Data Sheet—Tuesday, August 9, 2016
For years corporations have tried to show off how innovative they are by adopting superficial markings of startup culture—open office floor plans, pingpong tables, and cold-brew coffee on tap. It became trendy to launch corporate-run startup accelerator programs, which I used to mock as “innovation by osmosis.” There’s a whole new class of corporate venture arms from non-tech corporations ranging from the insurance industry to Campbell Soup. Fortune 500 companies have hired “startup scouts” and opened innovation hubs in Silicon Valley.
A lot of it is “corporate innovation theater,” a way for corporate sponsors to give themselves a halo of innovation and good PR, while soaking up a bunch of good ideas from startups and delivering little in the way of mentorship. Will MasterCard or Sprint or Lowe’s or Anheuser-Busch InBev really strike a meaningful partnership with a three-person, three-month-old company without a viable product?
But lately I’ve noticed a shift in these strange, sometimes awkward relationships. Corporations take startups—even very young ones—far more seriously. Look no further than these recent Fortune 500 acquisitions as proof: General Motors spent around $1 billion on Cruise Automotive, a 30-person autonomous vehicle startup that hasn’t even launched a product. Unilever spent $1 billion on Dollar Shave Club, a razor startup that adds just $200 million in revenue to Unilever’s €53.3 billion bottom line. And of course, yesterday Wal-Mart spent $3.3 billion on Jet.com.
A new study on the state of startup/corporate collaboration from MassChallenge and Imaginatik shows that not only are corporates more eager to work with startups, 23% see it as “mission critical, and 82% said it’s at least “somewhat important.”
Most importantly, 67% of those responded that they wanted to work with earlier stage startups.
>> Read the full article here.