Why Companies Engage with Startups (And Vice Versa)

My talk at the opening night of http://werkbank-heinsberg.de, standing in for the Minister of Economic Affairs, Andreas Pinkwart, who had to cancel last minute due to illness. Bookings: you@plusandersen.com

Transcript

1. HEINSBERG
 OCTOBER 5TH 2017 WHY & HOW
 COMPANIES ENGAGE WITH 
 STARTUPS AND VICE VERSA werkbank-heinsberg.de
2. MORE VIDARANDERSEN.COM VIDAR ANDERSEN • STARTUP FOUNDER • EDUCATOR • INNOVATION ADVISOR FOUNDING PRINCIPAL +ANDERSEN & ASSOCIATES
3. +ANDERSEN 
 & ASSOCIATES INNOVATION & GROWTH THROUGH SCIENCE + ENTREPRENEURSHIP MORE
 WWW.PLUSANDERSEN.COM
4. THERE IS A DEFINITION WHAT THE HECK IS A STARTUP ANYWAY?
5. CORPORATION PERMANENT FORM OF ORGANISATION DESIGNED TO EXECUTE A PROVEN REPEATABLE & SCALABLE BUSINESS MODEL IN A PREDICTABLE AND STABLE ENVIRONMENT
6. STARTUP A TEMPORARY FORM OF ORGANISATION IN SEARCH OF A SCALABLE & REPEATABLE BUSINESS MODEL OPERATING IN AN ENVIRONMENT OF 
 EXTREME UNCERTAINTY
7. AN ALTERNATE DEFINITION WHAT THE HECK IS DIGITALISATION ANYWAY?
8. DATA BECOMES THE PRODUCT DIGITALISATION IS INFORMATION ENABLING
9. XL IS NOT ENABLING 
 EXPONENTIAL GROWTH NOT 
 THIS
10. DATA ENABLING 
 EXPONENTIAL GROWTH THIS
11. DATA ENABLING 
 EXPONENTIAL GROWTH
 NEW MARKETS THIS
12. MANIPULATING DATA 
 EXPONENTIAL GROWTH THIS “The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of lawyers’ time annually. The software reviews documents in seconds, is less error-prone and never asks for vacation.” -JP Morgan
13. INFORMATION (DATA)
 ENABLES EXPONENTIAL GROWTH ENABLING EXPONENTIAL GROWTH
14. Information-enable products and capture 
 data digitally (preferably where
 nobody else is
 already doing it) Process and
 manipulate digital data, add value Save costs & time, find new business opportunities, scale, profit Build - Measure - Learn,
 rinse, lather, repeat IT NEVER STOPS
15. THE TIMES HAVE CHANGED WHY ALL THIS STARTUP HYPE NOW?
16. EXPONENTIAL
 TECHNOLOGY DEVELOPMENT
17. $40.000 (2007) $100 (2004) = 400X IN 7 YEARS 3D 
 PRINTING
18. $500.000 (2008) $22.000 (2013) = 23X IN 5 YEARS INDUSTRIAL 
 ROBOTS
19. $30 KWH (1984) $0.16 KWH (2014) = 200X IN 30 YEARS SOLAR 
 ENERGY
20. $100.000 (2007) $700 (2013) = 142X IN 6 YEARS DRONES
21. 80% DROP PRODUCTION COSTS EST. 2014-2022 NANOTECH GRAPHENE
22. $20.000 (2009) $79 (2014) = 250X IN 5 YEARS 3D SENSORS LIDAR
23. $10.000.000 (2007) $1.000 (2014) = 10.000 X IN 7 YEARS BIOTECH DNA SEQUENCING
24. SHORTER
 LIFESPAN FOR CORPORATIONS
25. YOUR COMPETITION
 NO LONGER PEERS OR NEAR-PEERS THE AMOUNT OF VENTURE CAPITAL AVAILABLE TO STARTUPS HAVE NEVER BEEN BIGGER
26. AUTOMATION
 AFFECTING MOST VERTICALS
27. MACHINES
 LEARNING BY THEMSELVES
28. VALUATIONS
 RAPIDLY INCREASING
29. CORPORATIONS
 SLOW & RIGID + COMPLIANT
30. STARTUPS
 FAST & AGILE + BREAKS THE LAW
31. LEAN METHOD HAS COME FULL CIRCLE 2013 2011 THE LEAN STARTUP 1940s AGILE & KANBAN 2005 LEAN INNOVATION MANAGEMENT 2017
32. OPTIMISING THE OLD
 ONLY TAKES YOU SO FAR INNOVATION IS THE KEY TO GROWTH
33. “The electric light did not come from the continuous improvement of candles” - OREN HARARI
 PROF, UNIVERSITY OF SF
34. OPTIMAL VEHICLE
 FOR INNOVATION & GROWTH STARTUP EQUALS
 GROWTH
35. “Software is eating the world.” MARC ANDREESSEN
 FOUNDER ANDREESSEN HOROWITZ 2011
36. Uber, the world’s largest taxi company, 
 owns no vehicles. Facebook, the world’s most popular media owner, 
 creates no content. Alibaba, the most valuable retailer, 
 has no inventory. Airbnb, the world’s largest accommodation provider, 
 owns no real estate. Spotify, the world’s most popular music service, owns no music rights. - TOM GOODWIN
 SVP HAVAS MEDIA
37. DIGITAL PLATFORMS ARE EATING THE WORLD
38. THE FACTS VS THE MYTHS SPEEDBOAT
 VS FREIGHTER
39. 10 FACTS CORPORATIONS DO GET IT 1 Traditional Venture Capital is no longer the only way to raise money for startups. DocuSign raised in the same round (Series E) exclusively from the following corporations: SalesForce, Google, Recruit, Mitsui & Co, BBVA, NTT DoCoMo, Telstra and MKI.
40. 10 FACTS CORPORATIONS DO GET IT 2 The majority (61.7%) of the unicorns mentioned by the Wall-Street Journal under The Billion Dollar Startups Club have raised from at least one corporate. 
 Not including investment firms and banks.
41. 10 FACTS CORPORATIONS DO GET IT 3 Corporations do not invest only in their 
 own vertical: 
 The online music streaming service Spotify 
 raised money from Coca-Cola.
42. 10 FACTS CORPORATIONS DO GET IT 4 In-house R&D is giving way to collaboration with new ventures. 
 9 out of the 10 biggest R&D spenders worldwide are already working with startups.
43. 10 FACTS CORPORATIONS DO GET IT 5 Not only silicon valley tech companies like Google, but some of the traditional corporate players have explicit ways to invest in startups on a large scale. 
 Ping An Insurance Group has a venture arm: 
 Ping An Ventures.
44. 10 FACTS CORPORATIONS DO GET IT 6 When it comes to collaboration with startups, France (not USA) has the highest percentage of its top corporations engaging startups: 
 23 out of 25 top corporations are working 
 with startups.
45. 10 FACTS CORPORATIONS DO GET IT 7 Investing in startups is not the only way to collaborate. 
 ProSieben Sat1 Media AG provides advertising time in return for revenues or equity shares through its venture arm (Seven Ventures).
46. 10 FACTS CORPORATIONS DO GET IT 8 Building accelerators, a popular way to help startups, is now done by “non-tech" corporations too. Diageo has an accelerator to create new 
 spirits brands: Distill Ventures.

47. 10 FACTS CORPORATIONS DO GET IT 9 Working alone with startups is not the only option: global corporations do it together as well. 
 The Ecomobility Ventures investment fund has been created by 5 corporations(Air Liquide, Michelin, Orange, SNCF and Total).
48. 10 FACTS CORPORATIONS DO GET IT 10 68% of the top 100 companies from the Forbes Global 500 are engaging with startups.
49. & STARTUPS
 WITH CORPORATIONS WHY DO CORPORATES ENGAGE WITH STARTUPS?
50. SHIFT 
 HAPPENS “SCREWED IF YOU DON’T” REALITY CHECK
51. REMEMBER THIS THING?
 NEITHER DOES THE WORLD
52. FAST SLOW VS
53. "In the new world, it is not
 the big fish which eats the small fish, it's the fast fish which eats the slow fish." - KLAUS SCHWAB
 WORLD ECONOMIC FORUM
54. VS
55. "If you don't create the things that will kill Facebook, 
 someone else will." - MARK ZUCKERBERG 
 FOUNDER OF FACEBOOK
56. ADVANTAGES
 FOR BOTH SIDES WIN-WIN OUTCOMES
57. CORPORATE ASSETS • CREDIBILITY • BRANDING & PR • DISTRIBUTION • SUPPLIERS • FUNDING
58. STARTUP ASSETS • SPEED OF INNOVATION • INNOVATIVE IMAGE • REAL INNOVATION • CULTURE TRANSFER
59. HUGE UPSIDE POTENTIAL FTW!
60. SHORT & LONG TERM
 VALUE DRIVERS TIMING RISK COST R&D Long Term High High Corporate Startup Engagement Medium Term Average Low M&A Short Term Low High
61. 5 EXAMPLES
 FROM THE REAL WORLD HOW CORPORATES ENGAGE WITH STARTUPS
62. 5 EXAMPLES HOW CORPORATIONS ENGAGE 1 Sprint, R/GA, Kaplan, Microsoft, Disney, Barclays, Qualcomm and METRO all have 
 an accelerator powered by techstars.
63. 5 EXAMPLES HOW CORPORATIONS ENGAGE 2 Johnson & Johnson has a co working space with research facility: Jlabs. JLABS
64. 5 EXAMPLES HOW CORPORATIONS ENGAGE 3 Monsanto and Syngenta have a venture arm: Monsanto Growth Ventures 
 & Syngenta Ventures.
65. 5 EXAMPLES HOW CORPORATIONS ENGAGE 4 Procter & Gamble has a fellowship program with the accelerator The Brandery in Cincinnati, sponsoring startups.
66. 5 EXAMPLES HOW CORPORATIONS ENGAGE 5 Even the CIA has a venture capital arm: 
 In-Q-Tel, an early investor in Facebook.
67. MORE THAN ONE WAY TO DO IT BUT HOW DO YOU START ENGAGING?
68. HEURISTIC LOW TO HIGH 
 INVOLVEMENT 8. Mergers & Acquisition 7. Investment 6. Spin-Off 5. Accelerator / Incubator 4. Co-Working Space 3. Events 2. Startup Program 1. Support Services HIGH ENGAGEMENT LOW ENGAGEMENT
69. HEURISTIC LOW TO HIGH 
 COSTS 8. Mergers & Acquisition 7. Investment 6. Accelerator / Incubator 5. Co-Working Space 4. Spin-Off 3. Events 2. Startup Program 1. Support Services HIGH COSTS LOW COSTS
70. HEURISTIC LOW TO HIGH 
 RISK SEEKING 8. Investment 7. Mergers & Acquisition 6. Accelerator / Incubator 5. Spin-Off 4. Co-Working Space 3. Startup Program 2. Support Services 1. Events HIGH RISK SEEKING LOW RISK SEEKING
71. HEURISTIC SHORT TO LONG 
 STRATEGY 8. Events 7. Support Services 6. Startup Program 5. Co-Working Space 4. Accelerator / Incubator 3. Spin-Off 2. Investment 1. Mergers & Acquisition LONG TERM SHORT TERM
72. WHO DOES WHAT 
 262 OUT OF F500 CORPORATIONS
73. CORPORATE ENGAGEMENT 
 BY CHANNELS & RANK
74. TOP INDUSTRIES 
 WHO ENGAGE WITH STARTUPS 94.1% Pharmaceuticals 85.2% Telcos 68.8% Regional Banks 64.5% Major Banks 58.8% Diversified 
 Insurance
75. TOP INDUSTRIES 
 WHO ENGAGE WITH STARTUPS 100% (7 of 7) Semiconductors 100% (7 of 7) Computer Services 87.5% (7 of 8) Beverages
76. TOP COUNTRIES 
 WHO ENGAGE WITH STARTUPS 94.1% France 71.4% Germany 71.4% Switzerland 56.8% Japan 53.3% United Kingdom Orange EADS Credit Agricole Renault BNP Paribas VW Group SAP Allianz Siemens DTAG Nestle UBS ABB Syngenta Swisscom Nippon Tel Softbank Nissan Motor KDDI Seven & I Hld. Vodafone Standard Ch. SABMiller Diageno WPP
77. OTHER COUNTRIES 
 OF NOTE FOR COMPARISON 45.5% U.S.A 23.8% China Johnson & Johnson P & G Google Boeing Dow Chemical Ping An Insurance Group SAIC Motor Alibaba Tencent Holdings Lenovo Group
78. THIS IS NOT A FAD EVERYBODY IS DOING IT
79. HOW TO START ENGAGING NEXT STEPS
80. ENGAGEMENT
 EVOLVING IN PHASES STEP TOOLS 1. Learn Research, Events 2. Partner Support Services, Startup Programs, Co- Working Spaces, Spin-Offs, Accelerators & Incubators 3. Own Investments, Mergers & Acquisition
81. DIFFERENT OBJECTIVES
 DIFFERENT ENGAGEMENT TOOLS Innovation Culture New Markets Platform Solving Problems Events Support Services Startup Programs Co-Working Space Accelerators & Incubators Spin-offs Investments M&A CORPORATE OBJECTIVES STARTUP ENGAGEMENT TOOLS MOST TO LEAST RECOMMENDED
82. BUY PRODUCT + USERS BUY IP BUY TEAMS BUY PRODUCT LINE BUY REVENUE STARTUP PHASE: SEARCH VS EXECUTION ACQUISITION INTENTION SEARCHING EXECUTING WHEN TO BUY WHAT
83. BUY PRODUCT + USERS BUY IP BUY TEAMS BUY PRODUCT LINE BUY REVENUE ACQUIRER STRATEGY INTEGRATE INTEGRATE INDEPENDENT WHEN TO INTEGRATE 
 OR KEEP SEPARATE ACQUISITION INTENTION
84. 1 Talk to a pool of startups about their needs as part of your design process. It's easy to assume 'they would love this' when the bar for competitive offerings is getting higher. START TODAY 
 ENGAGE WITH STARTUPS
85. 2 There are many different ways to engage with startups. The key is to keep in mind your objectives, resources and time frame for expected results at all times. START TODAY 
 ENGAGE WITH STARTUPS
86. 3 You can start small, choosing one channel of engagement at a time and iterate fast based on the results and buy-in. 
 However if you don't shoot for big enough wins from the start, there may not be enough to show to get you more resources later. START TODAY 
 ENGAGE WITH STARTUPS
87. 4 Select the right partners to share the knowledge and minimise risks. Doing it alone can be scary. Feel free to talk to us at +ANDERSEN & ASSOCIATES and the digiHUB Aachen if you need some help along the way. START TODAY 
 ENGAGE WITH STARTUPS
88. 5 Whatever you choose to do, be prepared to work at the speed of startups Don't keep them waiting on you. You don't want the engagement to backfire. START TODAY 
 ENGAGE WITH STARTUPS
89. DO OR DO NOT THERE IS NO TRY
90. CONTACT
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 & ASSOCIATES INNOVATION & GROWTH THROUGH SCIENCE + ENTREPRENEURSHIP
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