COLLABORATE TO INNOVATE

COLLABORATE TO INNOVATE HOW CAN STARTUPS AND CORPORATES PARTNER FOR SUCCESS?

INTRODUCTION 03 STARTUPS INSIGHTS FROM STARTUPS WORLDWIDE 04 FAILING TO DISRUPT 05 REASONS TO COLLABORATE 06 TAMING A CORPORATE GIANT 07 IT’S HOW HIGH YOU BOUNCE 08 RECOMMENDATIONS: TIPS FOR STARTUPS 09 CORPORATES CONTENT INNOVATE TO SUCCEED 10 THE FEAR OF DISRUPTION 11 BENEFITS OF COLLABORATION 12 FINDING THE RIGHT PARTNER 13 SECRETS OF SUCESS 14 RECOMMENDATIONS: TIPS FOR CORPORATES 15 FINAL REMARKS 16

03 INTRODUCTION THE PERFECT STORM The oil tanker analogy for big business is very much a This creates a perfect storm. Corporates need truism. Even for the most innovative of corporates, the startups and startups need corporates. That’s the sheer volume of people, geographies and processes premise behind Startupbootcamp. But what is the that can slow down their world makes working with reality of them working together? agile, enthusiastic startups hugely appealing. To find out, we surveyed Startupbootcamp’s alumni Likewise, startups are determined to tap into the base of more than 350 startups and gathered 64 resources, customer base, experience and finance detailed responses from a large mix of industries of the corporate world. It’s a rare entrepreneur who and regions across the world. We also conducted thinks they can go it alone. Collaboration is at the in-depth interviews with six key corporate partners forefront of everyone’s minds, and most startups know (Cisco, Eneco, ING, Intel, VINCI Energies and Rabobank) that collaboration is critical to help sell their product about their experiences of working within the startup or bring it to market. ecosystem.

04 INSIGHTS FROM STARTUPS ACROSS 13 INDUSTRIES WORLDWIDE This report reveals the results of our research, WHICH INDUSTRY IS YOUR COMPANY IN? as well as providing advice for both corporate and startup audiences from some of the most L M experienced innovation leaders in the market today. K It’s a “must read” for any entrepreneur or anyone J in a corporate that wants to tap into the startup I ecosystem to accelerate innovation within their A business. This page provides an overview of the H startups that took part in the research. G IN WHAT YEAR WAS YOUR COMPANY FOUNDED? F Before 2010 1.6% B E 2010 4.7% D 2011 C 3.1% A B2B/Enterprise 26.6% 2012 B Finance 15.6% 12.5% C Transportation 10.9% 2013 D Lifestyle & Media 7.8% 17.2% E Energy & Resource 7.8% 2014 F Education 6.3% G Electronics & Manufacturing 6.3% 23.4% H Marketing & Advertising 6.3% 2015 I E-commerce & Retail 3.1% 29.7% J Telecommunications 3.1% K Health/Medical 3.1% 2016 L Security 1.6% 7.8% M Smart Home 1.6% WHERE IS YOUR COMPANY BASED? All Others 17.6% Germany 10.9% Spain 9.4% United Kingdom 7.8% Denmark 6.3% United States 4.7% Austria 4.7% Singapore 4.7% India 3.1% Ireland 3.1% Israel 3.1% Slovenia 3.1% Netherlands 1.9%

05 CORPORATES UNLOCK SUCCESS... BUT FAIL TO DISRUPT The pure entrepreneurial passion and focus of DO YOU BELIEVE CORPORATES startups to create a new product or service that GENUINELY DISRUPT? disrupts a market is rarely matched in the corporate world. However, startups just don’t have the resources or experience to make their dream a reality without corporate collaboration in some form. Even unlimited YES funding (if it were available) won’t guarantee success. 28.1% Unless you’re Amazon or Uber, big businesses are very likely to be key to your business plan, whether NO as a partner or a customer. Unsurprisingly, given 53.1% our program’s focus, startups we surveyed agreed big businesses play a key role, with 70% stating I DON’T corporates were fundamental to their success. KNOW 18.8% HAVE YOU SUCCESSFULLY HOW RELEVANT IS IT FOR YOUR COLLABORATED / DONE BUSINESS COMPANY TO COLLABORATE WITH CORPORATES? WITH CORPORATES? YES NO N/A 70.3% 26.6% 3.1% of startups believe it’s very relevant to partner with 70% corporates 47.1% Sold to corporates 41.2% Pilot project However, despite the clear belief among startups 8.8% in the importance of corporate collaboration, over Distribution or resale half of our alumni do not currently feel corporates are successful in creating genuine disruption. While corporates can bring experience, investment and best practice, it seems this isn’t a one-sided partnership, as startups bring the agility and fresh 2.9% Marketing thinking to potentially shake up a market.

06 SAVVY STARTUPS THEIR REASONS TO COLLABORATE Our research found that the most popular driver for development process. Only a small number look at startups to collaborate with corporates is because joint PR or marketing initiatives prior to they see them as the ultimate customer for their launch, even though this can boost awareness and product or service. By working together, they’ll find visibility to investor audiences. immediate sales opportunities that will help to build funds and credibility or obtain insights and feedback Startups are more savvy than ever about the to fine-tune their approach when selling to big reality of being bought by a corporate and know businesses in the future. it’s never an easy process. Rather than seeing the dollar signs of acquisition as the end goal of These collaborative partnerships often generate corporate collaboration, they understand the the most value when the relationship is in place at unpredictable planning that is part and parcel of the critical stage of determining proof of concept, being acquired. The focus instead is on the end when startups can typically concentrate too much result of product development, with a business on product development, rather than what will keep valuation considered only once the true value of their business funded. Corporate partners, especially the innovation is clear. those matched appropriately to the startup’s industry, will bring the market knowledge and expertise to help Startups are ambitious and know what they want plan for the long term. from corporate relationships. But what do early stage businesses think about the reality of working The key focus for startups is to nurture these with larger companies and what are the main road corporate relationships during the product blocks that they want to overcome? WHY COLLABORATE? E D C A 45% of startups are looking to sell to corporates B A 45% of startups are looking to sell to corporates B 30% of startups want to collaborate with corporates to pilot a project or for a proof of concept C 17% want to partner with a corporate for distribution / resale purposes D 5% see corporate collaboration as a marketing / PR opportunity E 3% want to be acquired by corporates

07 HOW DO YOU TAME THE CORPORATE GIANT? While there are clearly many advantages to partnering find the complicated and lengthy internal processes with corporates, startups aren’t approaching this within corporates to be the biggest challenge when collaboration with rose-tinted glasses. They know trying to collaborate with them. It can be hugely there are challenges that need to be overcome and frustrating for the fast-moving entrepreneur when the 72% of startups we surveyed had concerns prior timelines start moving at the slower pace of the to working with big businesses. corporate partner. This will be a challenge we’ll tackle later when our corporate interviewees offer advice for The first hurdle is simply knowing how to make startups. contact with corporates in the first place. Around two in five (39%) of startups are unsure about who Another cause for concern is protection of the to approach within the businesses they’ve identified, startup’s IP. Small businesses often fear the resources and this isn’t a surprise. Even if a business has an of larger organisations and worry that it could be easy innovation practice, there could be multiple people for their idea to be taken, replicated and implemented with varying remits to talk to, and they are likely to without them seeing any benefit. It’s rarely a problem be inundated with unsolicited approaches. Working in reality, as corporates are likely to be too committed with organisations that can facilitate this process to delivering their own road map to change tactic, becomes highly valuable, which is when programs like but 8% of our survey respondents are still concerned Startupbootcamp’s come into their own. their idea would be stolen. It suggests a need to build trust at the early stages of the corporate collaboration Once startups have their foot in the door, the issues and underlines the importance of cementing solid are not over. Nearly three quarters (70%) of startups relationships. WHAT IS THE BIGGEST CHALLENGE WHEN TRYING TO WORK WITH CORPORATES? 70% of startups 70% experience a complicated or long internal process working with corporates 9% of startups feel there is 9% no single point of contact 4% of startups believe 4% there is a lack of priority and uncertainty

08 IT’S NOT HOW FAR YOU FALL, BUT HOW HIGH YOU BOUNCE Tenacity. This is one of the most critical characteristics PERSEVERANCE PAYS OFF of a successful founder. Many startups now wear their FOR STARTUPS failures and pivots like a badge of honour, showing how they persevered through adversity. And this starts from the very beginning. In a bid to build bonds with corporates, 59% of our responding alumni admitted to sending or making in excess of 10 emails or calls 59% of startups have prior to joining one of Startupbootcamp’s programs, 59% made more than 10 in order to reach out to corporates and start that emails / calls to reach fundamental relationship that could open doors and out to corporates opportunities. The good news is that, for the right product or service, this perseverance does pay off, with 70% of our startups revealing they have successfully collaborated or done business with a corporation. While 50% of our survey respondents have successfully sold their product or service to a corporate, half of those took six months to close the deal! It took nearly half (48%) 48% of startups more than six months to sign a deal HOW LONG AVERAGE ESTIMATE DID IT TAKE with a corporate FOR YOU TO SIGN A DEAL WITH A CORPORATE? 1-2 months 7.8% 3-4 months 15.6% 70% of startups have 5-6 months successfully collaborated 10.9% 70% and done business with More than 6 months a corporate 48.4% Not relevant 17.2% WHAT’S THE SOLUTION? Industry-specific accelerators and dedicated networking events for corporates and startups to meet, build foundations and inspire each other are just a few ways that the issues raised from our research can be turned on their heads.

09 COLLABORATION TIPS FOR STARTUPS 1 Research the company 2 Understand the and where they are in corporate’s objectives. their innovation cycle. Are they looking to invest Is this the first time or acquire in the future they have worked with or are they just looking a startup? If so, be for a new solution?? prepared for things to go slow. Understand the Be aware know who 3 company structure. 4 you’re talking to and Where does the budget understand their come from for the procurement policy. partnership? Who does that department report to? Recognise your stage 6 Ensure your objectives 5 and get involved in the are aligned and your right programme to solution / product solves support through your a genuine problem for development. the corporate. Don’t skip on legal Don’t expect to get 7 support. Lawyers may 8 paid - at least at first. be expensive but when Most initial corporate it comes to corporate partnerships are for partnership negotiations pilots and PoCs that and legals it’s worth won’t lead to immediate getting a good one. revenues. 9 Be realistic. Even 10 Look at the bigger the most innovative picture. Lots of corporates will work corporates look to make at a slower pace than exclusive relationships a startup is used to. or deals; make sure you Chasing them every day think about your market. will just annoy them.

10 CORPORATES AND INNOVATION INNOVATE TO SUCCEED There are very few corporates who haven’t woken up to their need to innovate. Whether they’re an energy company wanting insights into customer behavior, a bank looking for a new business model to build customer loyalty, or a technology business like Intel or Cisco with a huge dependency on R&D, corporates are becoming acutely aware of the importance of innovation for survival. But it’s not just about survival. PwC’s 2016 Global Innovation 1000 study highlights that those companies allocating 25% or more of their R&D budgets to software offerings report faster revenue growth than those allocating a smaller portion. While enterprises recognize the need to be innovative, the reality of changing their culture and internal processes, carving out time for people to be innovative, and aligning various initiatives with the bottom line is often too challenging. “Innovation has enjoyed a big hype over the last few years. Companies start to understand innovation is much more than having ‘good ideas’; it is about culture, business processes, planning and strategy,” explains Jorge Rivero, Innovation Director at VINCI Energies, a Startupbootcamp partner for the Smart Transportation and Energy program in Berlin. Innovation is much more “ than having ‘good ideas’; it is about culture, business processes, planning and strategy.” Jorge Rivero, Innovation Director at VINCI Energies

11 THE FEAR OF DISRUPTION TACKING INNOVATION FROM INSIDE-OUT While the majority of organisations appear to be talking the talk, with at least three-quarters of CEOs from the PwC Global Innovation Survey regarding innovation as at least equally important to operational effectiveness, many still have a long way to go. As Glenn Bijvoets, Senior Innovation Officer at Smart City and Living Program partner Eneco comments: “Many other corporates aren’t embracing innovation wholly. They are still innovating incrementally, not radically, and are afraid of disruption.” Tackling innovation from the inside out requires Instead of looking only at significant cultural shift and investment. Yet the “ potential to make changes from the outside in and running our own innovation collaborate with the startup ecosystem is proving hugely popular. Over 180 independent accelerators projects, we had to redefine worldwide offer a variety of ways to help introduce innovation to the enterprise and speed up the pace of our strategy and extend change. innovation activities to link “The incumbents don’t have the primary control of innovation anymore,” says Harrie Vollaard, the FinTech ecosystem Head of Innovation at Rabobank, a partner for Startupbootcamp’s FinTech and CyberSecurity by collaborating with new program. “Instead of looking only at running our own innovation projects, we had to redefine our FinTech startups.” strategy and extend innovation activities to link the FinTech ecosystem by collaborating with new FinTech startups.” Harrie Vollaard, Head of Innovation at Rabobank Jorge at VINCI Energies agrees: “The best ideas and opportunities involve working together with customers, other partners and even competitors. As simple as it may look, it requires lots of courage and generosity to truly collaborate in order to make a difference to the status quo.” Many other corporates “ aren’t embracing innovation wholly. They are still innovating incrementally, not radically, and are afraid of disruption.” Glenn Bijvoets, , Senior Innovation Officer. Eneco

12 THE BENEFITS OF COLLABORATION ARE FAR REACHING The benefits of corporates fostering innovation with startups are wider reaching than protecting the industry position of the corporates. As Harrie at Rabobank points out, in the long run the wider economy benefits with the preservation of fast- growing industries in the region and the creation of jobs. On the other hand, customers or clients also stand to do well, as multinationals work hard to deliver a better service in an effort to attract their business or stay competitive. But some of the big winners from startup collaboration initiatives are often the employees within the businesses themselves. Many of the corporate executives involved with Startupbootcamp will attest to the advantages of being immersed in the startup culture through initiatives like becoming ‘intrapreneurs in residence’; designed to help absorb innovation culture first hand and apply those learnings back into their day-to-day jobs. Companies such as Startupbootcamp’s global partner Cisco take this one step further by involving wider employees in an internal mentoring program with startups to help open up people’s minds to innovation. This can have further reaching benefits in terms of attracting and retaining new talent. With two-thirds of millennial workers expressing a desire to leave their jobs in the next couple of years, according to Deloitte’s 2016 Millennial study, businesses need to appeal to their skills and sense of purpose in order to appeal to the 62% of millennial workers who identify themselves as being innovative [Deloitte Millennial Innovation Survey 2013]. Looking further to the future, Florian Piroth, EMEA Startups Program Manager at Startupbootcamp global partner Intel, sees massive opportunity in the startup ecosystem and not just from an innovation point of view. He explains that many startups need existing technology to bring their business vision to life. This generates great potential, not just for leads, but for building future goodwill. ...any cooperation with a “ “Everyone is hunting for the next big thing, and Intel startup has to make sense is working hard to provide unbureaucratic support to the best of the millions of tech startups worldwide. from the beginning with a It’s a very emotional time for startups and we want to be there for them with both the superior technology clear use case and focus.” to help development and the know-how to support them. Even if they don’t find success, it’s important to build early-stage relationships and goodwill with the Florian Piroth, EMEA Startups Program Manager, Intel startups. Winning their hearts and minds is a good investment,” explains Florian.

13 FINDING THE RIGHT PARTNER REQUIRES COMMITMENT There are many challenges cited by corporates about gap in solutions that we are looking for and that mutual working with startups, including differences in pace, objectives are satisfied.” vocabulary, expectations, professionalism and even scaling issues. However, most of these are obstacles Jorge Rivero from VINCI Energies agrees: “It’s important that can be overcome if the mutual desire is there and to identify the startups that have potential as a an established innovation strategy is in place. balanced team - not only technical - but business people too. This is where Startupbootcamp has helped As highlighted in our alumni research earlier, it’s the us most.” agile startups who need to make the most of the adjustments, which can be frustrating. Florian from Once a connection has been made between an Intel comments: “It’s hard for startups to get used to enterprise and a startup, it’s important that the startup corporates, specifically with their agendas and ways of founder makes their point quickly and drives working. Intel has a strong value proposition and any the relationship. Corporates get very busy and it’s easy cooperation with a startup has to make sense from for things to get overlooked, despite best intentions, the beginning with a clear use case and focus.” warns Florian from Intel. Finding the right partnership is by far the most It’s also important that startup founders are clear critical challenge when collaborating. While 39% of about their role when collaborating explains Lodewijk the Startupbootcamp alumni weren’t sure who to Bonebakker, Head of the ING Customer Experience approach within their targeted organisations, the Center, and a partner for Startupbootcamp’s FinTech flipside for large organisations is validating who the and CyberSecurity, and the Smart City & Living right startups are to invest time into. program: “Most startups don’t have sufficient banking knowledge to easily add value. At the same time, their Tom Kneen, Head of Business Development for Cisco’s pace of innovation is very helpful and we bring the British Innovation Gateway, explains: “We have no knowledge of the regulatory environment, which seems problem finding startups, but the challenge is finding to be the most successful collaborative model. Startups the relevant ones that will support our business with a specific skill that can be integrated into the objectives and get the balance right. We qualify banking systems without direct customer connection startups carefully to ensure they will genuinely fill a are easier to collaborate and integrate with.” We have no problem “ finding startups, but the challenge is finding the relevant ones that will support our business objectives and get the balance right.” Tom Kneen, Head of Business Development for Cisco’s British Innovation Gateway

14 PLANNING AND PROCESS ARE THE SECRETS OF SUCCESS In summary, according to Florian at Intel, working with startups has huge benefits, but requires a streamlined and centralised program with rock-solid internal mentoring processes and clear measurability, KPIs and recognition. Tom from Cisco agrees: “Once you’ve got those steps right, working with startups can be brilliant!” TAKEAWAYS It’s clear from the research of both our alumni base and our corporate partners that successful collaborations can unlock game-changing mutual benefits, but getting to that point is not without its challenges. Working with organizations such as Startupbootcamp ‘who have a wealth of experience in helping startups and enterprises forge fruitful partnerships’ can help overcome these obstacles. Below are some top tips to help you benefit from the experiences of our portfolio companies and the partners we work with.

15 COLLABORATION TIPS FOR CORPORATES 1 Get buy-in throughout 2 Have a startup your whole company. innovation champion You can’t just mandate and encourage them from the top, you need to get immersed in the the people who will local startup ecosystem. have to implement. Don’t isolate your Create the right 3 innovation team. It’s 4 infrastructure and an inter-departmental processes - sandboxes, activity - from legal, risk, APIs, test data for new procurement and IT. solutions, and fast-track procurement processes with streamlined SLAs. Identify the right Understand how 5 KPIs for innovation. 6 startups think and Traditional metrics won’t be aware of their often reflect the true reservations. value of innovation. 7 Ensure the startup is 8 Collaborate, don’t complimentary to your dominate. Recognise business. Don’t just work that the startups are with a startup because bringing value and their product is ‘cool’. are generally wary of corporates. 9 Startups change fast, 10 Move fast. Understand but recognize that you startups can be born won’t, at least not yet. and die within the space One partnership with of time it takes for you to a startup won’t change negotiate a contract! your company. It has to be part of a long-term strategy and solutions.

16 FINAL REMARKS MAKING A CHANGE With this vision report, our aim was to create a document highlighting the challenges, opportunities and realities of startup corporate collaborations. While the collaboration landscape has matured significantly over the last couple of years, with more than 70% of the alumni surveyed reporting to have collaborated with corporates, yet our report highlights that there is still work to be done. And as we continue to expand Startupbootcamp globally, it’s even more crucial to not only understand the challenges and identify ways of overcoming them, but also to create an environment that supports open dialogue and greater transparency in a space overshadowed by hype. Andy Shannon Head of Startupbootcamp Global

Acknowledgements We’d like to thank our corporate partners Intel, Cisco, Vinci Energies, Rabobank, ING and Eneco as well as our alumni for taking part in this report and sharing their valuable insights. About Startupbootcamp Startupbootcamp is a global accelerator group with 17 industry-specific startup programs around the world. We partner with leading global brands to support the next generation of innovators. Since founding in 2010, we have worked with nearly 400 founders, 250+ global brands and facilitated hundereds of partnerships between our alumni and corporate partners. For more information about Startupbootcamp www.startupbootcamp.org For media inquiries [email protected] For partnership inquiries [email protected] Join the conversation #Collab2Innovate @Sbootcamp www.linkedin.com/Startupbootcamp www.facebook.com/Startupbootcamp