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.

In the previous article, we showed that large groups or “existing players” are not only perfectly capable of taking advantage of disruptive innovation but also fully capable of implementing innovative and disruptive projects, that are in line with their strategic objectives. At Wefound, we support large companies in the launch and development of their disruptive innovation projects. Below are three key principles that should not be underestimated to ensure the success of a disruptive innovation project.

Forget about the first-mover advantage, don’t try to be the first!

The rupture theory helps to clarify the question of the first-mover advantage. Widely developed in the 1990s, it states that the first entrant into a new market enjoys sustainable competitive advantages over late movers. This theory states that the main competitive advantage is the order of arrival on a market, so it recommends moving as quickly as possible to be the first to enter it.

“Google is a late mover in the search engine market. To make its place in this market, the firm had positioned itself as the first search engine that did not take advertising revenues into account to prioritize its clients’ ranking.”

This theory, however appealing it may be, has rarely been confirmed by evidence. GILETTE entered the disposable shaver market late but has made its mark with undeniable success. APPLE too entered the telephone market late, and whether our youngest readers like it or not, GOOGLE entered the market only later. The company founded by Larry Page made its place in the search engine market long after YAHOO, AOL, or CLUB INTERNET in France. It did so by declaring that it was in a way the only non-advertising-oriented search engine on the market. When the company from Menlo Park arrived as a late mover, it perfectly exploited the Achilles’ heel of the market. Capitalizing on it, it eliminated all other players until it became almost monopolistic. To become, ironically enough, the world’s leading advertising agency. The success of a disruptive model is not dependent only on the order of arrival on a market but more on the compatibility between the opportunity and the company’s business model. This is what Wefound studies during the ideation phase of the project.

Find the right KPIs to measure the progress of a disruptive project.

A well-managed company measures the performance of its business. In the same way, measuring the progress of a disruptive innovation project is fundamental. Two pitfalls should be avoided. The first pitfall is managing a disruptive innovation project in the same way as a continuous innovation process. It is necessary to set up a specific measurement system for a disruptive innovation project to manage its progress. For example: sometimes, it will be necessary to take the evolution of the acquisition of a certain parameter into account more. In the case of AIRBNB, it is the number of properties for rent, that has been taken as the main metric. In the case of Google, it is the number of searches performed. At Wefound we work with our partners on the implementation of KPIs that are specific to each project. These are generally approved by the innovation committee and the finance department, which makes the project clear and provides a boost to the project’s development.

Wefound accompanies its partners in the implementation of specific KPIs for the disruptive innovation project, approved by the entire management team, which provides clarity and longevity to the project.

The second pitfall is to abandon all attempts at management on the grounds that “innovation cannot be managed”. The tendency in this hypothesis is to let the management of an in-house disruptive innovation project run wild under the pretext that it would asphyxiate the project if it worked under the “rigid” management of the group. In this case, there is the obvious risk of a syndrome well known to innovation specialists: that of the XEROX PARC in Palo Alto. PARC has contributed to some of the world’s greatest innovations in IT (the mouse, the ethernet network, etc.) but the American company has never been able to profit from any of these innovations.

Wefound creates disruptive innovation with its partners, optimizing the chances that this innovation will ultimately benefit them.

Who can lead a breakthrough innovation project?

Captain Smith, a long-time captain, had never had an accident during his 40-year career. It was precisely for this reason that the White Star had entrusted him with the keys to the Titanic. But forty years without accidents reinforces the feeling that nothing can happen to you, but above all deprives you of the experience that will allow you to react in the event of difficulties, and especially of the ability to anticipate and prevent danger. Paradoxically, recruiting a conservative profile to prevent risk can help increase it. To lead a disruptive project, on the contrary, we will look for a profile that has the potential to identify new issues, someone who has acquired experience in uncertainty. These profiles are relatively difficult to identify for the HR staff of large groups, who are more used to recruiting profiles according to the skills and successful history of the candidates. We are looking to reduce the risk to better face the challenge.

Wefound accompanies its partners in the recruitment of the leader who has the entrepreneurial profile to succeed and accompany the innovation project towards success. This is done by taking into account the factors of permanent uncertainty and the emotional micro-cycles required to undertake a disruptive innovation project.

L’article Corporate startup: forget about the first-mover advantage 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.

To survive and prosper, large, well-established companies must have a clear understanding of the challenges they face: disruptive innovation, integration of new business models, disruption of entire sectors, etc. We live in an unstable period where the speed of innovation is regularly re-evaluating established advantages.

Admittedly, there will always be large corporations (consumers having a need for familiar faces), but also skilled and agile entrepreneurs to take advantage of technological innovations and capture a lucrative place in a market.

Incubation, acceleration, creation of internal startups, association with “corporate startup studios”… How should large companies adapt to this new situation and benefit from the contribution of startups?

The end of sustainable competitive advantage

Historically, management has tended to favor a “strategic” approach to finding long-term competitive advantages. Once a competitive advantage has been found, it is up to the managers to develop and protect it, thanks to an almost encyclopedic knowledge of the market in which the company operates, as well as to an indisputable financial management and a culture of operational excellence specific to large groups.

To innovate or to be uberized? Is that really the question?

Today, mainstream managerial thinking recognizes that a stable, long-term competitive advantage is a delusion. This is what Maurice Levy foreshadows in an article on the psychosis of uberization in LA TRIBUNE.

It is widely acknowledged that large companies must now create the right tool to quickly benefit from the competitive advantages they have, and quickly move on to the next advantage. In other words, the innovation cycle is speeding-up considerably (the duration of the competitive advantage tending to decrease) and large companies must adapt.

Faced with this new situation in terms of pressure to innovate and, furthermore, the disruptive innovation generated by startups (see article), large companies are divided between several major tendencies: exclusion, control, and integration.

• Exclusion: by restricting entry into the market, and by pressuring the regulatory authority to create more norms. But startups hate norms! “To discourage them, we shall promote the creation of new standards and new taxes.” This is exactly what we are witnessing today in the audio-visual world with the arrival of Netflix. Large organizations do not question the relevance or sustainability of their programs or even the quality of their offer. They are uniting to impose legislation that will make the invasion of Netflix and other rivals more complex.

• Control: this is a rarer phenomenon today. For a large group, it meant taking control of a startup and then integrating it into the group’s business. By entering an unfamiliar and normative environment, the startup tends to integrate and then lose its identity. In doing so, large corporations have paid large sums of money to buy startups whose “potential for nuisance” to their core business was estimated to be high, and believed consequently that they could control game changers.

• Integration: to integrate ” disruptive innovation “, many groups have nowadays encouraged the development of support structures such as corporate VCs, internal incubators and internal accelerators. But startups need their independence to progress quickly. However, once they are integrated into a group, they are dependent on it and are subject to decision-making procedures that are not compatible with the decision-making reactivity they need.

Moreover, when groups position themselves as accelerators, once the startup has reached maturity, the possibility of it being bought by another company is significant. It can, therefore, create a sense of frustration for the group that helped the startup to develop, to see it escape to other, greener pastures.

Innovation VS Business as usual

It is obviously unrealistic to advise established companies to act like startups. Large companies are not startups and they should not seek to act or think like a startup. On the contrary, they must demonstrate a total commitment to the success of a noble and triumphant day-to-day business. Startups, on the other hand, can very well develop a new “value proposition” and develop it without having to integrate the “habits and customs” of an old business model.

This is the constant challenge that well-established companies have always faced: how to be sufficiently dedicated to ensuring the current viability of the group while devoting sufficient energy to exploring innovative solutions to ensure the future viability of the group?

Will large organizations develop a sudden interest in pivoting and in failure?

It is essential to realize that, even if some entrepreneurs in Silicon Valley have become successful rock stars, many startups fail. Even in the United States, nine out of ten startups fail. And even when they succeed, 90% of them have done so only after a significant pivot.

Essentially, a startup is a temporary organization whose purpose is to find a sustainable and profitable business model while a group operates essentially on a known business model that meets the known needs of known market segments.

Since large corporations largely prefer pivoting to failure, this is a valuable asset that they can look for in startups.

Towards ambidextrous organizations

For established companies to be able to innovate successfully, they must find a way to search for innovation while they go about their daily business. Innovation in companies is a war fought on two fronts. This capacity to search for innovation while at the same time running the business successfully is the true mark of an ambidextrous organization. As Steve Jobs said, “It is not simply a choice between being in the navy or being a pirate“.  Large well-established companies must put processes in place to enable “real innovators” to become pirates from within the navy.

Wefound: a way to create tailor-made startups that will bring joy to the business unit manager.

This is exactly what Wefound offers: to create pirates from within the Navy, and it also reflects our positioning as a corporate startup studio.

We propose to large corporations to join forces to develop breakthrough innovation vectors and to create tailor-made startups in their areas of expertise. After a joint ideation process, potential startups are imagined and then tested by the studio in a “go/no-go” setting. One or more startups are developed in this way, the primary purpose of which is to succeed, but also to integrate quickly and easily into the group’s business ventures. Thanks to this ability to regularly create new startups, we enable the company to increase its innovation potential in a significant and sustainable way.

We are at your disposition to provide real case studies, our collaboration methodologies, and financial structuring opportunities.

L’article Corporate Startup Studio: why join the Navy . . . when you can be a pirate? est apparu en premier sur Wefound.

In the toolbox of innovation, there exists a multitude of solutions that have been approved by large businesses: Open innovation, corporate ventures, internal incubator, internal accelerator, etc. A newcomer to this list is a relatively new concept: the corporate start-up studio, that allows a company to create in-house and bespoke start-ups.

Why create a Startup studio?

• To create new companies from scratch.
• To stop limiting oneself to the creation of a single start-up at a time and develop several start-ups in parallel.
• For corporate start-up studios; to align the creation of a start-up with the business goals of a company or business units.
• To capitalize on the experience, culture, and the creators of start-ups and to share the resources of a large group in order to launch the start-ups with more chances of success.

Startup studios: the French touch with Wefound

In France, many companies claim to be start-up studios, one of the most famous being eFounders. In addition, certain investors and incubators also use this concept in order to diversify their offers to large companies and find ways to ensure future growth.  “Wefound’s offer is fundamentally different to that of our peers. We are positioned as a Corporate Start-up studio. We are among the very few to actually do this in Europe. Hand in hand, with large businesses we integrate their business goals and their culture of innovation to conceive projects and to develop them as start-ups, playing the role of co-founder”, says Gilles Debuchy, founder of Wefound.

Establishing the startup creation model.

The studios are the new players in the start-up ecosystem. They are characterized by a strong operational involvement of the management and the employees in the start-up created. The studio’s teams develop the business until it is mature enough for the market or the group. There is also a strong financial involvement of the studio in the development of the start-ups.

“We are not at all in competition with the venture capitalists”, adds Gilles Debuchy. The venture capitalists can get involved at any point with the funding of the start-ups in synergy with the studio.

The Corporate Start-up Studio brings forth an optimal alternative for the Director of R&D or the CDO of the big groups that wish to have a more operational relationship with its partners, “but also start-ups that are aligned to their business goals, and who eventually, will speak the same language”, adds Gilles Debuchy.

Allowing big groups to integrate startup culture in a targeted and effective manner without going through a cultural revolution

“The goal of the start-up studio is to find a solution to the failure rate of almost 90% generally seen in entrepreneurship. The idea is to benefit from a seasoned entrepreneur and  the experience of a talented team with undeniable expertise in the start-up ecosystem”, explains Atilla Szigeti in his ebook ‘Anatomy of a startup studio’

The traditional recipe for a start-up is: have an idea, create a product, an offer, start commercializing it and finally, scale up. In France, 9 times out of 10 this method fails. “We can discuss all the good (or bad) reasons but it is the reality”, comments Gilles Debuchy. “We have created Wefound to address this challenge: to reduce the risk of creating a start-up. The groups are aware of their need for innovation and agility, and furthermore, certain sectors are obsessed with the emergence of a ‘Game changer’”. We offer them the possibility of creating a reliable start-up that will allow them to innovate with the group’s goals in mind.

Startups and large groups in sync, the pooling of resources become a key lever for success.

This pooling of skills between the group and the start-up becomes one of the major keys to the success of the studio. It is the studio’s teams that will allow the start-ups to take off. They will rely on the experience of the business teams of the group, generally with the CDO acting as the liaison between the two. They are in tune after a stage of ideation that lasts 3 to 6 months.  The founders’ experience and the varied skills of the studio’s collaborators provide the group with agility and a culture of innovation that is priceless. The group provides various resources (legal aid, market knowledge, distribution, etc.)  that a start-up usually doesn’t have access to. The teams are in sync, speak the same language and the start-up is on the path to success.  

L’article The Corporate Startup Studio: a game changer for innovation in big companies or a new gadget for the chief digital officer (CDO)? est apparu en premier sur Wefound.

These days, the innovation process of large organizations has been considerably upset. The majority of large businesses can no longer compete with start-ups that are faster and more agile in the domain of innovation. With this in mind, many groups have tried to clone the methods and tools used by start-ups to improve their potential for innovation.

The invasion of lean management and design thinking into large groups

We have all witnessed the flood of words related to lean management and design thinking into our vocabulary. These techniques have clearly led to some undeniable success in terms of innovation. But in the majority of cases, they have not borne fruit and thus discourage the promoters of innovation in large companies (who then dream of joining start-ups).

Clearly, it is neither the methods of “lean” or “design thinking” that has to be examined (for they have made fortunes for various entrepreneurs in Silicon Valley) nor the people who implement them in the large companies. It is ultimately the compatibility of these methods with the environment of a large organization that raises questions.

The DNA of a start-up: agility by design, disruption out of necessity

 One of the obvious reasons is that large corporations are not made to be agile. In other words, to use more modern terms, they are not agile “by design”. On the contrary, they are designed based on validated models to be long-lasting and efficient.  When we then add administrative procedures, regulatory constraints, and other such restrictive factors to this mix, the implementation of disruptive innovation strategies that start-ups like Nickel, Uber, or BlaBlaCar are able to produce, become immensely complex for publicly listed companies.

To free themselves of the shackles that limit their potential for innovation, these groups use methods that allow them to encourage the creation of “core business start-ups” such as incubators, accelerators, investment funds, etc.

A new toolbox to innovate: corporate incubators, corporate accelerators, corporate ventures, etc.

In doing so, the groups feel that they have a keen eye on innovation in their sector of activity, and consequently believe that they retain control over these innovations and can thus neutralize game-changers.   The results are not too convincing though. Start-ups advance at their own pace and large companies have theirs. The innovations of internalized start-ups often do not correspond to the goals fixed by the Business Units. The start-ups’ projects are paradoxically subjected to a gestation time that is too long to retain the attention of executives who handle short-term goals on a daily basis.

Too often, it just doesn’t work out. Consider this photography metaphor, “It’s just a matter of adjusting the focus!” To film a single scene; the innovations, the start-ups, and the large organizations cannot all be the main point of focus on the same scene. Someone will always be out of focus for the other and vice-versa.

Case study:  BNP- PARIBAS shells out more than 200 million euros to buy Nickel.

Would it have been possible for a start-up like Nickel (the bank without a bank) to come into existence within a French banking institution, by offering to create its business from a customer base that has been barred from the system? Probably not.

And yet 5 years later, BNP, a leading French bank, took control of Nickel.  A company that allows these “outsiders” to be reintegrated into a hybrid peripheral organization, with a totally disruptive distribution circuit and whose “clearing – transaction” system is managed by a proprietary algorithm based on blockchain. Basically, everything that a bank would not have wanted, before witnessing its undeniable success, 4 years and 700,000,000 customers later.

The problem is that success has a cost and, in this case, BNP had to pay more than 200 million euros to buy-out the “troublemaker” of the French banking system.

Let us imagine the scene:

A young aspiring banker, fresh out of business school meets a rigorous financial inspector in the corridors of his bank. He gathers up his courage, goes up to the senior manager and says to him: “Mr. Director, I have a great idea! Let us open a subsidiary that can open bank accounts in tobacco shops, for people who have been banned from banking and who are too scared to even enter a bank. We will offer these people that have no current means of payment, a bank account and a credit card for only €20 a year. Everything will be perfectly secure. I have a classmate who is developing a blockchain solution that will make all exchanges secure.”

There is no doubt that the young graduate would have seen his future in the bank largely compromised.

It is not man that impedes innovation, but the systemic organization in large corporations.

Surely, it will be foolish to mock the banking executive, but how could have anyone imagined the success of Nickel? A bank without fees, distributed via tobacco shops (when banks have already bought out half of the street corners in France) and secured by a technological innovation which no one really understood.

It is precisely this purely systemic mechanism that proves to be the “innovation killer” in large corporations. A corporate start-up studio makes it possible to bypass this mechanism by helping a corporation to think about innovation outside the system, but always via a shared ideation process consistent with their business goals.

(read the article on how a corporate studio start-up works).

Detergent makers: pioneers of start-up studios?

The idea is not new. Peter Drucker in his book “Innovation & Entrepreneurship” in 1985 devoted a whole chapter to the American giants: Johnson and Johnson, 3 M, and Procter and Gamble. They created innovation levers that were sometimes in conflict with their core business, in order to disrupt the market, through autonomous companies created ex nihilo. The “entrepreneur”, was completely free from the system and had free rein. He had to invent an innovative, disruptive product, while being able to take care of everything independently, from research to sales and marketing.

This is how Swiffer, for example, was created. It is obviously unlikely that this undeniably successful innovation could have been developed internally. Imagine that! A dust suppressant without detergents… From a detergent company! We usually don’t kill the goose that lays golden eggs.

Corporate Start-up studio and large companies, “hand in hand” to create levers for sustainable innovation

Large companies have a lot of assets that start-ups envy: networks, privileged access to the market, knowledge of the regulatory framework and its evolution, human resources, and financial resources that they must value and exploit. The studio, which has an exhaustive knowledge of the start-up ecosystem and a network of extraordinary entrepreneurs, offers the group a vector of agility while the group offers a unique framework, conducive to the success of the start-up.

Thanks to shared ideation processes and virtuous legal and financial architectures, corporate start-up studios will make it possible to reconcile disruptive innovation with the culture of success of large publicly listed groups. Good news for groups! They will no longer have to spend hundreds of millions of euros to acquire mature innovation levers. The maturation will now take place within the group.

L’article The Corporate Startup Studios: the highway to disruptive innovation for large corporations est apparu en premier sur Wefound.