Innovation: A Marketplace Model to Ensure Success

Innovation: A Marketplace Model to Ensure Success

There’s a worrying disconnect between big corporates and small start-ups that’s causing great opportunities to fall through the cracks. Each has something to offer the other and when the relationship is right, together they have something incredible to offer customers. Why then, are we not seeing greater collaboration that could redefine entire industries? As with most things in business, there is more than one answer, and as with all success stories in business the problem presents an opportunity.

At The Growth Works, we’ve partnered many start-ups and corporates to come together, and are passionate about the potential. We chatted with Remus Radvan, the man behind some of the start-up collaborations at Telefonica. He offered insights into why corporates don’t engage properly with start-ups and how an open market model could provide shared rewards for all stakeholders, and most importantly the consumer.     

Remus highlighted the disconnect by describing how difficult it is for a dynamic start-up, with their focus on product development, to show deliverables within the framework of a large corporate structure.     

“The challenge I see out there is that getting deliverables is difficult. You have a very dynamic organisation like a start-up that doesn’t have their technology or processes in place yet. Then you have a huge incumbent that has processes in place, sometimes more than necessary. Political, structural, financial, and legal requirements all need to be satisfied and that takes a lot of resources from the start-up side.” At The Growth Works, we’ve seen corporates take three years to onboard a new partner, while others can take just a few weeks to tick all the requirements – why the differences?

It is in this problem, deep in the corporate weeds if you will, that the solution lies. Here is where a marketplace offers solutions for both sides. Ensuring deliverables and processes are clear for the corporate and offering guidance and support for the start-up. 

 

Why use an intermediary?

Corporates have typically done a poor job of supporting innovation through partners themselves. The most successful turn to a specialist who has learned from past experiences.

They provide Translation, and that doesn’t just mean explaining tech to a CFO or explaining legalese to an engineer. It goes far deeper than that. It’s relationship building, cultural integration, systems and process alignment. It’s turning needs into deliverables. 

“The start-up needs to understand how they should play the corporate game.The corporate should understand what fits their needs. So only a start-up guy, a very innovative guy that’s out there in the space can look out for the best solutions. This is why open innovation platforms and accelerators are there, to be the buffer between them.”     

Buffer is an interesting choice of words, it implies there needs to be a safe distance between the corporate and the start-up in order to avoid friction, while being close enough to integrate and meet needs. This metaphor really highlights the importance of translation. It demonstrates the two different worlds inhabited by both stakeholders in corporate and start-up relationships.

Translation, however, is almost the second part of the relationship. Equally important is impartial insight and knowledge. A third party with unique and separate commercial KPI’s is able to deliver the best candidates to meet the needs of the corporate without being bogged down by the politics of internal innovation.   

 

Think small. Get started. Win big. 

When thinking about innovation it can be tempting to think big. Outline a 20 year plan. Imagine the future, search the landscape and picture yourself as the winning partner to Google, Amazon or Facebook. That’s not always the best way forward, and definitely not always a good way to succeed. Look within. Start with a bottom-up discovery. Look for the problems within and then find the solutions with a good partner. 

And think fast. “Is there any solution that could be plugged in, maybe in two quarters. Rather than trying to go through the same cycle of innovation that is done throughout the years.”

Getting started is the best way to get started. Innovation encourages innovation. It brings other ideas out of the woodwork panelling on the boardroom walls. Don’t wait for the big idea, find the small problem.    

“I’ve seen more successful case studies where corporates use open innovation platforms for getting big contracts. Customer experience works very well when you don’t have to plug a lot of things.” 

ChargedUp and O2 partnership is a great example of how a simple solution, part of Wayra, Telefonica’s accelerator, solved a big problem for customers: running out of charge while on the go. A dock of battery banks deployed in O2 stores allows customers to stay fully charged and giving access to ChargedUp’s 1500 locations for O2 priority customers is a great experience to offer for a mobile network. The same solution inhouse could have taken years to bring to market. Instead they could rely on a team whose core business was getting this delivered.

 

Include, enable, celebrate.

The third party managing your innovation is not merely a go between but a ‘go within’. They should coach, frame and enable the innovation and development of new products within an organisation. They should be encouraging innovation within the organisation while searching for solutions outside. 

The intermediary or marketplace should not take ownership of the innovation process. It should be used to celebrate those who are innovating within their departments, coach those who are developing solutions and create frameworks for those who want to do so in the future. 

 

Corporate preparedness.

Identifying the problems, then finding and vetting the start-ups who can deliver the solutions is only the beginning. The tough part is integrating the start-up and solution into the corporate systems and processes. Bring them on board and ensuring compliance. Seamless integration is key to delivering great solutions quickly and affordably. 

Here, corporates really can do more. Do they have the technology to enable others to connect? Is documentation ready so partners can connect to their systems? As Remus states about what it takes to be successful, “on the integration layer I would see someone who builds an open innovation ‘API’ including documentation, tech stack, process, who will do what so when corporates go out, they are ready to internalise faster. This adds value to both businesses but especially for startups.”

This is where a third party becomes invaluable – preparing both sides of the partnership to engage. Someone with an understanding of the problem and an eye on the potential solution. You need a third party with knowledge of big corporates and the start-up environment. Someone who can handle contracts, API and funding challenges while acting as a cultural, legal ad tech translator.  

 

In summary

Corporates are delivering huge commercial and customer value through third party innovation. Many are building strong partnerships and building solutions and technology together. It isn’t easy, not all partners are right for each other, and everyone must be prepared for the journey.

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