Fostering Startup Innovation When Your Company Isn’t a Startup
by Susana Quintana-Plaza, Partner, next47
At next47, we do not only invest in external start ups, we also help Siemens identify and nurture the best entrepreneur teams from within, and help them carve out their ideas into successful startups. That’s why we recently partnered with Techstars, one of the world’s most successful accelerators, to help bring two new companies to life.
EcoG, which aspires to be the Operating System for EV Charging, aims to integrate and monetize charging stations through value-add services.
RealSynth facilitates AI development for railways and other industries by creating annotated synthetic worlds.
As I write this, the teams are almost through the 90 day program and I am so excited to watch these teams follow their passion. We have learned a lot about what it takes to foster entrepreneurship out of a large organization. Here are a few observations:
1. Select the best teams and give them the tools to be successful
We chose Techstars because they are experts at selecting the best early stage teams and give them access to expert advice, customer feedback and investors that will make the difference when competing with the best. The Siemens teams have to go through the same application process as other start-ups competing to get into the program. The ones that make the cut will go through extensive interviews to understand their drive, motivation and willingness to adapt and evolve in order to make their company successful.
By partnering with Techstars we are giving the Siemens teams the opportunity to participate in a 3 month bootcamp where they are paired with mentors that have grown their own startups and understand what takes to win. They will learn from customers who will provide invaluable feedback about the idea/product. Last but not least, they will learn how to successfully pitch their company to top-notch investors that will provide capital for the years to come.
During these 3 months, EcoG and RealSynth will test, refine, test again, get knocked down again, and keep pushing ahead for 90 days until they’ve developed something that may one day be able to revolutionize the market. That’s a 10-fold outcome, a breakthrough that can add serious value not only to Siemens but also to the world.
2. Cut the Umbilical Cord
It is also important to let go. The Techstars program works because the Siemens teams joined at their own risk: they gave up the comfort of their steady job and income to start their businesses. They’re all-in, as any other startup entrepreneur would be. This shows the true commitment to their idea. Because believing in your idea and true commitment to making it happen is key to future success.
Additionally, by being outside Siemens they will have access to other external customers and mentors. Every piece of data and every additional customer could be the difference between success and failure.
But even more importantly they will get the global market feedback on the validity of their idea. We’ll know EcoG and RealSynth are winning when new investors decide to commit money to their ideas. The push they’re getting at Techstars increases their odds of success much more than if they’d done the work as a “side gig” while working for Siemens. Letting go puts corporate entrepreneurs at their spirited best.
3. Limit capital to increase focus
Constraints also lead to creativity. By unleashing EcoG and RealSynth into the Techstars ecosystem we’ve guaranteed they’ll need to not only spend carefully — but more importantly they will have to strongly prioritize what is important and focus on what will make them win. Over-investment may lead to running too many side projects that do not add value to the core and distract from the main task. It also may result in “technology for technology’s sake” instead of focusing on the customers and business refinement based on market feedback to bring a successful product to market.
We’re watching EcoG and RealSynth closely and documenting their journeys because we’ll learn a lot about what it takes for them to win. I hope you’ll enjoy watching along with us.