Earlier this year, McKinsey surveyed 200 corporations, and found that the pandemic has accelerated the need for innovation. In the survey, more than 90% of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years. In contrast only 21% have the expertise, resources, and commitment to pursue new growth successfully.
The world needs entrepreneurs and innovative thinking now more than ever.
We all know that the Toronto-Waterloo corridor is at the forefront of Canadian innovation and entrepreneurship, but the region’s potential to drive corporate innovation is one of the things that sets us apart from other innovation clusters.
What is corporate innovation?
Corporate innovation generally refers to the intentional facilitation of new ideas and out-of-the-box thinking within large, corporate settings. But we believe corporate innovation is more than that. We believe corporate innovation is a symbiotic relationship between the corporate world, incubators, and entrepreneurs that fosters and accelerates new ideas and industry disruption.
Corporate innovation can take many forms, but truly impactful corporate innovation programs have one thing in common. They foster a culture of innovation inside the corporate environment, and they provide opportunities for startups to develop, test, and accelerate the adoption of their innovations.
And that is what the corporate innovation at the AC strives to achieve—mutually beneficial relationships between startups and corporates that drive and accelerate innovation.
Why Startups Need Corporates
Access to big problems that need innovative solutions
While there is opportunity for innovation in every industry, entrepreneurs often struggle to get access to meaningful problems and corporations struggle to get ahead of the curve when it comes to disruptive technologies. Corporate innovation partnerships, like the ones we foster at the AC, provide founders with access to the experts at the forefront of industry innovation. With this access to expertise, startups can validate and test their ideas quickly. Additionally, these corporate partners often become first customers and early adopters that provide the trust and industry validation that forms a foundation for a startup’s early traction and sales success.
Strong relationships between accelerators, corporates, and startups also results in accelerated go-to-market time for new ideas through access to expanded resources and networks. For example, in February of last year, ADT announced its partnership with safety & emergency planning startup; harbor. This collaboration allowed both partners to leverage the technology, network, and infrastructure of the other to accelerate harbors time to market and facilitated the integration of harbor’s technology into ADT’s 24/7 professional monitoring and proprietary mobile safety platform — an industry first offering.
By working with corporates, startups get the distinct advantage of having the resources and manpower of a larger company, while continuing to remain nimble and maintaining an entrepreneurial mindset. The flexibility of being, and operating like, a startup allows for greater risk taking and a deeper understanding of customer needs. While benefitting from corporate resources and network access, the startup can continue to iterate and pivot quickly, appeal to multiple customer segments, and get products in front of customers at a rapid pace.
Why Corporates Need Startups
Trend spotting and future insights
Often, staying competitive means corporates need to not only adopt new technologies but be at the leading edge of innovation in their industries. Getting and staying ahead of the curve requires a deep understanding of emerging technology and trends that could impact or disrupt current business models. This is where entrepreneurs shine. Startup founders are some of the most creative and tenacious people in the world. They are tapped into the latest technologies and how those advancements can be applied to a business environment. They can see a problem or a pain point, create a solution, and then continue to add value with that solution across the business. Tapping into that vision and mindset can help put corporates at the forefront of industry innovation.
Optimizing resources (again)
Fail fast, learn quickly, and pivot with purpose.
Innovators move quickly. To be successful, they need the ability to stay nimble, take risks, fail, pivot, and test new ideas to create innovative solutions that get traction. Innovations within corporate settings tend to lack this quality, not because they are less talented, but because the corporate structure within its multi-layer decision making process and tendency towards less risk tolerance doesn’t lend itself towards innovation.
Creating a spin out company or putting an internal innovation team into a startup-like environment can significantly decrease the time it takes for new ideas to be validated.
One of the most fascinating things about startups is their ability to work with such lean teams compared to corporate settings. By leveraging startups, corporates can increase the efficiency of exploring new product ideas, working with a small team of entrepreneurs who understand how to innovate quickly and creatively on limited resources.
Fostering a Customer-First Culture of Innovation
Startups care about their customers. They have to. Keeping customers happy (or not) can make or break a startup in their early days. Because of this, startups operate with a customer first mindset that puts createing value to customers above all. Startups have the ability to customize and tailor solutions when they see an opportunity to provide value. While most companies would say they put their customers first, putting that feedback into action in a large corporate environment can be challenging. By working with startups, corporates can remove some of the barriers to innovation and build that customer-first culture of innovation that is necessary to stay ahead of the competition.
How We Do Corporate Innovation Differently at the AC
At the AC, we take quite a different approach when it comes to corporate innovation. Rather than focusing on risk reduction for corporates, we’re focused on building deeper, more meaningful relationships with measurable outcomes. By taking our own human centered design process that merges qualitative and quantitative data produced by both startups and our corporate partners – we create a true fit and introductions, that are based on clearly identified criteria, or challenges and opportunities for both parties – giving the highest relevance and chance for success.
Reach out if you’d like to discuss corporate innovation with our team! We’d love to hear from you and start a conversation about how you can get connected to our globally leading innovation community.