What are the best models for startup/corporate collaboration? What's the best way to approach a startup? Answers to these questions and more in this presentation.
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How to Win at Startup/Corporate Collaboration
1. HOW TO WIN WITH
STARTUP/CORPORATE
COLLABORATION
Mike LaRhette and Chris Townsend
July 20th, 2016
2. MIKE LARHETTE AND CHRIS TOWNSEND
Mike LaRhette
President,MassChallenge
For 25 years, Mike has helped
individuals and organizationscatalyze
ideas into action through connecting
startups and established
organisations.He is President of
MassChallenge,the most startup-
friendlyacceleratoron the planet, and
is a thought leader in the area of
startup/corporate collaboration.
Chris Townsend
CMO, Imaginatik
Chris has spent nearly a decade as one
of the world's leading experts on
innovationmanagement,having
developed deep domainexpertise in
both innovationconsultingand
innovationsoftware.A former Forrester
ResearchAnalyst,Chris has
spearheaded reports on the stateof
innovationat Imaginatik forthe past
several years.
3. REPORT RESPONDENTS: CORPORATIONS
3
Copyright Š 2016 MassChallenge, Inc.
All Rights Reserved.
⢠Disruption of whole industries
⢠Dislocation of existing value
and supply chains
⢠Disintermediation of
incumbent players
Fintech startups â just one example of danger from:
4. CORPORATIONS ARE ACTIVELY WORKING
WITH STARTUPS
4
Copyright Š 2016 MassChallenge, Inc.
All Rights Reserved.
And many moreâŚ
5. REPORT RESPONDENTS: CORPORATIONS
5
Copyright Š 2016 MassChallenge, Inc.
All Rights Reserved.
Survey sample was broad across geographies and industries, with top
startups and companies participating.
Annual revenue of employer company Corporate
respondents
⢠38% were Senior
Executives or C-Suite
⢠40% were middle
management
⢠44% came from
corporates with >$5B in
revenue
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
6. REPORT RESPONDENTS: STARTUPS
6
Copyright Š 2016 MassChallenge, Inc.
All Rights Reserved.
Startup respondents
⢠86% were the founder
and/orCEO
⢠85% have been in
existencefor between 3
months and 5 years
⢠24% were in software or
web platforms and
services
⢠59% were pre-revenue
Survey sample was broad across geographies and industries, with
top startups and companies participating.
Annual revenue of employer company
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
7. KEY RESEARCH QUESTIONS
To what extent, and why, are
startups and corporations
collaborating?
What form do these
collaborations usually take?
For each side (both
corporationsand startups):
⢠What are the business reasons
for collaborating?
⢠What results do they achieve?
⢠What are the typical pitfalls?
⢠What are the keys to success?
7
8. 8
THE TREND IS REAL
THE STATE OF STARTUP/CORPORATE
COLLABORATION 2016
9. KEY FINDINGS
Copyright Š 2016 MassChallenge, Inc.
All Rights Reserved.
9
01 Interactions are moving early stage
02 Interactions with startups are becoming âmission criticalâ
03 Corporate innovation modelsare still in their infancy
04 Strategic fit is paramount, but the underlying goals vary
05 Mindset change â No longer âUsâ vs. âThemâ
10. BOTH SIDES WANT TO WORK TOGETHER
10
23% of corporationssee working with startups as âmissioncriticalâ
and 67% of startups say the same in reverse
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
11. CORPORATIONS NEED INNOVATION
96% of todayâs corporationssay innovationis at least âsomewhat
importantâ
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
12. CORPORATES NEED TO BE MORE
ENTREPRENEURIAL
12
5% of corporations vs. 75% of startups say they are âvery
entrepreneurialâ
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
13. STRATEGIC FIT MATTERS MOST - FOR
BOTH SIDES
13
44% of corporations and 47% of startups say that âstrategic fitâ is
most important consideration for working together
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
14. CORPORATE VIEW 1: STRATEGIC
PARTNERSHIPS WITH STARTUPS
Startups are future paying
customers. Startups are
future employees.
Startups are pushing the
boundaries of our
products and helping us
make them better. They
are crucial!â
Corporate Respondent
14
15. 15
⢠Mentor: Industry
guidance and
support
⢠Customer: Landing
strategic accounts
⢠Marketing
Channel: Scalable
paths to market
⢠Strategic Partner:
Access to big-time
resources
STRATEGIC FIT DEFINED BY STARTUPS
16. 16
âWe try to meet each
startup on equal footing,
looking for win-win
relationshipsto help us both
achieve our goals.â
Roberto Ortega, Head
of Digital Innovation,
Caterpillar
CORPORATE VIEW 2: GO FOR WIN-WIN
17. 17
âFrom our perspective,
weâre not looking for an
exit. Weâre looking to
build a successful
company. Our first priority
is to help our customers.â
Gilad Israeli, Founder, TBUS
STARTUP VIEW 1: BUILD VALUE FIRST
18. STARTUP VIEW 2: TIME IS PRECIOUS
18
âTime is our most
precious resource, so we
alwayshave to prioritize.
What this means is that
we will avoid companies
that weâve heard will
only waste our time.â
Suelin Chen, Founder and
CEO, Cake
19. REWARDING BUT STILL CHALLENGING
19
Business Insider
50%
of startups said their experience
interacting with corporations was
mediocre or worse
As a startup, what has been your experience in attempting to work
with corporates?
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
22. 22
EARLY-STAGE PARTNERSHIPS DOMINATE
Early 2000s
The rise of corporate venture capital
Circa 2016
Flexible,early-stage partnerships
⢠For what reason(s) does your organization
seek to interact with startups?
In your view, how entrepreneurial is your organization?
60%
To explore new tech
or business models
25%To develop
acquisition targets
10%
To earn a return on
venture investments
23. 23
âOur primary interest is to
build future value in the
healthcarespace. We only
make an investment when
itâs clearly the best
mechanism to achieve these
goals.â
Patricia Forts, Director of
Innovation and Strategy,
Harvard Pilgrim Healthcare
25. MECHANICS OF THE THREE COLLABORATION
MODELS
25
Objective: Leverage
startup capabilities to
improve operations, costs,
or digital technologies
within the core business(es)
Staff: Project Managers and
Startup Scouts
Mode: Startups as business
execution lever
Objective: Work with
startups to accelerate new
technology devpt / product
innovation
Staff: Technologists, Digital
Hackers, Startup Scouts
Mode: Startups as
technology / product
development accelerator
Objective: Gain a foothold
or strategic presence in
disruptive new technology
or market spaces
Staff: In-house
entrepreneurs, designers,
marketers, Startup Scouts
Mode: Startups as
disruptive ecosystem
partners / accelerants
Core Business R&D / Product Moonshots
Shared service Autonomous unit
26. 26
Moonshots
R&D / Productinnovation
Core business improvement
THE RISE OF THE INNOVATION FUNCTION
The innovationfunction â which itself is new at most organizationsâ
dominated respondentsâ choices of who is steering the ship
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
27. 27
âWe have full-time
Innovation Scouts located in
Silicon Valley,Tel Aviv,and
other tech hot spots.â
Innovation leader, global bank
âWe have a very systematic
approach to interactions with
startups.â
Chief innovation officer, F500 tech
company
âThreeof our six innovation
centers allocate50% of their
P&L to startups that coexist
with our researchers.â
Engineering leader, F500 industrial
products company
28. CORPORATE PROGRAM DESIGN IS
HAPHAZARD
28
Business Insider
25%
Of corporationsdonâtknow how
much they spend on working
with externalstartups
Most corporations are experimenting and trying different
models rather than settling on one structure
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
29. REWARDING BUT STILL CHALLENGING
29
Business Insider
25%
of corporations donât
know how much they
spend on working with
external startups
What level of budget investment has your organization allocated for
managing interactions with external startups?
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
30. THE SUCCESSES JUSTIFY THE STRUGGLES
30
Business Insider
55% of corporationsand 60% of startups have seen at least some
success
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
32. 32
ADVICE FOR STARTUPS
1. Be thoughtful and
deliberate
2. Think strategically,
from the
corporationâs point
of view
3. Use new channels
for engagement
36. READ OUR 28-PAGE RESEARCH REPORT
36
Released July 20th (today)
more.masschallenge.org/report1
37. AND THE WINNERS AREâŚ
37
Corporate winner
Gail Chen
AIG
Global Innovation
Advisor
$500
gift certificate
Dror Barash
Speculo
Co-Founder and CEO
Startup winner