For a long time, corporates have been trying to show off how innovative they are. Whether they’re stimulating creativity through open plan offices, ping pong tables, an X-Box in the corner with oversized beanbags and multi-coloured jellybeans on tap, or whether they operate an open-door policy to all meetings, strategic planning sessions and even board discussions, one thing is certain – they are on a mission to discover the new – in whatever way they can.
But the reality is that a lot of what they (and you) might be seeking, lies outside of your four walls; far beyond your employment team and way past water-cooler discussions and renditions of Guitar Heroes. Innovation is being driven by a new type of business – the fast-growing startup.
And perhaps, one could go as far as saying that traditionally, the (slightly awkward, strained-even) interaction between a corporate and startup was down to trying to create a display of free-thinking. But that’s changing. In fact, it was Accenture’s Narry Singh that said that colossal corporate firms trying to innovate within their existing structures does not work. Large organisations are waking up to the fact that the display may be over – and, in order to truly become innovative, they now have to put their investments where their theatrical demonstrations are. Introducing: Corporate Venturing.
“The belief that startups fear failure because they will go out of business, and large corporates move slowly on projects because they are afraid, is incorrect. Startups don’t fear failure. They fear not succeeding” – Narry Singh (Digital Strategist for Accenture) speaking at #WIRED2016.
So, what’s motivating their investment? Well, the following are just a selection of behind-the-scenes drivers that lead Corporates to consider partnerships with younger, newer, high-growth potential businesses.
- They’re looking for new technologies or product categories that might become part of their businesses without the direct expense of staffing an in-house unit.
- They want to earn money or earn patent/technology or kill competition
- They want to take advantage of the smaller partner’s nimbleness to enter new regions, using newer digital channels
- They want to learn about new business models
- They may want to prevent competitors from acquiring a breakthrough technology
- They want to take advantage of the agility when it comes to making decisions and implementing plans without the multiple layers of management having to sign off anything
- They want to learn new ways of developing new ideas and bringing them to the market quickly.
- They want to discover unmet customer needs and unserved emerging markets
- They want to supplement their own strategy internally with external reinforcement.
- They want to develop new business relationships
- They want to prepare potential candidates for a strategic alliance or acquisition
But, as with most things, the course of Corporate Venturing hasn’t always been smooth sailing – and many organisations have lost out on valuable opportunity simply because they lacked the right incubation support to nurture the investment opportunity and the startup that represented it, they experienced a conflict between strategic and financial objectives, internal decision-making chains within the parent company, throughout the investment lifecycle, were too long, and more.
That’s why knowing that you’re ready to invest – in the full sense of the word – is critical to seeing returns. Getting it right from the start is paramount – and that’s why you need an incubation partner that not only helps you to select the investment opportunity that is right for your organisation, but someone that will work with you to nurture and develop a rewarding long-term relationship, according to your own strategy and growth plan.
That’s why you need us.
With over 30 years in the corporate world, we understand how you think. We understand what drives you. But there’s a difference. We also bridge the gap between high-growth, agile businesses and the investment community. Which means that we speak both languages – and we know how to get the best, for you. Why not chat to us today about how we can help.
Insight for those who are looking for investment opportunities and those who are looking to partner with corporate venture capital as part of their growth plan.