Strategy, support, speed: 12 success tips for corporate accelerators in the innovation race
Startups, investors, corporate innovators and accelerators gathered in Bengaluru recently to discuss how to improve the accelerator model of engagement between corporates and startups.
The recent Shell Energy Entrepreneurship Conference 2018, held at the Shell Technology Centre in Bengaluru, featured a range of experts speaking on the challenges and opportunities in the energy sector in India.
Karnataka State Social Welfare Minister Priyank Kharge reaffirmed the state’s commitment to entrepreneurship, particularly in the social sector, via grants for innovators. Demos were presented by five startups who graduated from the Shell E4 Hub: Detect Technologies, IoTrek, ION Energy, Trashcon and Ossus Bio.
With the accelerator model of innovation ecosystem gathering steam in India, particularly corporate accelerators, a parallel track at the conference focused on success tips for sustaining such accelerators. Speakers included Guhesh Ramanathan, Founder-CEO, Excubator; Puneet Kumar, Vice President, Nexus Venture Partners; and Kirk Coburn, Shell Technology Ventures (Shell's corporate venture capital fund).
Here is my pick of 12 key success tips for corporate innovators and startups, based on the wide-ranging discussion. See also YourStory’s Startup Hatch series of profiles of accelerators, incubators, makerspaces and co-working spaces in India.
1. Vision and strategy
In some cases, corporate accelerators have themselves not set a clear vision or purpose of the startup engagement. Is it to create the next unicorn? Or sell more products from the corporate portfolio? Or to find the next big idea, or validate it? A set of primary and secondary objectives should clearly be defined at the outset, for different time horizons.
2. Departmental alignment
It is key for the various departments in the corporate sector to be aligned in terms of accelerator strategy, investment, management, mentorship, startup engagement and impact assessment. Otherwise, needless turf wars may break out in terms of who owns the IP from the startup engagement and how to proceed once the startup graduates. This may end up harming the startup as well in terms of growth prospects and time to market.
3. Business unit support
Some corporate accelerators are launched out of a sense of FOMO (fear of missing out), and may not have adequate support from the business unit running the accelerator. Corporates must make sure they are able to offer deep engagement to the startup, or are committed to improving their efficiency, or are capable of exploring new or adjacent markets.
A startup needs more than office space in an accelerator – it needs quick validation, deep industry connects, expert mentors, and a wide market exposure. All this calls for more budget and allotted time from corporate resources, which may not have been factored during early discussions with the startups.
5. Engagement structure
The physical space in which the startup operates during the accelerator engagement needs to be carefully planned and managed by the corporates. They are generally regarded as “outhouses” or even “demilitarised zones”, where a certain distance or separation is needed for creative space as well as security. This also applies to formal and informal community activities conducted in the accelerator space and in external locations.
6. Engagement period
By definition, an accelerator engagement is one of intense activity, discipline, rigour and focus. Three to six months is the usual engagement period; extending the period may lead to exhaustion for the startup, but shortening the period does not create enough time for product refinement or market connects.
7. Engagement intensity
The accelerator needs a high-touch approach to succeed, not a low-touch one. The interactions between startup and corporate experts need to be deep and ongoing, so that implicit and tacit knowledge are shared and not just explicit or formal knowledge.
Startups need more than just introductions to customers, but some facilitation as well. They can benefit from soft-skills training for talking to corporate partners, which goes beyond dressing up slide decks.
8. Mentor coordination
Sometimes, corporate mentors talk at cross-purposes to one another when engaging with a startup. While some variation of opinion is expected among experts, too much contradictory or even conflicting advice can actually end up confusing the startup. In fact, one of the hardest challenges for a startup is how to assess advice.
9. Speed of execution
Startups are much faster and more nimble than corporates in terms of market assessment, decision making and pivots. The slower pace of corporate decision-making may turn out to hamper the speed of execution of the startup.
Hence, the corporate team engaging with the startup must take steps in advance to smoothen the expectations on both sides. Otherwise, the “brake” on the startup may lead to a “break” of its journey.
10. Clarity of metrics
The corporates and startups must clearly define what the targets are for the period of the accelerator engagement. A few metrics, or even just one key metric, should suffice in terms of customer engagement or product refinement, for example, the number of customers to speak to, number of market segments to address. Different metrics can also be chosen for each phase of the engagement.
11. Encouraging creative tension
Startups and accelerators play an important role in generating “creative tension” at the top levels of corporate leadership. This can help the corporate better understand where the industry - and even society - are headed. But this also calls for courage and humility for corporate leaders to accept uncomfortable truths, absorb the lessons, and take responsive and progressive action.
12. Markets and demographic trends
Corporates need to better understand the rapid changes in aspirations and affinities of segments like youth. For example, not many graduates in earlier generations wanted to join the energy sector. Today, however, there is a marked increase in social and environmental commitments by youth. Tapping this drive can help corporates design more effective and meaningful engagements with startups.
In sum, a focus on broad global trends, local market realities, and the finer details of operating an accelerator can help corporates gain a valuable edge in the innovation race. A lack of focus on the above 12 factors does not just rob the corporate of precious insights, but can also derail the innovation agenda and harm startups in the process.