Due to rapidly changing macroeconomic conditions in all around the world, there is an extensive competition among companies and the need for sustainable growth. Therefore, innovation and entrepreneurship is getting more important for many companies. The swift change in technology and the consumption habits of customers brings the requirement of many new ideas and business models. Companies feel the necessity to make radical changes in their strategies and business models.
Unlike the standard processes of corporations and classical businesses, which can be summarized as making a business plan, providing financial resources, forming a team, developing the product and finally making sales; startups with simplified and agile methods create many opportunities to adapt to the new era.
Steve Blank defines a startup as "an organization created to search for a repeatable and scalable business model".1 Startups-thanks to their agile structure and their flexibility in trial and error approach can respond very quickly to the requirements of this new era due to their ability to quickly test the technology, business model, customer response in the market under the rapidly changing conditions of the period.
Purpose of the Study
The Importance Collaboration between Corporations and Startups
Numerous recent studies reveal that it is essential for companies to constantly seek innovation and renewal in order to adapt quickly to the new dynamics of the market. In an Accenture survey implemented among 5,400 senior executives in 31 countries in 2017; 86% of respondents stated that companies should focus on innovation at an increasing acceleration in order to maintain their competitive advantage.2
The opportunity that startups create in terms of innovation can support organizations for accessing, forming new markets and improving their products. Through collaboration with startups, organizations can test their existing business model by adapting it to different scales. They also can adapt to innovation with less additional cost due to innovative technology, and this collaboration can help them develop innovations that are more suitable for the customer, thanks to rapid testing processes. At the same time, collaboration with startups can help organizations reach a more open-minded corpprate culture and monitor market developments in a better way.
"Large companies have recently realized that their sectors have becoming vulnerable due to startup-led technology and innovation. Instead of considering this situation as a competition between organizations and startups; startups should be considered as potential partners. These type of improved collaboration strategies can create more value for the companies; and more benefit for the consumer and therefore for the whole sector. "3
While startups aim to reach more customers and grow in risky and uncertain environments, organizations have resources, credibility in the eyes of customers and a more stable environment, but on the other hand they have struggle with the challenges of daily unforeseen changes in the sector. Because of the differences related with their operating structures, decision-making mechanisms, financials and market power can also make it hard to establish communication and collaboration between them.
Specific methods can be developed to improve corporate - startup communication and collaborations. This study covers the corporate - startup relationship under 3 main pillars and proposes a methodology that can be applied in organizations.
1. Aim of Corporate - Startup Collaboration
2. As a starting point: Creating Innovation Champions
3. The Process of Creating Innovation Champions
Aim of Corporate - Startup Collaboration
In order to overcome the challenges of establishing corporate-startup collaboration and to determine the right communication models for both parties, the organization should determine the purpose of the relationship at the first hand. The rapidly growing number of programs and calls for startup collaboration triggered by many corporations and innovation agencies cause inefficiency of both time and resources. Because of that, the efforts of employees in institutions that have not identified their own requirements in constructing these relationships and the efforts of startups trying to access into new cooperations remained resultless.
As a result of Nesta's interviews with 60 corporates representatives and startups in Europe, as well as interviews with 50 corporate startup collaboration program managers, innovation managers and C-level employees, it reveals that organizations generally have 4 different objectives in their communication with startups. These are; renewal of the corporate culture, renewal of the brand, solving problems and accessing new markets. 3
Many organizations are interested in working with startups but don't know where to start. Many obstacles such as not being able to set goals when working with startups, not getting information on the relevant subject within standard business processes, and not being able to decide which of the many different programs and applications in the ecosystem to start with cause insufficiency to determine the right strategy and roadmap.
As a starting point: Creating Innovation Champions
Making innovation work and widespread within the organization depends on bringing entrepreneurship into the company. Many companies are adapting internal entrepreneurship programs, organizing startup-corporate meetings on different platforms and developing collaborations with different ecosystem actors to ensure that new ideas are generated and come to life. These approaches remain inadequate when the limited capacity of departments involve in the process.
To establish a cultural infrastructure and ensure a holistic perspective in companies, the transformation of the organization in terms of entrepreneurship becomes important. This can be by involvement of different departments in this process besides innovation and R&D departments and by ensuring sustainable communication between these different departments and startups. The adoption of an entrepreneurial mindset throughout the company by all levels of employees requires creative thinking, taking risks, critical thinking, observation, developing relationships, and making connections between different domains within the company.
At the same time, the contribution of mid-level executives to this communication activity also gains more importance. Mid-level executives can either act as an obstacle to entrepreneurship in organizations or as catalysts and encouragers. At this point, it becomes critical to create a space where mid-level executives can actively participate and lead the company's innovation and entrepreneurship activities.5
Thanks to the startup connections of different departments throughout the company; new ideas that different departments in organizations can come up with through entrepreneurial relationships can introduce new products and services to the market or implement solutions that will support them to improve their current business.
Figure 2. Different business units – Startup Communication6
The Process of Creating Innovation Champions
One of the methods that can be applied to start and expand corporate-startup activities is creating a community by involving different business units to spread the culture of innovation and entrepreneurship within the company, increasing the level of knowledge of this community on innovation and entrepreneurship issues and making it active in the ecosystem.
To develop long-term relationships, it is important to ensure establishing Innovation Champions Community who are familiar with the notions of entrepreneurship and to provide them with the opportunity to participate in the necessary training and events for them to exist in the ecosystem without any intermediaries.
To establish a sustainable connection with the ecosystem and the entrepreneurs as well as the company, Innovation Champions should be in a role that also satisfies the needs of the startups. Innovation Champions -in the role of an domain expert mentor- can also contribute to startup and the ecosystem with the competence and experience they have gained in their organizations, in parallel with the requirements of the external ecosystem.
Choosing the right departments to create an Innovation Champions Community, supporting these people with training, making their first meetings with startups through a mentoring program, ensuring their presence in the ecosystem by participating in various events, and finally creating the opportunity to develop cooperation and investment opportunities will ensure a sustainable process.
1. Selection: Innovation Champions need to be selected among the appropriate employees from different business units to ensure diversity and sustainable communication with startups within the organization. The selected people have the potential to establish connections with startups in their businesses, and the simultaneous creation of the pool of Innovation Champions that consists of experts who can contribute to the startup ecosystem create benefits and provide an advantage in terms of the sustainability and development of communication.
2. Training: To ensure Innovation Champions get to know the ecosystem and have know-how on the startup processes have major differences from corporations, it is necessary to support them with basic trainings. The trainings of the basics of innovation, innovation approaches of different organizations, startup concepts and the journey of a startup, mentorship, and communication styles will enable the champions to learn the basic concepts and thus have a general framework.
3. Mentorship Program: To ensure their presence in the ecosystem, Innovation Champions should contribute to the ecosystem and meet with startups. Making the selection of startups by identifying the requirements of Innovation Champions, the company's focus areas, and the needs in the ecosystem, both parties can benefit by meeting through a long-term mentoring program. Thus, Innovation Champions can better understand the processes of different startups and establish potential collaborations, while startups have the chance to develop and validate their own ideas with the experience of the organization and have the opportunity to gain potential customers.
4. Internal events & programs: Within the training programs, champions of innovation will increase their level of experience and acquaintance with different perspectives by actively participating in innovation events, programs and webinars that will enable them to meet different actors
5. Ecosystem Events: Participation in startup events that have started to increase in the ecosystem, meeting with different startups and different players in these events will increase their experience and different perspectives therefore will contribute to the recognition of themselves and their organization.
6. Collaboration Development: Innovation Champions are provided with the potential to collaborate with the startups they meet in the programs, events and ecosystem events within the organization. These events not only help innovation champions keep up with new technologies and trends, but also provide the opportunity to bring solutions to problems that can be solved in their own business processes and new ideas, products and services to the organization.
7. Investment: Participation of startups in the investment processes to be made by the organization, preferably in the role of an assessment committee in this investment process is something desired. In addition to providing the opportunity to establish potential collaborations with the startup to be invested in, it provides the organization with the opportunity to gain experience in new markets and to access to these markets thanks to the startup contributing the investment process.
Figure 3. Corporate Startup Collaboration - Aim and Role of Innovation Champions
Different approaches that can lead to sustainability in the process of creating Innovation Champions also bring many different benefits to the organization. Training, mentoring programs, participation to in-house external events and programs, and participation in ecosystem activities will refresh the corporate culture and brand, while collaboration development and investment opportunities that can be provided to entrepreneurs will provide the opportunity to solve existing problems in the company and expand into new markets. Figure 3.
Innovation and Its Importance for Turkey
Although there are R&D, innovation and different department collaborations established in many departments in corporations, Innovation Champions Program is an unique example in terms of addressing the issue more systematically, increasing the level of knowledge of innovation and entrepreneurship through a community and developing collaborations. In the first & second program developed at Arçelik Garage Innovation Hub, 51 people completed the program by completing the training.
The 51 program participants who received mentor certificates;
• Attended 34 hours of training
• 20 hours of events with talks & Demodays
• Mentored 140+ different startups
• A total of 250+ hours of mentorship meetings
• 11 different innovation partners.
Training and mentoring activities in numbers are;
Established Innovation Partners:
Recommendations and Conclusion
Corporate-startup collaboration creates many opportunities for companies to adapt today's fast-changing customer requirements and macro-economic world. To establish and sustain these collaborations, it is important for companies to know where to start and to develop appropriate methods in line with their goals. Collaborations that can be established for different purposes such as renewal of the corporate culture, renewal of the brand, solving existing problems, and expanding into new markets all create different opportunities. With Innovation Champions program, it is possible to implement all of these opportunities together at different stages of the process. At the same time, mainstreaming the culture of innovation and entrepreneurship within the company and ensuring the involvement of different departments creates a sustainable perception of innovation within the organization.
This process, which can be applied in different ways according to the requirements and expectations of each organization while providing the practice of innovation in a sustainable way, creates a radical change in organizations.
*This article is written as Impact Project during the TTGV Fellowship Program 2nd Cohort*
1 Blank, Steve, “The Startup Owner’s Manual”, Mart 2012
2 Accenture, “Technology Vision Report 2017”, https://www.accenture.com/us-en/insightdisruptive-technology-trends-2017.
3 Nesta, V. Mocker, S. Bielli, C. Haley, “Winning Together – A Guide to Successful Corporate – Startup Collaborations”
4 Tusiad, Kurumlarda girişimcilik ile değer yaratmak – Kurumların girişimcilik dönüşümü rehberi, Ocak 2019
5 OC & C Strategy consultants, Türkiye’nin teknoloji girişmciliği ekosistemi
6 Startup ve kurumlar arasında iş birliği, ortak bir anlayış için pratik bir rehber
7 KPMG, On the road to corporate-startup collaboration
8 Eyal Rechter, Mentorship Process within Startup Accelerators
9 R. B. de Aguiar, D. S. Silva, C. S. ten Caten, L. C. P. S. Filho, Lean Mentorship: Fitting external support to entrepreneur needs over the startup development
10 L. Strasburger, T. Schulz, The impact of mentorship on startup success: an empirical analysis in the field of startup accelerators