Innovation is undergoing a seismic shift. No longer confined to the walls of research and development departments in large corporations, startups are now at the forefront of groundbreaking advancements, especially in the realms of technology and digitalization. These nimble entities are leading the charge in digital transformation and redefining business models, making them a force that established corporations cannot afford to ignore. To illustrate the potential and challenges of such collaborations, we've chosen to spotlight Telefónica, one of the world's most experienced corporates in open innovation. Their journey provides invaluable insights into the dynamics of corporate-startup partnerships.
Telefónica: A Case Study in Corporate-Startup Collaboration
Telefónica stands as a testament to the power of corporate-startup collaboration. Over the years, the company has launched numerous Open Innovation initiatives, with 2020 marking the introduction of two groundbreaking programs: Wayra Builder and Open Innovation Campus. These initiatives encapsulate Telefónica's commitment to fostering innovation internally and through collaborations with the academic world.
Wayra Builder: Breeding Ground for Startups
Telefónica's journey into the realm of innovation investment began in 2006 with the launch of Telefónica Ventures. This commitment to innovation was further solidified in 2011 with the introduction of Wayra, and in 2020, the company expanded its portfolio with Wayra Builder and Wayra X.
Wayra Builder is a unique venture builder designed to amplify the value of Telefónica’s startup portfolio. It focuses on creating new companies based on innovative ideas with significant market potential.
The modus operandi of Wayra Builder is to invest up to 350k€ in startups originating from business ideas in four key markets: Spain, UK, Germany, and Brazil. In return, Telefónica acquires a maximum of 20% equity, ensuring the startups' future investment rounds remain uncompromised. The business ideas targeted are purely digital, spanning sectors like IoT, Video, Cloud, AI, Cybersecurity, Big Data, Gaming, and Metaverse.
Since its inception, Wayra Builder has successfully created four startups, with three actively operating. These include Deeder, a digital contract-signing platform; Shaadow, a cybersecurity solution for business document protection; and Wiper, an AI-driven educational platform for gamers.
Open Innovation Campus: Bridging the Gap with Academia
Launched in March 2020, the Open Innovation Campus (OICampus) aims to be a bidirectional conduit between academia and Telefónica. It designs and scales collaboration models, combining the strengths of both entities to address key challenges and opportunities.
The collaboration always begins with a company-identified need, ensuring the results are impactful and relevant. This need-driven approach has led to successful collaborations, such as the Immersive Technologies LabStudio with Universidad Carlos III de Madrid and the Tinkering Lab Living Games with U-tad University.
Furthermore, OICampus has been instrumental in promoting female STEM talent. Through initiatives like #GirlsLoveTech, young women are encouraged to pursue careers in scientific and technological fields.
Challenges in Corporate-Startup Collaborations
While the potential benefits of such collaborations are vast, challenges abound:
Time Constraints: Few corporations allocate time for employees to explore external innovations. For instance, Telefónica, through its Wayra Builder initiative, actively invests time and resources in scouting and nurturing innovative ideas internally and externally.
Lack of Incentives: Employees may shy away from risky, outside-the-box endeavors without proper motivation.
Resource Limitations: Innovative projects often require resources that aren't readily available.
Territoriality: Navigating power dynamics and traditional boundaries can be tricky.
Skill Gaps: Not all employees are equipped to think innovatively. Telefónica's initiatives, especially its collaboration with the entrepreneurial ecosystem and academia, help bridge this gap by bringing fresh perspectives and expertise.
Credibility Issues: Trust is essential for successful collaboration. Telefónica's longstanding commitment to innovation and its successful collaborations is a testament to its credibility in the startup ecosystem.
Keys to Successful Collaboration
Drawing from case studies of corporations like Telefónica, Unilever, Microsoft, and Vodafone, several best practices emerge:
Define Clear Objectives: Understand why you're engaging with startups. It should align with real business needs. Telefónica's clear objectives with Wayra Builder and Open Innovation Campus are prime examples.
Choose the Right Program: Different collaborations serve different purposes. Find the one that aligns with your objectives. Telefónica's diverse range of initiatives showcases the importance of this.
Secure Top-Level Support: Board-level sponsorship can differentiate between success and failure.
Use Data-Driven Metrics: Establish KPIs to measure progress and ensure alignment with business goals.
Adopt an Entrepreneurial Mindset: Understand startups and treat them as partners. Telefónica's approach to treating startups as partners rather than mere investments is a testament to this mindset.
Appoint an Internal Champion: This person should have decision-making and budgetary authority.
In the current era of rapid technological advancement, collaboration between startups and corporations isn't just beneficial—it's essential. By understanding each other's strengths and challenges, these entities can co-create solutions that drive progress and redefine industries. As evidenced by Telefónica's endeavors, the future of innovation lies in these partnerships, providing a roadmap for others to emulate and build upon.