In my last post I wrote about corporate incubation/acceleration models, presenting four distinct ones, discussed how to start one of these organizations, and how to increase the value derived from them. In this blog I provide additional details on the topic by:
- Presenting the criteria and guidelines a corporation should use to start an incubator or accelerator. This is particularly appropriate for corporations that are thinking about starting an incubator or accelerator, or have just started one,
- Discussing what the corporation could do with successfully incubated projects, e.g., whether to integrate them to a business unit, or let them operate independently. This is particularly appropriate for corporations that have started an incubator or accelerator and now considering how to be utilize the incubated efforts.
This is a long post, not unlike the previous one. I felt that it was important to provide a comprehensive view on corporate incubators and accelerators with two posts rather than creating a longer series, even though I recognize that the approach may tax at least some of the readers. For this I apologize in advance.
Corporations are establishing incubators, e.g., Samsung, and accelerators, e.g., Orange, in order to advance their disruptive innovation initiatives. They are doing so on their own, e.g., Samsung, Swisscom, or in partnership with independent accelerators, e.g., Disney, Microsoft, and Barclays have partnered with Techstars. The terms “incubator” and “accelerator” are frequently used interchangeably to denote an organization that aims at helping very early stage startups, or even just teams in the process of considering the creation of a startup, get off the ground successfully. They do that typically in exchange for a small equity percentage in each startup. This blog addresses the role of corporate incubators and accelerators in disruptive innovation, rather than the general topic of startup incubation that has been covered extensively elsewhere. It presents:
- Four different corporate incubation/acceleration models.
- The steps necessary for establishing and maintaining one of these organizations.
- A process to help corporations increase the value and success rate they derive from their incubation/acceleration initiatives.
The business models of large corporations are being disrupted faster than ever before, e.g., Netflix is disrupting the video distribution industry, while new lucrative markets being created by innovative startups, e.g., Uber, Nest, and SpaceX. As a result of these developments, corporations are starting to realize they will need to re-invent their disruptive innovation model. We have proposed a new model that brings together corporate venturing, intrapreneurship, corporate development and business development. In order to determine whether they can successfully achieve their disruptive innovation goals, corporations will also need to find a way to measure their track record under this model. For this reason they must identify the right Key Performance Indicators (KPIs), which I call innovation-KPIs, to distinguish them from execution-KPIs. Silicon Valley’s ecosystem, particularly VCs, can play a key role in the innovation model’s re-invention and offer best practices for relevant innovation-KPIs.
Corporations from industries as diverse as agriculture, manufacturing, logistics retail and financial services are being disrupted at an unprecedented rate by a variety of innovations. From technological breakthroughs in cloud computing and big data analytics to disruptions like crowdfunding and social engagement, most of these innovations are created by startups, including many that are based in Silicon Valley. As corporations attempt to address the implications of these disruptions and become more innovative, they are trying to determine how to interact with and benefit from the startup ecosystems creating these innovations. In this series of posts I will present and discuss a new model for corporations to use as they consider disruptive innovation. The model is very much influenced from my experiences over the past 25 years in Silicon Valley as an entrepreneur, startup and large company executive, and investor, as well as by the interactions on this topic I had with over 100 corporations over the past three years.