Their models are different, their corporate cultures are sometimes in opposition, and yet it is now fundamental for large groups to embrace the levers of disruptive innovation. Startups and large companies must learn to talk to each other, to get used to each other, and finally to collaborate in a digital world where the integration of disruptive business models is often the key to future growth.

Based on this observation, many actors are setting up mechanisms to promote innovation and exchange. While the corporate startup studio appears to be one of the best solutions to meet the need for disruptive innovation, many options are commonly explored by large companies. Let us take a look at the different options available.

1- Acquire mature startups

All large companies see the acquisition of a startup as a strategic opportunity. However, the acquisition can sometimes be disappointing. This can lead to frustration. Both for the acquirer, for example, concerning slow returns on investments, and for startups, that are highly sensitive to the hierarchy of large companies and may lose what makes them strong: their agility and their creativity.

Pros and cons.

For nearly 10 years, large companies, that have historically held a dominant position in the market, have rightly perceived that the massive digitalization movement, driven by the creation of highly disruptive startups, was likely to undermine this position. These large companies have also realized that they will not be sufficiently equipped in terms of agility to take advantage of the new opportunities created by the digital revolution.

Therefore, we are in a race to buy, or at the very least, to invest! Large companies that want to find themselves a seat at the table and have significant financial resources literally want to “create a shopping list” of startups. The checkbook is open and the shopping cart must now be filled. The founders of startups see it as a very successful way to make their exit, or to acquire substantial resources to, in turn, acquire a dominant position and gain a head start over their direct competitors, who are just as disruptive and determined as they are.

Thus, when Microsoft acquired Semantic Machines for $1 billion in May 2018, the founders of the startup made an amazing deal. For its part, Microsoft wants to improve its intelligent assistant Cortana and considers it an opportunity to establish its position in language interfaces and to differentiate itself from its competitors. But the story remains to be written.

2- Create a lab

Today, almost all global groups have created innovation centers, often called Labs. In these labs, companies are trying to create disruptive offers and business models. The group creates a new division within the company whose employees collaborate on the creation of breakthrough innovation projects.

But these labs are more like a conduit between the company, startups, and universities in the region. This link makes it easier for the company to attract new talent, to keep up to date with the latest technological trends, and to gain an edge over its competitors.

These innovation centers are above all a showcase for innovation in a group, committed to presenting a digital image of the company and to recruiting and retaining rare and expensive digital talents.

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Ultimately, creating a lab makes it possible to support the company in its various transformations by bringing in new dynamism and new collaborative approaches in order to deal more effectively with the complex and transversal issues encountered.

3- Create an incubator or accelerator

The accelerator helps to advance the development of a project, i.e. to scale an idea that has already been created! The accelerator integrates the preparation and implementation of a program, usually in the short term (3 to 12 months), to support a startup in an already well-planned project. An accelerator, therefore, focuses on the startup’s operational and sometimes strategic challenges to leverage its potential for growth and create a sound foundation for it.

4- Use open innovation

Open innovation corresponds to all innovation processes based on sharing and collaboration. The notion of open innovation, therefore, implies that in its Research and Development process, the company is no longer closed off, but open to external actors.

This methodology can reduce the cost of R&D and improve the company’s innovation potential.

The challenge, in this case, is to integrate external ideas appropriately and preserve key skills within the company despite the increasing complexity of the environment.

One example among others: Audi, the car manufacturer, has lent itself to Open Innovation by launching the Audi Production Award. This is a competition that asks participants to think about the car of the future, and more generally about the future of the automobile. The winner receives a trophy and the sum of 5000 euros.

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5 – And what if, finally, we use a Corporate Startup Studio?

A Corporate Startup Studio is a company that creates startups in collaboration with large groups.

The Corporate Startup Studio, after an ideation phase, offers several domains of innovation that are conducive to the development of startups.

After discussion with the major partner group, the Corporate Startup Studio gathers the essential resources needed to launch the project.

Thus, the large company benefits from the infrastructure and involvement of the Corporate Startup Studio’s teams throughout the entire process of creating and positioning the startup, in managing its first commercial and technical developments, and in accelerating its model.

The Corporate Startup Studio is a strategic gateway to connect the structured world of large companies and the proliferation of new concepts, thus creating the conditions for optimal collaboration between these two worlds.

The Corporate Startup Studio ensures that the company implements a reliable methodology for creation.

Finally, using a Corporate Startup Studio helps to limit failures, thanks to its permanent involvement, from the ideation to the completion of the project. Wefound, in particular, is not just a project initiator. As co-founder of the startups, it is committed to their success over time, year after year.

L’article CDO: the long road to disruptive innovation est apparu en premier sur Wefound.

For a group, the co-creation of a startup consists of partnering with an external company to create one or more startups that will be dedicated to achieving a business objective defined by the group: new growth opportunities or new uses, often induced by the digital revolution.

To this end, the company collaborates with an external partner: a corporate startup studio or a consulting firm. Together, they review the needs in terms of innovation to find effective levers to achieve these objectives. In concrete terms, the group and the studio create one or more startups together.

In doing so, the corporate startup studio, a specialist in the startup ecosystem, intervenes from the very beginning of the process. Gilles Debuchy illustrates: “We work very quickly with the company, we seek to understand in detail the pain-points and the opportunities that arise for them (and for their customers), then we seek to design the right solution or solutions to meet them. This is our ideation phase. These solutions are beta tested by our teams, the startup(s) we consider to be sustainable are created, a co-entrepreneur is recruited. The startup is up and running, the process is extremely agile and fast.”

Co-creation, a promising model, a very powerful accelerator.

Aware of the need to develop disruptive innovation vehicles, groups are often uncomfortable or hindered in the internal deployment of radical innovation. They, therefore, use new processes to access this innovation model (incubation, corporate venture capital, acceleration, intrapreneurship). But today, for a group, the co-creation model seems more promising in many respects. The financial risk is reduced, and above all, the co-created startup is by design aligned with the group’s strategic objectives. At the end of the process, the company is in a privileged position to incorporate it (spin-in).

As in the traditional context of acceleration, co-creation with a corporate startup studio will provide a startup ( that is aligned with the innovation needs of a group) with the time and space to grow and mature, as well as the resources needed to accelerate its development. Ben Yoskovitz, the co-founder of Highline BETA, sums up as follows: “Co-creating with corporate startup studios makes it possible, through outsourcing, to free the constraints frequently imposed upon disruptive innovations in large organizations”. 

Faster Time to Market: a decisive factor in the success of a startup. 

Co-creation, therefore, makes it possible to limit the impact of the intrinsic inertia of these large groups on the emerging startup. “Even when we talk about “ultra-fast” developments in a large company, the time scale is measured in quarters,” says Gilles Debuchy, founder of Wefound. When for a startup, time is measured in weeks and sometimes even days. In a macro-economic environment marked by the digital transition (which many large group leaders observe with some trepidation), the ability to deploy effectively will often make a difference. That is, between the one who will become a leader and the one who will remain on the side of the road, everything can be decided around his Time to Market, and his ability to put it into action.

The Group is a predator, take advantage of its strength, but keep your children out of reach.

Like Saturn devouring his son, the multinational group can be a formidable predator, which is also its strength. The major French groups are indeed war machines. At ease with international competition, their managers are formidable hunters used to absorb their competitors, like the French champions of acquisitions such as LVMH, AXA or Bolloré. However, as they are highly normative and, above all, serene in regulated systems, large French companies are by their very nature not well adapted to radical innovation, as Amazon or Apple can be.

In this case, having the temptation to develop a startup in its midst is like asking a lioness to raise a gazelle. Of course, this could happen, but it is better if the lioness is well trained if not tamed. But in this case, the risk is that the lioness will lose her competitivity in her natural environment. And this is precisely why the contribution of the corporate startup studio can be essential if groups want to integrate disruptive innovation without compromising themselves.

L’article The co-creation of startups, the future spearhead of innovation for large groups est apparu en premier sur Wefound.

Very large companies have developed gradually since the beginning of the decade, and then more aggressively from 2015 onwards, to encourage disruptive innovation in-house: labs, open-innovations, intrapreneurship, etc. They have also invested heavily in startups. A few years later, a model has yet to be explored in France: co-creation. This is explained with the example of Bosch.

2015, the hunt for startups is open.

Disruptive innovation is a major challenge for corporations. The digital revolution has brought its share of competition in an economic world where all seemed to be well established. It must be recognized that today’s experts are unanimous in saying that all sectors of activity and all companies, regardless of their size or structure, are concerned by digital transformation and must accelerate their investment cycle. Many groups feared the Uberisation syndromes theorized by Maurice Levy, then president of Publicis. Since then, it has been a race towards digital innovation with the consequence that the hunt for startups can be considered as open in France since 2015.

Since 2015, major businesses have developed many initiatives to encourage in-house innovation. They have invested in the “startup phenomenon”, hoping, therefore, to integrate them into a “workflow” more in line with their pace of innovation: incubators, CVCs, accelerators, etc. A few years later, the results have not been entirely satisfactory and some frustrations persist. Some startups accelerated by large groups are delighted to be bought out after their acceleration period, by GAFAs or unicorns, the value of co-creation then escaping the large group. On the other hand, some startups tend to normalize themselves dangerously in the presence of large groups, thus losing “their essence”. This is what Franck Mattes and Ralph Christain theorize in their book: “Scaling-up Corporate Startups: Turn innovation concepts into business impact“. In this book, the two authors advocate the concept of co-creation and take the German giant Bosch who brilliantly initiated this concept in Europe as an example. 

2013, Bosch launches Grow, the first real European co-creation platform.

In 2013, Bosch initiated the opening of a new in-house platform dedicated to innovation. On this platform, the innovation teams had the opportunity to transform their concepts into products and business models independently and hand in hand with Bosch. For teams wishing to innovate, this platform offered an ideal structure to exploit their agility and dynamism but also to meet customers, while benefiting from the comfort and support that is typical of large companies.

With this platform Grow, Bosch had two objectives:

• Increase the chances of success of truly innovative initiatives,
• Transform the group profoundly, to make disruptive innovations possible, manage them and make them viable (scaling-up).

Bosch, a historically atypical innovator

When Robert Bosch humbly founded his workshop for precision mechanics and mechanical engineering in Stuttgart in 1886, he probably had no idea of the development that would follow his initiative. Today the Bosch Group is a world leader in its field and employs more than 400,000 people worldwide. It generates nearly 80 billion euros in turnover. These activities include 440 subsidiaries in 60 countries, grouped around 4 business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Building Technologies. One of the group’s particularities is its capital structure: 92% of Bosch shares are held by charitable foundations and the majority of voting rights are governed by a trust that is responsible for the Group’s innovation efforts.

This structure guarantees the group a high degree of freedom, particularly in terms of innovation. But above all, it gives managers the freedom to undertake strong initiatives in terms of long-term innovation. Bosch now prides itself on employing 64,500 people in research and development.

Large companies can create innovation but have more difficulty inventing new business models.

Franck Mattes and Ralph Christain theorize it in their book: “Large companies are often victims of their own success. They are so powerful with their core business activities that they do not feel the need to reinvent themselves. However, if Bosch has constantly evolved its core business over the past 50 years, it is undoubtedly due to a large number of technological innovations and to the new business models that have emerged. The major technological innovations are given by the Group, but the ability to integrate its innovations into disruptive business models must be heavily backed by Bosch.

Bosch’s main idea is brilliant: to include the trade-off between high-risk and low-risk investments in the group’s core business. Typically, as any innovation director knows well, the chances of success for development in a core business are 85% as long as the target growth remains at a single-digit level (which the groups master). But if you plan to invest in disruptive innovation, only 10% of projects will succeed. However, it is this 10% who will do what Bosch calls “very big things” that will push the market forward and reinvent it. It was precisely to incorporate this risk into the core business of a giant like Bosch that Grow was created.

 Co-create startups for the group and with the group.

Bosch positions Grow as a working environment that generates “radical innovation”. The people selected at Grow have to think differently every day. But Bosch positions Grow as an essential partner offering all the support necessary for successful business development.

All co-created startups are financed by Bosch and supported by the growth platform team, from fundraising preparation to integration into the group. Unlike its subsidiary Venture (Robert Bosch Venture Capital), Grow is not focused on investing in external technology startups that could be incubated by Bosch’s incubator. Grow has its own legal structure that allows it to co-create startups with the group and for the group.

Wefound, the corporate startup studio offers you tried and tested acceleration levers for the creation of disruptive innovation structures for the benefit of large groups. To learn more about Wefound’s methodology, we invite you to read this article:

Click on the image to read the article: Wefound, a Corporate Startup Studio, made in France

L’article Co-creation: a pillar of radical innovation for large corporations. est apparu en premier sur Wefound.

Following the digital revolution, disruptive innovation and integration of start-ups into the fold of large corporations are a major challenge for large groups. After open innovation, intrapreneurship, incubation, and acceleration the co-creation of startups is gradually being introduced into the toolbox of innovation directors and CDOs. Widely developed in the United States, the idea of co-founding a start-up is spreading in France with strong initiatives at Air France with Big Blank and AXA with Kamet.

So why co-create a start-up and why with a corporate startup studio? In this article, we have five good reasons to pursue co-creation.

Innovation is not invention, innovation is about creating value.

It is widely accepted that a distinction should be made between technological innovation and usage-based innovation. One (technological innovation) is often considered purer or at the very least, more promising than the other (usage-based innovation). However, at Wefound, we believe that this distinction is obsolete. We believe that innovation only occurs when value is created.

« Innovation does not mean entering a market with a new idea. All our teams at Wefound are convinced that innovation begins to exist only when value is created. Our experience shows us that this creation of value occurs only on the basis of ‘insights’ (internal inputs from an insightful and informed vision of the market). Insights that will allow you to understand where the group should be in the future, how it should be positioned, and with which vectors to optimize and accelerate its value creation« , asserts Gilles Debuchy, CEO of Wefound.  This is the very essence of Wefound’s approach, to create enough insights so that innovation is no longer synonymous with experimentation but rather with value creation.

Use teams that are experienced in disruptive innovation. 

Growing a startup is not the same as running a traditional company. Admittedly, some high-level managers will be able to switch from one to the other with ease. But disruptive innovation combined with the creation of the « shock troops » necessary for its development cannot be improvised. Startup studios have invaluable knowledge of the startup ecosystem. At Wefound, all our core team members have at least one strong entrepreneurial experience, with strong networks in France and abroad, and the knowledge to recruit the perfect employees for large corporations to help startups grow.

Bring in innovation from the outside.

As we saw in a previous article, American « detergent makers » very quickly understood that they had to take advantage of innovations designed and developed outside their walls for:

• radical innovations,
• innovations that break existing traditional product segments
• faster and cheaper processes

It should be noted that a group will often tend to innovate at the sidelines of its core business, according to a logical and linear cycle of innovation that is specific to its sector of activity. Tesla made the electric car take off while traditional manufacturers were slowly switching from gasoline to hybrid, from hybrid to plug-in hybrid, and finally from plug-in hybrid to electric.

In a large group, innovation is never at odds with its core business, while a new player or a game-changer (such as Tesla) will consider disruptive innovation as an aggressive vector of domination to impose its brand and its mark on a market.

In the context of increased competition in the field of energy distribution, one of our partners, Engie, wanted to broaden its scope of exploration around its key business of electricity. With the group’s Business Units and after a significant period of ideation, we have decided to launch Greenmove, the specialist in used electric vehicles.

In launching Greenmove, the pitfall was to avoid an overly « internal » vision of the project. This would have consisted of projecting Greenmove as a vector for acquiring electricity consuming customers captive for Engie. For the initiative to have a chance of success, it was necessary to look beyond that. Greenmove’s business model is based on long-term rental or resale of used electric vehicles. « Greenmove does not aim to find its financial equilibrium by selling electricity but does so through the sale and rental of electric vehicles. We have thus created an environment for innovation in line with Engie’s values while offering the potential for growth for the group’s traditional activities. At the same time, we have created a non-captive model, the only one that can make this project a success on a stand-alone basis« , explains Gilles Debuchy, CEO of Wefound.

Benefit from a cycle of constant innovation that is in line with the hypergrowth models of startups.

As shown in the diagram below, initially one or more startups are co-created. They develop at a hypergrowth rate, and other start-ups may also be added over time. In this case, we take the example of two co-creations per year. We see that the area for innovation of the group expands considerably over time without affecting the group’s internal potential for innovation since the startup develops in an almost autonomous way, on its own territory.

Sylvain Huet, CTO of WeFound adds, « Of course the co-creation process cannot and should not replace the Group’s in-house innovation initiatives. Co-creation must be added to their traditional innovation processes. The co-creation of startups is simply another weapon in the arsenal of innovation managers. »

The group is an indirect co-founder of the start-up. In the worst-case scenario, it can sell it and profit from it.

As such, it may seem anecdotal to anyone who has not had any experience with an accelerator. But how many groups that have been positioned as startup accelerators have been disappointed due to a lack of control over strategic decisions? « The ‘accelerated’ startup can indeed decide to unexpectedly sell itself to a competitor of the group that helped it grow« , Gilles Debuchy explains. While the accelerator model exposes the group to the risk of losing its best startups, the corporate studio startup model indirectly provides a number of safeguards to the group. In the event of co-creation, the group will have the ability to use the M&A option under the right conditions: there is no exclusivity or pre-emption right, but a de facto special relationship. The balance is restored. And if a competitor buys the startup, it will be no surprise and furthermore, it will generate additional financial value.

For more on innovation in general: The art of innovation, Guy Kawazaki

https://www.youtube.com/watch?v=Mtjatz9r-Vc

L’article 5 good reasons to co-create with a corporate startup studio est apparu en premier sur Wefound.