why corporations engage with startups (powered by usaid)
TRANSCRIPT
MOLDOVAFEBRUARY 17TH 2017
CORPORATIONS & STARTUPSWHY ENGAGE?
+ANDERSEN & ASSOCIATESINNOVATION & GROWTH THROUGH SCIENCE + ENTREPRENEURSHIP
MOREPLUSANDERSEN.COM
MORE ABOUT ME VIDARANDERSEN.COM
VIDAR ANDERSEN • STARTUP FOUNDER • EDUCATOR • INNOVATION ADVISOR
FOUNDING PRINCIPAL +ANDERSEN & ASSOCIATES
CERTIFIED LLP EDUCATOR NCIIA @ STANFORD
THERE IS A DEFINITION
WHAT THE HECK IS A STARTUP
ANYWAY?
A CORPORATION IS A PERMANENT ORGANISATION
DESIGNED TO EXECUTE A REPEATABLE AND SCALABLE
BUSINESS MODEL IN A PREDICTABLE AND STABLE
ENVIRONMENT
A STARTUP IS A TEMPORARY ORGANISATION DESIGNED TO
SEARCH FOR A REPEATABLE AND SCALABLE BUSINESS MODEL IN
AN ENVIRONMENT OF EXTREME UNCERTAINTY
THE TIMES ARE CHANGING
WHY ALL THIS STARTUP
HYPE NOW?
EXPONENTIALTECHNOLOGY DEVELOPMENT
SHORTERLIFESPAN FOR CORPORATIONS
AUTOMATION AFFECTING MOST VERTICALS
MACHINESLEARNING BY THEMSELVES
CORPORATIONSSLOW & RIGID
STARTUPSFAST & AGILE
LEAN METHOD HAS COME FULL CIRCLE
OR OBVIOUS IS OBVIOUS
INNOVATION IS THE KEY
TO GROWTH
VEHICLE FOR INNOVATION & GROWTH
STARTUP =
GROWTH
Uber, the world’s largest taxi company, owns no vehicles.
Facebook, the world’s most popular media owner, creates no content.
Alibaba, the most valuable retailer, has no inventory.
Airbnb, the world’s largest accommodation provider, owns no real estate.
Spotify, the world’s most popular music service, owns no music rights.
- TOM GOODWINSVP HAVAS MEDIA
THE FACTS VS THE MYTHS
SPEEDBOATS VS
TANKERS
10 FACTS CORPORATIONS DO GET IT
1
Traditional Venture Capital is no longer the only way to raise money for startups. DocuSign raised in the same round (Series E) exclusively from the following corporations: SalesForce, Google, Recruit, Mitsui & Co, BBVA, NTT DoCoMo, Telstra and MKI
10 FACTS CORPORATIONS DO GET IT
2
The majority (61.7%) of the unicorns mentioned by the Wall-Street Journal under The Billion Dollar Startups Club have raised from at least one corporate. (not including investment firms and banks)
10 FACTS CORPORATIONS DO GET IT
3
Corporations do not invest only in their own vertical: The online music streaming service Spotify raised money from Coca-Cola.
10 FACTS CORPORATIONS DO GET IT
4
Inhouse R&D is giving way to collaboration with new ventures. 9 out of the 10 biggest R&D spenders worldwide are already working with startups.
10 FACTS CORPORATIONS DO GET IT
5
Not only silicon valley tech companies like Google,but some of the traditional corporate players have explicit ways to invest in startups on a large scale. Ping An Insurance Group has a venture arm: Ping An Ventures.
10 FACTS CORPORATIONS DO GET IT
6
When it comes to collaboration with startups, France (not USA) has the highest percentage of its top corporations engaging startups: 23 out of 25 top corporations are working with startups.
10 FACTS CORPORATIONS DO GET IT
7
Investing in startups is not the only way to collaborate. ProSieben Sat1 Media AG provides advertising time in return for revenues or equity shares through its venture arm (Seven Ventures).
10 FACTS CORPORATIONS DO GET IT
8
Building accelerators,a popular way to help startups,is now done by “non-tech" corporations too. Diageo has an accelerator to create new spirits brands: Distill Ventures.
10 FACTS CORPORATIONS DO GET IT
9
Working alone with startups is not the only option: global corporations do it together as well. The Ecomobility Ventures investment fund has been created by 5 corporations(Air Liquide, Michelin, Orange, SNCF and Total).
10 FACTS CORPORATIONS DO GET IT
10 68% of the top 100 companies from the
Forbes Global 500 are engaging with startups.
& STARTUPSWITH CORPORATIONS
WHY DO CORPORATES
ENGAGE WITH
STARTUPS?
SHIFT HAPPENS
“SCREWED IF YOU DON’T”
FAST SLOW
VS
"In the new world, it is not the big fish which eats the small fish, it's the fast fish which eats the slow fish."
- KLAUS SCHWABWORLD ECONOMIC FORUM
VS
"If you don't create the things that will kill Facebook, someone else will."
- MARK ZUCKERBERG FOUNDER OF FACEBOOK
SOMETHING IN IT FOR EVERYONE
WIN-WIN OUTCOMES
CORPORATION ASSETS
• CREDIBILITY • BRANDING & PR • DISTRIBUTION • SUPPLIERS • FUNDING
STARTUP ASSETS
• SPEED OF INNOVATION • INNOVATIVE IMAGE • REAL INNOVATION • CULTURE TRANSFER
HUGE UPSIDE POTENTIAL
FTW!
SHORT & LONG TERMVALUE DRIVERS
TIMING RISK COST
R&D Long Term High High
Corporate Startup Engagement Medium Term Average Low
M&A Short Term Low High
5 EXAMPLESFROM THE REAL WORLD
HOW CORPORATES ENGAGE WITH
STARTUPS
5 EXAMPLES HOW CORPORATIONS ENGAGE
1Sprint, R/GA, Kaplan, Microsoft, Disney, Barclays, Qualcomm and METRO all have an accelerator powered by techstars.
5 EXAMPLES HOW CORPORATIONS ENGAGE
2 Johnson & Johnson has a co working space with research facility: Jlabs.
JLABS
5 EXAMPLES HOW CORPORATIONS ENGAGE
3Monsanto and Syngenta have a venture arm: Monsanto Growth Ventures & Syngenta Ventures.
5 EXAMPLES HOW CORPORATIONS ENGAGE
4Procter & Gamble has a fellowship program with the accelerator The Brandery in Cincinnati, sponsoring startups.
5 EXAMPLES HOW CORPORATIONS ENGAGE
5 Even the CIA has a venture capital arm: In-Q-Tel, an early investor in Facebook.
MORE THAN ONE WAY TO DO IT
BUT HOW DO YOU START ENGAGING?
HEURISTIC LOW TO HIGH INVOLVEMENT
8. Mergers & Acquisition
7. Investment
6. Spin-Off
5. Accelerator / Incubator
4. Co-Working Space
3. Events
2. Startup Program
1. Support Services
HIGH ENGAGEMENT
LOW ENGAGEMENT
HEURISTIC LOW TO HIGH COSTS
8. Mergers & Acquisition
7. Investment
6. Accelerator / Incubator
5. Co-Working Space
4. Spin-Off
3. Events
2. Startup Program
1. Support Services
HIGH COSTS
LOW COSTS
HEURISTIC LOW TO HIGH RISK SEEKING
8. Investment
7. Mergers & Acquisition
6. Accelerator / Incubator
5. Spin-Off
4. Co-Working Space
3. Startup Program
2. Support Services
1. Events
HIGH RISK SEEKING
LOW RISK SEEKING
HEURISTIC SHORT TO LONG STRATEGY
8. Events
7. Support Services
6. Startup Program
5. Co-Working Space
4. Accelerator / Incubator
3. Spin-Off
2. Investment
1. Mergers & Acquisition
LONG TERM
SHORT TERM
WHO DOES WHAT 262 OUT OF F500 CORPORATIONS
CORPORATE ENGAGEMENT BY CHANNELS AND RANK
TOP INDUSTRIES WHO ENGAGE WITH STARTUPS
94.1% Pharmaceuticals
85.2% Telcos
68.8% Regional Banks
64.5% Major Banks
58.8% Diversified Insurance
TOP INDUSTRIES WHO ENGAGE WITH STARTUPS
100% (7 of 7) Semiconductors
100% (7 of 7) Computer Services
87.5% (7 of 8) Beverages
TOP COUNTRIES WHO ENGAGE WITH STARTUPS
94.1% France
71.4% Germany
71.4% Switzerland
56.8% Japan
53.3% United Kingdom
Orange EADS Credit Agricole Renault BNP Paribas
VW Group SAP Allianz Siemens DTAG
Nestle UBS ABB Syngenta Swisscom
Nippon Tel Softbank Nissan Motor KDDI Seven & I Hld.
Vodafone Standard Ch. SABMiller Diageno WPP
OTHER COUNTRIES OF NOTE FOR COMPARISON
45.5% U.S.A
23.8% China
Johnson & Johnson P & G Google Boeing Dow Chemical
Ping An Insurance Group SAIC Motor Alibaba Tencent Holdings Lenovo Group
THIS IS NOT A FAD
EVERYBODY IS DOING IT
CASE STUDY
JLABS
JLABS accept high-potential companies from diverse healthcare sectors, including pharmaceuticals, medical devices, consumer and digital health.
JLABS
Space Equipment Expertise Ecosystem Channels Funding
JLABS
JLABS
San Diego Flagship
San Francisco South
San Francisco California Institute for Quantitative Biosciences
TorontoCambridgeMA
JLABS JLABS JLABS JLABS JLABS
HoustonTexas Medical Center
JLABS
• Started 2012 • Over 100 companies in portfolio with a
growing capacity to accommodate up to 225 companies across the 6 sites
• Does not take equity or IP (identified JLABS as success criteria)
JLABS ALUMNI
WHERE TO GO FROM HERE
SO WHAT’S
NEXT?
ENGAGEMENTEVOLVING IN PHASES
STEP TOOLS
1. Learn Research, Events
2. PartnerSupport Services, Startup Programs, Co-
Working Spaces, Spin-Offs, Accelerators & Incubators
3. Own Investments, Mergers & Acquisition
DIFFERENT OBJECTIVESDIFFERENT ENGAGEMENT TOOLS
Innovation Culture New Markets Platform Solving Problems
Events
Support Services
Startup Programs
Co-Working Space
Accelerators & Incubators
Spin-offs
Investments
M&A
CORPORATE OBJECTIVESST
AR
TU
P E
NG
AG
EMEN
T T
OO
LS
MOST TO LEAST RECOMMENDED
1
Talk to a pool of startups about their needs as part of your design process. It's easy to assume 'they would love this' when the bar for competitive offerings is getting higher.
START TODAY ENGAGE WITH STARTUPS
2
There are many different ways to engage with startups. The key is to keep in mind your objectives, resources and time frame for expected results at all times.
START TODAY ENGAGE WITH STARTUPS
3
You can start small, choosing one channel of engagement at a time and iterate fast based on the results and buy-in. However if you don't shoot for big enough wins from the get go, there may not be enough to show to get you more resources.
START TODAY ENGAGE WITH STARTUPS
4
Select the right partners to share the knowledge and minimise risks. Doing it alone can be scary. Feel free to talk to us at +ANDERSEN & ASSOCIATESif you need some help along the way.
START TODAY ENGAGE WITH STARTUPS
5Whatever you choose to do, be prepared to
work at the speed of startups. Don't keep them waiting on you. You don't want the engagement to backfire.
START TODAY ENGAGE WITH STARTUPS
DO OR DO NOT
THERE IS NO TRY