This week, the UK entrepreneur community came together at its first event on the rise of the corporate accelerator. Over 200 people attended, with representation from around 10 corporate accelerators and 70 corporations, including Amazon, Dell, Unilever and Virgin.
The key take away from the event was that the symbiotic relationship between corporates and start-ups is critical if the UK and Europe as an ecosystem is to compete globally. It is not necessarily something that the European Union, public sector bodies and individual governments should be doing unilaterally – it’s more down to the corporates and start-ups who need to take this on as an extra challenge and start addressing public sector problems themselves.
Danny Bartlett, head of communications for Wayra UK said after the event, “We believe corporate acceleration is a normal evolution within the ecosystem. Start-ups have always been trying to get closer to large enterprises and corporates want to keep their ear to the ground when it comes to innovation. How they move forward together in achieving goals which are mutually beneficial will be the hardest part to master.”
According to Forbes magazine, 69 companies have launched ‘corporate accelerators’ around the world since 2010, with the main motivator being the threat of disruption from start-ups. It’s always been the belief that small, agile start-ups are more nimble and therefore more capable of innovating than large corporates, who have processes and sometimes internal bureaucracy that often hinders any new project or idea getting off the ground.
The US is said to dominate this space, accounting for half of all corporate accelerators, with Europe and Asia rank 2nd and 3rd. Orange Fab, Microsoft Ventures, Hub:raum and Wayra are just few examples of a wider trend that has been shaping the industry in the last few years. Entrepreneurs and venture capital firms have come to recognize that corporate accelerators are now beginning to provide a strong node in the overall start-up ecosystem. Corporations encourage entrepreneurship and innovation through the community of the accelerator, and filter the most viable and promising new ideas.
Speaking in a blog article prior to the UK event, Gary Stewart, director at Wayra UK, itself an accelerator of Telefonica, said that it’s becoming increasing clear that corporate acceleration is contributing significantly to what the UK needs to remain globally competitive. 12% of all accelerators in the UK are now owned by large corporate enterprises and an increasing number moving into this space.
The benefit so far to Telefonica and the start-up community is clear. Wayra start-ups in the UK have generated over $61M in investment and developed products and services that have enriched the customer experience provided by Telefónica. One example is RotaGeek, an online scheduling platform that enables store managers to efficiently create and amend their staff rotas, helping O2 (the mobile phone brand of Telefonica in the UK) reinvest £2.5M in customer experience. Qudini has dramatically increased good sentiment with Telefonica’s customers across 260 stores, through its intelligent queueing system. Qudini made such an impact that earlier this year, they became the preferred global supplier of queue management for the whole of the Telefónica Group globally.
The benefits for start-ups are also immeasurable. The mutual benefits for all parties has led Telefónica to establish Open Future_, a global innovation and entrepreneurial network, open to partners. Open Future_ manages seven initiatives across 17 countries, with activities focused on three main objectives: to encourage ecosystems; accelerate new businesses and invest in mature opportunities.
To date, Open Future_ has invested over €500M in 600 businesses – 500 of which have been supported through Wayra. It has signed innovative partnerships with over 60 private and public organisations, including acceleration partnerships with Cambridge Wireless and the Isis Software Incubator part of Oxford University, as well as the UK’s first preventative healthcare accelerator, Velocity Health, which is powered – in part – by global health company MSD. Telefónica has also committed $200M to launch the Communications Investment Platform (CIP) in a limited partnership with Coral Group, as well as forming a partnership with Deutsche Telekom, Orange and Singtel to bridge start-up ecosystems across Southeast Asia, Africa, Europe, Latin America and the Middle East.
Corporate accelerators clearly fulfil a clear purpose both for the corporate as well as the entrepreneur ecosystem. I remember from my days in industry in the 1980s how companies I worked for would invest a proportion of their budget in research and development. The chief technology officer’s role would often be a role in which he or she would do some ‘blue-sky’ thinking and would look at emerging technologies and lead research into some of their applications, relevant for the company. Now with many corporates having cut their ‘blue-sky’ R&D budgets, it seems that the corporate accelerators are taking their place.