Key takeaways from Axis Webinar 5: Internal vs. External Innovation
Despite coming back into our Axis office last week, Axis Webinars are continuing full speed ahead! Our 5th webinar brought together three excellent speakers to discuss internal vs. external innovation, and how startups fit into the bigger picture of corporate development. Our esteemed panelists and innovation experts included Lior Yekoutieli — Head of Open Innovation Group at Samsung Research (Israel), Andrey Nikonov — Corporate Startup Engagement Lead at Kaspersky Innovation Hub (Russia), and Bruce Dines — Partner and Innovation Leader at Liberty Global Ventures (USA). For startups, innovators and anyone in the space, the insights brought were critical to really understanding how corporations see innovation on a strategic level, where the mandate and focus areas of innovation come from, and how startups can best position themself for success with a corporation. Watch the recording here!
Here are 5 key takeaways from this informative session:
The ‘headline’ question — internal vs. external: When it comes to finding the optimal way to innovate within your company, some kind of internal and external mix is best, and this may be different depending on whether it is problem-based or opportunistic. All three speakers spoke about their innovation processes, mentioning that a lot can be done internally but that external partnerships often bring about better results. In terms of working with startups — Andrey noted that, in his experience, such collaborations are generally most successful when an internal product has already been developed and the startup finds a way to enhance it. Lior said that if an external idea is to be used, it needs to have a clear use case which is relevant to the company — especially in Samsung’s case, as their investments tend to be strategic. Whether the innovation is happening internally or externally, each case will have its own risks and will need to be carefully evaluated at each step.
The current situation might slow down innovation processes, but doesn’t have to: The speakers shared their different experiences of the Covid-19 period, and all have been lucky to be in a position to get significant work done, despite the circumstances. Bruce discussed the fact that Liberty Global — being a media company — has actually benefited from the situation because of an increase in use and traffic, although there has been a slowdown on the VC side. However, there isn’t much of a change to their innovation platform at these times. Lior pointed to both innovation processes and innovation opportunities, saying that the process of evaluating startups and innovations now is slower and more difficult, but that these times have created new opportunities and greater openness towards solutions such as telehealth. Andrey felt that working from home has gone well, but that scouting has been slow as a result of general inactivity in the global ecosystem. Therefore, it comes down to whether opportunities are being jumped at, or the situation is getting the better of the corporation or startup.
When to approach a corporation? There were mixed responses to this — Bruce said that it’s best to wait until you are a developed company with $5M+ revenue monthly, as large corporations will be very demanding. He cautioned that many startups have died from spending too much time early on one corporation which didn’t turn out successfully. Lior, however, was more open to early stage companies. He noted that it is appreciated when startups are honest and realistic, though, rather than over-selling their business. Andrey emphasized Kaspersky’s many open startup challenges and processes to make partnerships smoother for both sides. He said that startups working with different corporations is vital, in order to find the best use of their resources. They should explore all channels in order to penetrate an organisation.
Managing Expectations: At the end of the webinar, our final poll to startup listeners asked “what do you expect from working with a corporation?” 71% of responses said that integration was the main expectation that they had. Bruce brought up an important point here about the expectation gap between startups and corporations. Despite the hope of working closely with corporations, Bruce and Lior confirmed that less than 5% of startups they discuss working with actually turn into any type of collaboration. This point is critical for startups to understand the process with corporations and the likelihood of success.
Making open innovation more open: Another question from a participant asked “why isn’t open innovation more ‘open’ so startups know what corporations are looking for?” This is important since the goal of open innovation is to expand reach, and cannot be achieved if there are too many barriers to success. Lior provided valuable context as to why corporations don’t always share their projects openly, mainly because of confidentiality and competition in the market, which means that this must be dealt with on a case by case basis. Andrey added that in Kaspersky’s case, they are continuously looking at startup applications through their open challenges and are also starting to have demo days — showing that they are constantly finding ways for their innovation process to be open. Bruce felt that if startups focus on their value proposition and bring something big to the table, they can then get results — regardless of how open a company normally is to outside innovations.
In conclusion, we heard a variety of key insights into the real workings of innovation inside big corporations. This is an ideal time for all kinds of businesses to carefully analyse their strategies and consider the best ways to move forward, and innovation is a vital tool for businesses to get out of this period strongly. The image below summarizes the key tools corporations can use to innovate both internally and externally.
Whatever your role in the ecosystem is, the key takeaway is to keep innovating!
Axis Webinars continue soon!
