What defines a corporate startup
The potential for corporate startups in Portugal — Part 1
A 3-part series about the definition of a corporate startup, why Lisbon is the place to build it, and how to be the employer of choice in a competitive tech ecosystem.
Over the past years, Lisbon became one of the most attractive places in Europe for startups and tech-savvy young professionals. Many articles and studies highlight the city’s potential and showcase the growing number of startups and accelerator programs [1], [2]. But why is Lisbon also the perfect place for corporate startups? Let’s explore this topic from the point of view of such a corporate startup based in Lisbon.
What is a corporate startup?
Every time using this term, we question if our audience has the same understanding of it as us. So, let’s get this clear. What is a corporate startup?
A corporate startup is a new company founded by a corporate to serve a specific purpose for that corporation. It has a clear product focus, a definable value-add, with a financial back up for the first years, and often lives within the new software engineering world. It does not directly target the external market, because the mother-company is its direct client, so some structures like Sales or Customer Support are not needed. Generally, corporate startups are founded in one of two ways: either they grow as an initiative out of the corporate and will then be created to fulfill a specific task or goal; or they are an acquisition of an external startup which will then be integrated into the corporate structure. We, as tb.lx, are part of the first group: we were founded with the aspiration to enable a global connectivity approach within the Daimler Trucks & Buses universe, and act as a bridge builder with the external tech community.
As big corporations go through digital transformations, they need to invest in new technology, new knowledge and new concepts of working, to ensure their core business’ success in the future. However, their established processes and rigid structures often pose some challenges. This is where corporate startups come into place, as they are often described as the speedboat of the big tanker that can boost innovations and product development through outside-of-the-box-thinking, speed and agility, and the detachment from the corporate environment.
But while corporate startups enjoy the perks of having access to corporate resources like knowledge, infrastructure, security and capital, it is also challenging to keep them away from bureaucracy and over-complicated processes that often contradict the startup mindset.
Compared to corporate innovation hubs, which is another kind of external corporate entity, the focus is not on creating innovative ideas externally and pass them over to the corporate, but to build real products which combine external market knowledge and internal product knowledge¹.
In the end the question is, do you want to buy technology and knowledge externally, or do you want to build it up yourself within a new entity?
2 years as a corporate startup — a journey and learnings
We did it! At tb.lx, we just celebrated our 2nd anniversary as a corporate startup. During the last 2 years, we raised our headcount from 0 to 35, had a change in management, went from a very Portuguese team to a very international one with currently 11 nationalities, rebranded ourselves, went to events, and connected with the tech community in Lisbon. We got acceptance in the corporate and took over internal product responsibility. We went from remote-friendly to remote-forced to remote-first, and built a culture that persisted, even during tough times.
Our CEO Christian Lessing said in a recent interview: “The biggest achievement is that tb.lx established itself to the company it is right now, with its culture, its people, and its products. We’ve had a diverse portfolio and jobs to be done, but we always kept thriving on the different projects. (…) We are a corporate startup, and on the one hand, we have a lot of freedom, but on the other hand, we have a big partner looking at us. (…) And to balance this out while still keeping our startup mentality is probably the biggest challenge.”
We want to say Thanks Lisbon and Thanks Daimler for supporting us on this journey!
If you decide to build up your corporate startup, continue reading here, why Lisbon is the place to build it.
Notes:
¹ Some corporate startups are called innovation hubs although they have a product-focus rather than an idea-focus. Above is our definition of a corporate startup vs. a corporate innovation hub, others might have different definitions.
References:
[1] http://startupmonitor.eu/EU-Startup-Monitor-2018-Report-WEB.pdf
