Partnering with startups is a great way to accelerate the entire corporate innovation journey. In fact, Techstars and Innovation Leader recently partnered to reveal best practices for leveraging startups to drive corporate innovation.
A well-run corporate accelerator can be directed to align with your specific needs and goals to:
- Help startups and their technology evolve in ways that meet your corporate needs, so the company builds the perfect product for you;
- See the future of your industry through the lens of entrepreneurs who are trying to disrupt it;
- Shift company culture to move faster and reduce inefficiencies and costs.
In order to meet these goals you will want to check that what you’re looking at is truly an accelerator. The Techstars mentorship-driven accelerator is not a field trip, hackathon, or “innovation theater.” It is a comprehensive solution to accelerate innovation. The best corporate accelerators include:
- Program leadership with a demonstrated history of growing their own companies and helping other startups succeed;
- Early-stage startups that can partner to meet your corporate needs or accelerate industry disruption.
- Curriculum for founders that both helps their startups succeed and de-risks investments for the corporations.
- Strong mentorship, providing founders and executives with the opportunity to learn from each other and build strong networks;
- Commitment, and the understanding that your accelerator will grow in value and returns over time, through a stronger investment strategy and internal corporate capability.
Five Ways To Get The Most Out of Your Corporate Accelerator
At Techstars, we have seven years of experience running corporate accelerators. To date, we have run 83 corporate accelerators in 12 different countries. Through our experience we’ve distilled five key principles that we share with our corporate partners—before the accelerator begins.
You’ll get as much out of the accelerator as you put into it.
This is truly the number one piece of advice for corporations going into their first year of an accelerator program. In fact, it’s the number one piece of advice for the founders as well.
The inaugural Comcast NBCUniversal LIFT Labs Accelerator, Powered by Techstars, successfully launched in 2018, and is welcoming a second class in Philadelphia in July 2019. With a corporate accelerator, “You’ll get as much out of it as you put into it,” said Danielle Cohn, Executive Director of Entrepreneurial Engagement and the Head of LIFT Labs for Comcast NBCUniversal. “You need to have a dedicated team to work with your partner. It takes a lot of time, energy, and effort to educate your internal stakeholders, but without this, you won’t have buy-in from the company. You won’t meet your goals.”
Matt Kozlov, Managing Director at Techstars, who has managed three classes of the Cedars-Sinai Accelerator, Powered by Techstars and is now preparing for the first year of the Techstars Starburst Space Accelerator, agreed: “The program is only as valuable as the amount of time and attention the executives and the organization pay to it.”
Cohn explained, “We hired Techstars to run our program, but you can’t just do that and walk away. The benefit of having an outside partner is that you’re learning from them and they’re learning from you, and you’re each accessing the other’s subject matter expertise.” Involvement and outright enthusiasm from your corporate leadership will ensure that everyone knows that the accelerator is a priority. Get executives involved as mentors, and they will both help the startups in the program succeed and bring back profound lessons on startup speed and flexibility to their regular jobs.
One great way to ensure that the accelerator gets the support it needs from the corporation is to build engagement with the accelerator into goals or KPIs for everyone involved. Offer incentives—bonuses or other rewards—for outstanding work on the accelerator. Most of all, make it clear to the entire corporation that work on the accelerator is now part of the job, not something tacked on. If you don’t do this, the accelerator can too easily become an afterthought, rather than a launchpad for successful corporate innovation.
2) With startups, the team is exponentially more important than the product. Choose founders who are flexible and take feedback well.
One error that corporations consistently make when choosing startups for their corporate accelerator is getting excited about a company’s product or tech, and ignoring the team.
The startups that benefit most from an accelerator are early stage. Their product is likely still evolving—in fact, this can be a benefit to your corporation, because you can work directly with the startup to develop a product that meets your needs.
“A great founding team can take feedback from every level of the corporation, and then incorporate that feedback into a product. They can adapt to what the corporation is looking for,” Kozlov said. “When you create the right environment, where startups can interface across the entire corporation, then the corporation and the startup can collaborate over three months, and the result is incredible companies and partnerships.”
Kozlov recalled one startup that pivoted early on, and ended up going through at least fifty different product ideas with a corporation before they found one “big enough and important enough to execute on.” A couple of years later, this company is the most valuable one to come through that program.
When selecting companies for the program, over-emphasize finding the best teams, and the products will develop organically.
3) Startups move very, very fast. Be prepared to work with this—and learn from it.
“Founders move very, very fast. They have a different cadence from a large organization,” said Yossi Hasson, currently Managing Director of the Alchemist Blockchain Techstars Accelerator and formerly MD of the Barclays Accelerator, Powered by Techstars in Cape Town.
This difference in pace poses both challenges and opportunities. Jens Festervoll, corporate liaison for the Techstars Energy Accelerator in Partnership with Equinor, experienced this firsthand during Equinor’s first accelerator. He reported that nearly 80% of the mentors who worked regularly with startups in the program said that they would work differently in the future, with more agility. This taste of startup speed became the seeds of cultural change, as executives started to see ways to be faster and more flexible in their working lives, making them more efficient and more engaged.
Techstars Network Engagement partner QBE strives to be a “Partner of Choice” for startups, and finding ways to work at startup speed is one part of their plan. Ted Stuckey, Managing Director of QBE Ventures, explained: “Our belief isn’t that startups should be held to a lower standard of security/risk, but rather that we have to be able to address those risk and security concerns faster than we do with companies that have the capacity and teams dedicated to dealing with a large corporations’ processes.”
Learning how to work at a different pace, and the impact that has on process and procedure, can be challenging. In the end, the biggest opportunity is learning how to add sprints into your marathon training.
4) Streamline your procurement process before the program begins.
“A startup in a 13 week accelerator expects things to happen really quickly,” Hasson said. “Do everything you can—before the program starts—to shorten the amount of time it takes for your corporation to work with these startups.”
Both Hasson and Kozlov agree that doing as much as you can in advance to help startups navigate your procurement processes is best. The standard legal review process, for example, can be a huge hurdle for startups. “Legal fees can kill a startup,” said Kozlov.
“Take some time to really understand what the procurement process is before the program starts,” Kozlov said. “Turn as many pieces as possible into short, simple templates that startups can easily use.” Kozlov also suggests setting aside some R&D budget in advance, so there’s money available to support companies in their commercial pursuits with the corporation.
Meeting startups halfway—by streamlining forms and processes or taking meetings quickly—is essential to making the progress you’re hoping for from the program. An accelerator program goes by very quickly, and you won’t want to waste any time.
5) The program isn’t over when it’s over.
Founders often tell us that they accomplish more in the three months of a Techstars mentorship-driven accelerator than they would in a year and a half without it. But even at this highly accelerated pace, there’s plenty to do afterward.
Your involvement with the startups in the program doesn’t end with Demo Day. If all has gone well, during the program these startups have learned a great deal about your needs, and together you’re starting to run pilots or develop products.
Cohn is proud to report that eight of the 10 startups from the 2018 Comcast NBCUniversal LIFT Labs Accelerator, Powered by Techstars are now working with Comcast NBCUniversal brands including Comcast Cable, NBCUniversal, and Universal Brand Studios.
“It took a lot of hard work from the companies themselves, from our team, our business leaders and mentors, and from the procurement team,” Cohn said. “We all wanted to help these companies grow and try new things, and that effort from across the corporation led to this exceptional success rate.”
Looking Toward Year Two…
All of these learnings hold true for subsequent years of your accelerator as well. The big opportunity after year one is to do all of them even better and to streamline the processes even further.
Follow this advice, and your corporation will almost certainly meet its innovation goals. That’s a predictable result. The surprise you may find as you start to engage with the accelerator is how much the mentors from your corporation will learn from the process—and enjoy it.
“Our mentors learned as much from the companies as they gave,” said Cohn. “They’re all eagerly awaiting the next class. They can’t wait to mentor again!”
Not Ready for a Corporate Accelerator? That’s OK.
A corporate accelerator is one of the best ways to stimulate true innovation, but if your corporation isn’t ready for the commitment of a corporate accelerator, there are other great, quick ways to engage in valuable and meaningful ways with startups. You can boost intrapreneurship within your corporation by running an Innovation Bootcamp—a three-day event that empowers your internal innovators to solve real problems. You can build lasting relationships with entrepreneurs through sponsorships. You can engage directly with targeted startups in your industry that are solving your problems right now.
When you’re ready to accelerate innovation in your corporation, Techstars is ready to help.
Learn more about Techstars Mentorship-Driven Corporate Accelerators.
Learn more about all of Techstars Corporate Partnership Opportunities.
Research shows corporations create coherent partnering and investing strategies with startups
BOSTON & BOULDER, CO – Innovation Leader today released a new survey sponsored by Techstars, the worldwide network that helps entrepreneurs succeed, which shares how executives at large corporations are approaching engagements with startups and other disruptors to fuel corporate growth.
The survey, Startup Engagement: Best Practices for Large Organizations combined quantitative data from 115 large organizations with 15 qualitative interviews to reveal ways that corporations currently engage with startups, and sheds light on best practices for companies looking to leverage startups to drive internal innovation.
While some startups are determined to go it alone, motivated by the disruption of established industries, others are eager to partner with large organizations for mentorship and advice, joint product development, access to markets, funding, and the potential of a large equity event in the form of an acquisition.
Survey research found that large corporations range in their experience and willingness to work with startup entities. Of the five percent of corporations with the highest level of experience with startup engagement, research found that providing mentorship, sponsorship and participation was at a much higher rate (88 percent) than corporations with less experience (57 percent). More experienced corporations are also more likely to partner with startups to co-develop new products (79 percent) than corporations with fewer startup touch-points (51 percent). More experienced companies are also more likely to participate in university startup programs (85 percent) when compared to less experienced corporations (45 percent).
But many companies have not put a game plan in place to connect to their startup ecosystems. In fact, the survey found that 19 percent of corporates said they haven’t yet established goals for startup engagement; 47 percent haven’t defined a clear “point of contact” internally who will be responsible for startup interactions; and 38 percent of corporates don’t yet have metrics in place to track the impact of their startup engagement activities.
“Our experience tells us that it’s not a question of if this disruption will occur, but when,” says David Brown, founder and co-CEO of Techstars. “We saw a way to turn this situation into a win-win. For a large corporation, the best path to true innovation—cultural change as well as problem-solving and avoiding disruption—is to partner with startups. We realized that if we could bring together the corporations that were the most willing to innovate with the top technology startups that have the deepest domain expertise, both would benefit.”
The research suggests that large corporations with the most startup interaction are more willing to work with startups across every category of engagement, including corporate VC investment, running a startup-focused technology accelerator, acquiring startup technology, becoming an early customer of startup products and services or reselling their technology to their customers. Willingness to work alongside startups creates mutually beneficial circumstances for both the startup and the corporation.
The research also shows that more experienced companies were similar in their approach to their goals for working alongside startups. All companies said the top goal was running pilot tests or proof-of-concept tests for new ideas, followed by “driving internal transformation” by using startup tools and methodologies, and to better understanding customer or tech trends. Just 29 percent said they were hunting for potential acquisitions.
“We met over the last four years with 1,500-plus startup founders around the world and asked them what would make a great corporate startup partnership. Everything we designed kept their input in mind,” says Danielle Cohn, Executive Director for Entrepreneurial Engagement, Comcast NBCUniversal and one of the interviewees featured in the Innovation Leader report. “At the conclusion of our first accelerator class, seven of the 10 companies were doing some form of a partnership with Comcast NBCUniversal businesses, including two that have entered into master services agreements with our company.”
In addition to the research results and interviews with corporate leaders, the Innovation Leader report includes a roadmap for corporations looking to work with startups — from establishing a strategy to identifying the people who will be involved to assessing progress. For more information, download the full report.
Techstars is the worldwide network that helps entrepreneurs succeed. Techstars founders connect with other entrepreneurs, experts, mentors, alumni, investors, community leaders, and corporations to grow their companies. Techstars operates three divisions: Techstars Startup Programs, Techstars Mentorship-Driven Accelerator Programs, and Techstars Corporate Innovation Partnerships. Techstars accelerator portfolio includes more than 1,700 companies with a market cap of $18 Billion. www.techstars.com
About Innovation Leader
Innovation Leader is a fast-growing media and events company with a laser focus on helping the world’s largest companies build their competitive advantage. Since 2013, Innovation Leader has built the largest network of corporate innovation, strategy, and R&D executives in both public and private companies, helping these executives to strengthen their innovation programs; connect with useful resources, solutions, and vendors; and engage with peers inside innovative labs and workplaces around the globe. For more information about Innovation Leader membership and events, visit www.innovationleader.com or follow us on Twitter, LinkedIn and Facebook.