Many startups are dedicated to disrupting the businesses of established enterprises by leveraging innovative ideas, processes and strategies. Big businesses, in turn, either ignore pesky startups or consider them possible competitors to be squashed - or, best case, acquired - as quickly and efficiently as possible.
But with competition keener than ever, those insular views are changing. A few far-sighted big businesses are starting to reach out to startups to fund, partner, mentor, exchange ideas and share expertise in areas such as marketing and brand awareness — especially in the field of technology. And that offers new opportunities for savvy startups willing to be frenemies with giant enterprises. These three companies - Mondelēz International, Volkswagen and SAP - are helping lead the way.
“We feel strongly that startup entrepreneurs are some of the brightest and most innovative minds in the mobile space,” says Ed Kaczmarek, Director of Innovation and Emerging Technology at Mondelēz International (formerly Kraft Foods). “We want to leverage their solutions to re-imagine the way we engage consumers to bring greater value to our brands.”
Mondelēz International officially unveiled its Mobile Futures program in October to challenge the market to think differently about the ways companies can use mobile to engage with consumers. “It’s part of our broader goal of continuing to drive an internal culture with innovation and entrepreneurship at its core, which means working closely with startups, who we feel are the source of the freshest, most disruptive thinking in mobile right now,” says Kaczmarek.
Mobile Futures participants get direct access to brands such as OREO, Wheat Thins and Chips Ahoy to get in-depth, valuable consumer insights and marketing expertise, and will partner with the brands to accelerate pilots to market within 90 days.
In a similar vein, Volkswagen’s Plug and Play Acceleration Program is a three-month program designed to provide startups a structured way to access the resources of Silicon Valley.
Why is Volkswagen reaching out to startups? “This is a way for Volkswagen to find innovative technology and partners to create the next generation of VW Group vehicles,” explains Plug and Play Tech Center vice president of Strategic Partnerships, Candace Denton. “[We] are looking within, but also beyond the automotive sector to find interesting technology to bring within the automotive domain.” Volkswagen is working with startups in digital media, gaming and information-related technology.
Software giant SAP recently created a Startup Focus Program dedicated to helping startups with a mix of education, mentoring, go-to-market support and funding from a $155 million fund. Designed to highlight its SAP HANA database platform, the program reaches out to innovative young companies to accelerate their growth by leveraging the power of SAP HANA’s ability to harness massive amounts of data.
SAP is looking for startups in the big data/real-time analytics space. Interested companies can apply by completing the SAP Startup application form — there are no limits for how many startups will be accepted into the program.
How It Works
Mondelēz International is looking for ambitious and collaborative participants that are less than four years old, with working technology that can be immediately deployed into the U.S. marketplace. You also have to have either received outside funding of more than $1 million or participated or been accepted in an incubator program. Mondelēz is looking for businesses operating in one of three mobile consumer engagement/path-to-purchase categories: Mobile at Retail, Social TV or SoLoMo (social/local/mobile).
Once Mobile Futures applicants have been narrowed down to finalists (based on originality, proven technology and ability to solve an immediate brand marketing challenge), startups are invited to pitch the Mondelēz International brands. Then a short “speed-dating” interaction between startup candidates and brands takes place, and the final startups will be chosen and paired with a brand.
Volkswagen Plug and Play Tech Startups begin by participating in a three-day workshop that provides an overview of Silicon Valley and cover topics including Funding Process, Pitching Workshops, Startup Case Studies and Legal, Tax and Accounting Implications. For the next three months, participants gain structured access to the strategic resources of Plug and Play, including fund-raising opportunities through direct introductions to venture capitalists and other investors, business development opportunities through VW’s corporate and technology partners, and coaching and mentoring opportunities through VW’s network of advisors.
The fact that big businesses are looking to startups for innovation points to a future of collaboration and mutually beneficial alliances for American business. Says Mondelēz International’s Kaczmarek: “We chose to work with startups because we believe that they are the lifeblood of innovation. Startups comprise some of the brightest and most innovative minds, particularly in mobile, because in order to thrive in a hypercompetitive market, they have learned to take smart risks, move nimbly and with urgency, be collaborative in ways that larger companies often cannot match.”
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