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.
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.
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?
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THE TREND IS REAL
THE STATE OF STARTUP/CORPORATE
COLLABORATION 2016
10. BOTH SIDES WANT TO WORK TOGETHER
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23% of corporationssee working with startups as ”missioncritical”
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 today’s corporationssay innovationis at least “somewhat
important“
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
12. CORPORATES NEED TO BE MORE
ENTREPRENEURIAL
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5% of corporations vs. 75% of startups say they are “very
entrepreneurial”
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
13. STRATEGIC FIT MATTERS MOST - FOR
BOTH SIDES
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44% of corporations and 47% of startups say that “strategic fit” 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!”
Corporate Respondent
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• 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
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“We try to meet each
startup on equal footing,
looking for win-win
relationshipsto help us both
achieve our goals.”
Roberto Ortega, Head
of Digital Innovation,
Caterpillar
CORPORATE VIEW 2: GO FOR WIN-WIN
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“From our perspective,
we’re not looking for an
exit. We’re looking to
build a successful
company. Our first priority
is to help our customers.”
Gilad Israeli, Founder, TBUS
STARTUP VIEW 1: BUILD VALUE FIRST
18. STARTUP VIEW 2: TIME IS PRECIOUS
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“Time is our most
precious resource, so we
alwayshave to prioritize.
What this means is that
we will avoid companies
that we’ve heard will
only waste our time.”
Suelin Chen, Founder and
CEO, Cake
19. REWARDING BUT STILL CHALLENGING
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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)
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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
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“Our primary interest is to
build future value in the
healthcarespace. We only
make an investment when
it’s clearly the best
mechanism to achieve these
goals.”
Patricia Forts, Director of
Innovation and Strategy,
Harvard Pilgrim Healthcare
25. MECHANICS OF THE THREE COLLABORATION
MODELS
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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
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Moonshots
R&D / Productinnovation
Core business improvement
THE RISE OF THE INNOVATION FUNCTION
The innovationfunction – which itself is new at most organizations–
dominated respondents’ choices of who is steering the ship
Source: The State of Corporate/Startup Collaboration 2016 (MassChallenge/Imaginatik joint research study)
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“We have full-time
Innovation Scouts located in
Silicon Valley,Tel Aviv,and
other tech hot spots.”
Innovation leader, global bank
“We have a very systematic
approach to interactions with
startups.”
Chief innovation officer, F500 tech
company
“Threeof our six innovation
centers allocate50% of their
P&L to startups that coexist
with our researchers.”
Engineering leader, F500 industrial
products company
28. CORPORATE PROGRAM DESIGN IS
HAPHAZARD
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Business Insider
25%
Of corporationsdon’tknow 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
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Business Insider
25%
of corporations don’t
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
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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)
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ADVICE FOR STARTUPS
1. Be thoughtful and
deliberate
2. Think strategically,
from the
corporation’s point
of view
3. Use new channels
for engagement
36. READ OUR 28-PAGE RESEARCH REPORT
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Released July 20th (today)
more.masschallenge.org/report1
37. AND THE WINNERS ARE…
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Corporate winner
Gail Chen
AIG
Global Innovation
Advisor
$500
gift certificate
Dror Barash
Speculo
Co-Founder and CEO
Startup winner