with local coworking facilities to provide access for their employees to be a part of the scene.
Johnson & Johnson has a coworking incubator space called JLabs, which provides early-stage companies access to its research facilities, financial support, office space and administrative support. JLabs promises a no-strings-attached arrangement, with 'no first look, no first right of refusal and no equity assigned to Johnson & Johnson.'
This arrangement allows Johnson & Johnson to learn from, and keep tabs on, innovators in the health-care sector, including medical devices, pharma, and consumer and digital health.
If you don’t want to set up an in-house coworking space, you can send some of your employees to an outside coworking space. Large operations like WeWork — or smaller ones like Lincoln, Nebraska’s, FUSE — rent out blocks of space or even single desks by the month (or the day), so the cost, commitment and risk is low. If it’s not working for you, you can quickly downscale or exit.
But the potential payoff is high: Your corporate employees will be exposed to a wide variety of people working on a wide range of products, and they can share skills and expertise and put their brains together to solve problems.
Many established corporations, including Fortune 500 companies, are becoming interested in this option and are fueling the coworking boom.
Startup Support Programs
This technique is ideal for companies that want to engage startups very early and offer support services that help them grow — and then turn them into big customers. You can offer administrative, legal, marketing, accounting, mentoring and other support.
Google does this with its Google Partners program, which gives small businesses resources, support and training, including access to Google experts, and Google for Entrepreneurs, whose mission is to 'provide financial support and the best of Google’s resources to startup communities that equip and nurture entrepreneurs.'
The benefit to Google, besides growing future customers, is getting early access to the new products that startups are building, innovations they wouldn’t necessarily see coming. This can lead to partnerships and acquisitions.
You can create a separate entity (or startup) within your corporation, license IP for startups to build off of, or launch a joint venture with another company.
All three options allow corporations to engage with the startup community, gain access to different customers and ideas and even navigate regulatory issues.
Creating or facilitating separate ventures can mitigate risk, so a bad bet doesn’t pull down the core business, and can keep outside investors from getting jumpy. In a separate venture, you also can try building a different work culture, and if the entity becomes big enough, you can spin it off.
Investments & Matchmaking
Rather than trying to build and grow a startup spinoff yourself, many corporations are actively investing directly in startups at the earliest stages for ROI returns or merger and acquisition options in the future. Creating a venture arm (akin to creating an angel or micro-VC fund) can help find appropriate matches to invest in or identify merger and aquisition candidates as well as open up conversations with startups at an earlier opportunity.
If you don’t want to dive in with the full commitment to seek, scout, manage, and evaluate new startups opportunities, companies like Econic and others offer 'matchmaking' services that leverage research and networks to access and evaluate startups on behalf of your firm.
For some corporations, the right solution might be just one of the above. For others, it might take more than one initiative to kickstart innovation.