Developing a corporate innovation strategy is no easy feat. Akin to cooking a good dish, aside from ensuring that you put in place the best ingredients and chef, adopting the appropriate cooking methods and processes is critical to delivering that dish that you so desire.
Likewise, aside from taking into consideration factors such as innovation culture, resources, and the executing team, adopting an appropriate innovation approach is key to determining the outcome of your corporate innovation efforts.
With that, this article seeks to highlight an innovation approach that has been gaining traction that could serve to enhance your dish, boost your corporate innovation strategy — the pre-accelerator.
Most corporates that have been early in the game are familiar with innovation approaches such as hackathons, accelerators, startup scouting, innovation challenges, and even venture building. But what are pre-accelerators?
Pre-accelerators have only been rising in prominence in the past couple of years, and mainly in US & Europe. Such programmes have been gaining momentum across startup communities, with the increased awareness of the effort and resources required to enable ideas to take flight. Given so, pre-accelerator programmes focus on equipping entrepreneurs with skill sets and resources to develop their first minimum viable product and establish a strong product-market fit. The foundation required for any good business venture.
Pre-accelerator programmes can be structured from anywhere between 8 weeks and 12 weeks, focused on equipping participants in the areas of customer and market validation, prototype and business model development, fundraising, and development of branding and marketing strategies. Given that resources are highly limited for entrepreneurs at such a phase of development, the ability to gain access to a consolidated platform of high quality mentorship, resources, and tools is critical to spurring the rise of new innovative solutions.
Evidently, the sell for such programmes to entrepreneurs is strong, but why has such an innovation approach also increasingly appealed to corporates?
The answer to this is simple — corporates that are keen to collaborate with startups face the same problem as startup ecosystem players that have been early adopters of this approach, the need to enable ideas to take flight.
This applies regardless of whether you are looking at it from a return of investment perspective in the long-term for your corporate innovation initiatives, or just by the very fact that you need these ideas to mature in order for pilots to be plausible. It applies whether you are looking at an internal or an external innovation programme, in which both would face the challenge of providing the necessary support to further develop ideas generated by staff or entrepreneurs.
Given so, corporates have been increasingly drawn to adopting such an innovation approach to enhance and complement their existing corporate innovation initiatives.
It is undeniable that hackathons are a good way for corporates to crowdsource new ideas and solutions from the broader ecosystem, in which this is especially so if the industry is nascent and mature solutions are far and few. Fostering the rise of new ideas is as such a key innovation strategy in the long-term, to enable corporates to have viable solution providers to work with in the years to come.
While recognising the merits of hackathons, corporates that have engaged in them often struggle with the long term feasibility of such an innovation programme given the low success rates of ideas that have emerged. This comes with the realisation of the need for post-hackathon support to enable entrepreneurs to further develop their ideas, validate it in the market, before the idea is able to take flight in the form of engaging in pilots or raise further funding support.
Given so, to enhance the return on investment poured into hackathons, pre-accelerators have been increasingly paired with hackathon programmes. This serves to provide structured support for ideas generated from hackathons, enabling ideas to be further developed to produce pilot-ready solutions.
Pre-accelerator programmes are unique in that they work with ideas and solutions that are still in very early stages of development (pre-MVP). As the products and solutions are still in early stages of development, this presents more opportunities for corporates that are looking to collaborate with startups to jointly shape and develop them. This serves as an ideal pipeline for corporates that are looking to explore new solutions to bring in as new business units and/or to source for new solutions to engage in further development jointly with their venture building teams.
The ability to jointly shape and develop these solutions through the pre-accelerator programme, also serves to align solutions more closely to internal processes and constraints increasing the likelihood for the solutions to be adopted. Such a pairing capitalises on the merits of open innovation approaches in the ability to source ideas from the broader ecosystem, to strengthen venture building efforts.
Given that corporate venture arms often focus on solutions that enhance existing business lines, the investment focus of each corporate is a unique one. While startup scouting is often relied upon to bring in investment leads, corporate venture arms find themselves competing with other corporate venture arms and venture capital firms for these deal flows. These solutions also often do not meet internal requirements, to which corporate ventures find themselves in tricky situations having to exit investments when business units are not able to work with their portfolio company.
Investing in a pre-accelerator programme to build up a curated pipeline of early-stage ventures has as such been a model that is increasingly attractive to corporate venture arms. Through customising the scope, scale, and theme for these pre-accelerator programmes, corporate ventures are able to foster the development of ideas that are more closely aligned to their business needs. Through engaging the startups through the pre-accelerator programme, corporates would also have the opportunity to work with the startup for a certain period of time prior to investment. This increases the likelihood of these solutions being adopted internally, and enables investments to be made with more certainty on the potential of the startup.
It is of hope that the above has helped to uncover the beauty of pre-accelerators and how they can serve to boost your corporate innovation model. For those engaged in hackathons, pre-accelerators could be that structured post-hackathon support you have been looking for. For those engaged in venture building, a pre-accelerator programme could provide that steady pipeline of solutions in a sweet spot of development to collaborate with. For those involved in corporate ventures, pre-accelerators could be that curated deal flow pipeline that you have been looking for.
So if you are a corporate developing your innovation model and/or reviewing your existing innovation strategy, why not consider the pre-accelerator and see how it can complete the dish for you?
Nobody forgets the helping hand that gave them their start. For these startups that are solving problems for social good, two of our employees are paying it forward as their mentors at The Start, a new pre-accelerator programme.
The programme will run from January to March 2019 and will culminate with a Demo Day at the end of March 2019.
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