On the 28 November 2018, the GSMA Ecosystem Accelerator team was invited to participate in a workshop on ‘Corp-Up: Start-up Collaboration As The Future of Innovation’ in Vienna, Austria. The event, hosted by Match-Maker Ventures (MMV) in collaboration with advisory firm Arthur D. Little (ADL), convened corporates (from the mobile industry and other sectors) and start-up representatives to discuss co-creation and win-win partnerships. While most of the discussion focused on developed markets, we had the opportunity to present our insights on ‘Corp-ups in Emerging Markets’.
‘Corp-up’ was defined as any form of commercial relationship between a corporation and start-up.
The workshop geared towards three practical steps for corporates looking to bring corp-up into fruition: 1) Get Internally Ready. 2) Identify Your Golden Nuggets. 3) Make It Happen. This blog highlights the big ideas and key takeaways from the workshop that are applicable to mobile operators in emerging markets.
1. Get Internally Ready
Match-Maker Ventures and Arthur D. Little called corporates to realistically assess their strategic needs and readiness for corp-ups. Corporates need to understand the internal and external rationales for these partnerships, the ‘why’. The “internal why” could be fuelled by the need for process improvement, talent recruitment or cultural refresh whilst the “external why” is usually driven by financial return, image enhancement, market/customer access, or new technology & products.
Corporates must then ensure definite processes, sharp tools and capable people are available to source (scout and screen start-ups), validate (understand how start-ups fit corporates’ needs), on-board (technical, operational, commercial, legal and administrative on-boarding) and manage the lifecycle (track progress, steer strategy, manage, sell and market products) of the corp-up. After assessing existing capabilities, they should then align start-up search-and-assessment grid and maintain momentum by setting up actionable KPIs.
Christian Lindener, CEO of Telefónica Germany’s start-up accelerator arm Wayra Germany, agreed with the above points in his keynote on ‘Is ‘corp-up” the best form of innovation?’. Lindener described Wayra Telefónica’s pivot from an investment to a collaborative model which “primarily serve entrepreneurs, but keeps the corporate in heart”. Telefónica stirred from an investment model to a corp-up model where start-ups in Wayra’s accelerator programme can earn the opportunity to win Telefónica as a client. Start-ups can also benefit from Telefonica’s brand, business development, mentorship, access to expertise and technology.
2. Identify Your Golden Nuggets
Upon being internally ready, corporates must build and run a professional and efficient evaluation process to screen and validate potential start-up partners. Internal teams that are receptive, open and ready for start-up collaboration should be identified and corporate should look to engage with clients/customers/end users when discussing and finalising innovation focus areas. This will ensure the needs of the end users are factored-in the start-up selection process.
Corporates should then identify relevant start-ups from various sources and validate, fast track/reject based on the corporate’s selection criteria. Corporates must involve business units throughout the selection process to ensure early alignment. During a side session on Identify Your Golden Nuggets, we echoed the above points based on our experience with the GSMA Ecosystem Accelerator Innovation Fund in scouting, sourcing and reviewing over 1,600 start-ups applications between 2016 and 2018 as well as in performing due diligence on over eighty emerging market start-ups short-listed in our three rounds of funding to date. We also seconded the points made on the need to define and identify search criteria and create processes to move efficiently from long-list sources of start-ups (social media, databases, VCs, accelerators, application inflows, etc.) to a well-curated short-list.
Emphasising similar points, Francois Dufour, Development Director at Orange Technocentre, detailed Orange’s evaluation process when sourcing and evaluating start-ups. He revealed that when sourcing start-ups Orange pays close attention to the product, market, competition, traction, acquisition, team, funding, reference calls and business models. Dufour stated that a question to keep in mind when assessing start-ups is: What can the start-up do more efficiently than the corporate?
Francois Dufour, Development Director at Orange Technocentre, giving a keynote speech on Orange EMEA’s engagement with start-ups.
3. Make It Happen
At this stage, it is fundamental to understand the engagement possibilities of the corp-up (level of integration needed, value proposition, operating model, go-to-market strategy). Collaboration models and routes must also be defined for success to occur. The procurement route (i.e., re-selling and internal solution) or strategic collaboration route (i.e., co-branding and joint product development) were highlighted in the workshop as two possible options. Finally, corporates were advised to ensure the risks, resources, expectations and timelines are managed prudently to ensure corp-up success.
Karim Taga, Managing Partner, Global Practice Leader TIME at Arthur D. Little and Dr. Nicolai Schaettgen, CEO of Match-Maker Ventures, answering questions on Corp-Up.
We want to end this blog post by thanking the teams of Match-Maker Ventures and Arthur D. Little for inviting us to speak about mobile operator-start-up collaboration in emerging markets. More insights and findings from the event can be found here on the Match-Maker Ventures’ website.
The Ecosystem Accelerator programme is supported by the UK Department for International Development (DFID), the Australian Government, the GSMA and its members.