Innovation was arguably 2015’s biggest buzzword for the global tech scene, with accelerator programs popping up more quickly than you can say ‘oh look, another Starbucks’. It didn’t take long for corporates to take notice of the potential opportunity for monetizing innovation and creativity: just this month Topshop launched their venture into the heady heights of tech with an innovation program focusing on wearable tech. Large businesses, which are often guilty of moving slow and erring on the side of caution, are now starting to adopt the accelerator model in new ways to help them stay innovative and quick in an ever-changing market.
Since the first accelerator was set up back in 2005, the year when Rupert Murdoch made us all scratch our heads at his $85M investment in Myspace, Y Combinator has seen huge success with its plethora of start-up stars including the likes of Airbnb and Dropbox. Businesses have caught on, and are now clamouring to be part of the next big tech innovation, and we’re beginning to see the trend of innovation being outsourced en masse.
From a corporate perspective, it’s not just about championing the next Uber or Spotify, it’s about mitigating the risk and digital disruption that these would-be global tech darlings could create. Consider yourself in the shoes of a CEO of a national vehicle hire service, wouldn’t you wish you had your finger in the proverbial Uber pie?
Many of these new accelerators, corporate and independent, are launching in multiple territories. France’s Orange saw the start-up boom in California and decided to launch their Orange Fab program out of San Francisco. Interestingly, this particular program works with a number of large corporates, for potential customer opportunities for its start-ups, with big names such as Visa, Hilton, Airbus, Moet Hennessy and AXA all looking to get in on the action.
Outside of the traditional geographic tech hubs, accelerators are launching in high numbers in areas such as Singapore, Berlin and Bangalore. But multiple experts note that with the ever-increasing high number of accelerators available, the quality of the portfolio of start-ups is coming into question on a more regular basis from the VC community. Before deciding to outsource innovation, it’s definitely worth considering the pros and cons from all angles to ensure it’s the right thing for your business to do.
Pros: The allure of tech and innovation
- Agility – start-ups are notorious for moving quickly and leaving slow moving industry old-timers in their wake
- Lack of bureaucracy – with big business comes structure, hierarchy’s and processes that all too often stifle the creativity needed to be truly innovative
- Specialist skills – outsourcing innovation via accelerator programs means businesses are delivered the opportunity to work with start-ups who have been founded by passionate, skills and tech savvy individuals
- Pick and mix – for the commitment-phobe businesses out there working through an accelerator program mitigates being tied down to an idea or start-up that isn’t quite right – most programs won’t last over much over a 6 month period
- Stay Relevant –younger consumers have snapchatted their way into the global media conversation, staying relevant and keeping your finger on the tech pulse is vital for companies looking for long-term survival
Cons: Why to be wary
- Mis-Match – like a bad tinder date, corporates and startups need to make sure they don’t rush in, carefully selecting your partner in crime takes time and consideration
- Saturation – with a plethora of accelerator programs on the market, some argue that the clout that once came with a name like Y-Combinator just doesn’t have command the same amount of respect it once did
- 9/10 – likewise corporates need to be aware 90% of startups will fail, the selection process is crucial
- Successes – when selecting a program to apply for, founders need to do their homework to see just what historical successes the program has produced
It’s equally important for start-ups to ensure they pick the right program to get involved in; pick the wrong one and no matter how good your venture is, you may never make it out of the starting blocks.
Airbnb is a shining beacon of hope for founders looking to get snapped up by an accelerator program, but the program model is still in its infancy stages. Similar to those start-ups looking for VC investment, finding the right fit of an accelerator program is highly important – you’ll likely be sharing a work space with these people, receiving guidance daily on your product/idea and using their network to help build your company – so making sure you don’t see any potential issues in these areas is going to be highly important.
Got yourself a big idea? Below are some of the best corporate accelerators around with varying areas of focus.
- Jaguar Land Rover
- Time Warner Media
- Wells Fargo
Let me know your thoughts in outsourcing innovation in the comments, or by tweeting me at @AgostinelliAldo.