As organisations seek to find more effective ways to innovate, we are increasingly seeing them enter into collaborations — whether that’s corporates launching their own internal incubator programmes, or start-ups connecting with blue chip companies to establish mutually beneficial relationships. At our latest ZX.YCN event, we explored how partnerships between challengers and incumbents are helping companies mine one other’s assets and expertise, to foster innovation within corporates, and help start-ups scale at speed.
Through a panel discussion, moderated by YCN Founder Nick Defty, we heard first hand experiences from both sides of the fence. Joining our panel were Tesco Labs‘ Head of Technology Research Paul Wilkinson, ZX Ventures’ Data Scientist Olmo Martinez, Co-Founder of Founders Factory George Northcott, and Gerard Keeley — co-founder of Vidsy, a start-up to have recently passed through the accelerator programme.
Below is a film from the morning, and a write up of learnings too.
When large corporate companies come into contact with smaller start-ups, it can often be tricky to navigate the cultural differences associated with each. With unwieldy processes often involving multiple stakeholders, the internal bureaucracy at a larger organisation can come as a shock to start-up collaborators, used to working quickly, Gerard explained.
But, as we learned from all our speakers, partnerships offer valuable opportunities to borrow from one another’s approaches.
As Paul described, the team at Tesco Labs often lead the way in establishing more agile processes, trying out news ways of working and, if successful, encouraging other teams across the business to adopt.
As a startup building a product that will be used by bigger brands, Vidsy has found it helpful to work with organisations such as The Guardian, giving them the opportunity to better understand the processes and problems at play, to determine whether the model they’re building offers a workable solution.
Educating internal teams
For Tesco and other corporates driving innovation from the inside, it’s essential to make your work accessible, and articulate the value of what you’re doing to the organisation at large, said Paul.
“It’s difficult to sell the idea that what you are working on is going to disrupt the core of the business,” he said. To help put the Lab’s work in context, the team plays a role in helping staff see how the world is changing, educating the wider company about the potential of VR and other new technologies.
As well as making research and reports accessible to everyone at Tesco, external press also helps to drive internal interest and understanding — prompting people to ask questions about the Lab’s new projects. Of the 20-strong Tesco Labs team, there is one role entirely dedicated to managing communications across both internal and external channels — to encourage people to engage with the Lab’s innovation efforts. As Paul put it, “We don’t want to be an ivory tower.”
Of course there are limitations to these internally-driven efforts, and it’s often beneficial to look to outside partners to help spur on innovation too.
“It is difficult for businesses to build something internally that is disruptive to its core,” said George. Counting the likes of Easyjet, The Guardian Media Group, L’Oreal and Aviva amongst its investors, the Founders Factory corporate-backed model helps partner organisations with startups working in relevant sectors. As investors, the corporates own an indirect equity stake in each startup, and work closely with each company to discover how the new products they are developing might help address their own existing challenges.
The model aims to give corporates access to the advantages of innovation, with less of the risk and resistance that might be encountered when driving it internally.
For startups, connecting with corporates can offer mentorship, commercial opportunities, and access to assets such as anonymised data sets, that can allow them to build on and prove their new models.
Importantly, these corporate investors do not have a controlling stake in any of the startups they invest in, and the startups are free to work with any competitor organisations. “We have to give reassurances around scaling and competition,” George said. “We wouldn’t be able to attract the startups if that wasn’t the case.”
Dealing with data
Like any large organisation, AB InBev has vast swathes of consumer data. As Olmo explained, his role as a Data Scientist entails asking the right questions of that data, in order to gain a greater understanding of consumer behaviour, problems and needs.
He argued that APIs are key to driving innovation, allowing external parties to identify problems and opportunities, and create their own solutions and ideas to address them. “There is always more talent outside your organisation,” he said, explaining that companies need to build APIs that make datasets available to third party developers.
Paul envisioned a future where customers will have “granular control” over the data they share, choosing for example to reveal information about past purchase decisions in order to receive a more convenient service, while keeping personal information such as where they live private.
A printed briefing expanding on the subjects explored at the event will be available to Members shortly.
Thanks to all our speakers, and to Owen Richards for the photos above.