HARNESSING THE START UP SPIRIT
Corporate accelerators are touted as a way for large companies to embrace innovation and mitigate rapid change. Thepeak speaks to managers of accelerators in Hong Kong to find out what works, what doesn’t, and how to get the most out of start-up land.
Corporate accelerators is a way for large companies to embrace innovation and mitigate rapid change– we speak to managers of accelerators in Hong Kong to find out what works, what doesn’t, and how to get the most out of start-up land
Infiniti Motors jumped into the world of start-ups in 2015. “Car companies are slow,” says Infiniti’s General Manager Dane Fisher as he explains why the Japanese luxury auto manufacturer decided to enter the start-up space at a relatively glacial pace.
“Although we try and be as agile as we can, it takes five to six years to build and develop a car. Start-ups live in the now, they work in very rapid environments; they go quick, fail fast.”
We’re sitting in the Wan Chai space specifically designed for hosting the company’s Infiniti Lab – a 12-week accelerator programme dedicated to smart cities and internet of things (IOT) innovation. Although Fisher says he isn’t allowed to share how much Infiniti is investing in dollar terms, the company is rolling out new accelerator programs in around 12 different markets within the next year: Taiwan, Beijing, Shanghai, Singapore, Kuala Lumpur, Toronto and Dubai are all on the list.
For Infiniti, the metrics are straightforward. If they are able to help entrepreneurs, bring cultural change to the company and reinforce the message of the brand – that’s the base measure of success.
“[The accelerator] speaks to the customers that we’re ultimately selling to, the people we call progressive challengers,” says Fisher. “They’re really entrepreneurial in nature, they’re premium consumers and they love technology, but they buy technology to enable them to achieve more in life.”
In this way, Infiniti feel they’ve already succeeded. They have supported start-ups such as Green City Solutions, which developed the Citytree – an air-filtering panel of moss that cleans the air by filtering out harmful pollutants at the same rate as 275 trees. They also worked with Precision Services Limited, which has created a foldable Bluetooth-connected electric bicycle.
As for cultural change, Infiniti is looking to adopt some of the efficiency and speed of working that the start-ups have set an example for. For one, it’s looking to adopt a policy that would force internal presentations to become more concise, by limiting the number of Powerpoint slides to five.
“Start-ups have to ask investors for millions in five minutes – why do we as a corporate have to use 40-50 Powerpoint slides when we’re trying to get decisions across?” Fisher asks. “We’re trying to simplify that and use start-up thinking even in our high level decision-making process.”
The company has also set up an internal innovation programme for staff to generate ideas, and has promised to implement three of the winning solutions.
But where Infiniti is really looking to see an impact is by getting a glimpse into the future of the car industry. Fisher imagines we will soon live in a world where most people don’t drive, but will own a car that can be programmed to take them to work and their kids to school, freeing up that time for other activities. “It will change people’s lives irreversibly,” he said.
AHEAD OF THE CURVE
While there are infrastructure and regulatory challenges to overcome, many big companies are keen to stay ahead by working closely with start-ups.
“[Companies] don’t want to miss out and be unaware of a technology that is eating
“[COMPANIES] DON’T WANT TO MISS OUT AND BE UNAWARE OF A TECHNOLOGY THAT IS EATING AWAY THEIR MARKET SHARE. TO THE UNINITIATED, BY THE TIME IT’S ON THEIR RADAR, IT’S TOO BIG”
– Lawrence Morgan, Nest
away their market share,” says Lawrence Morgan, chief executive officer at Nest, an investment incubator that helps Infiniti and other corporations implement accelerator programmes. “To the uninitiated, by the time it’s on their radar, it’s too big.”
Morgan explains that accelerator programmes are akin to a market scanner. “[They allow you to know] early on who is gaining success in your industry – be that small start-ups or be that incumbents with a new idea – and invest and take advantage of these technologies early on,” he says.
Infiniti may still be in the early days of the process – with two generations of accelerator programmes having emerged so far – but they’re already feeling the benefits of taking existing technologies and services created by start-ups, and adapting them for new purposes and markets.
“In the next two years there’s a great opportunity for app-based trials of services,” says Fisher. “And as autonomous drive and connected car vehicles come on stream [we’re gaining] really powerful insights on how to integrate [apps] into your car.”
The company may have ideas, but it’s difficult to make them happen without the people with
“START-UPS HAVE TO ASK INVESTORS FOR MILLIONS IN FIVE MINUTES – WHY DO WE AS A CORPORATE HAVE TO USE 40-50 POWERPOINT SLIDES WHEN WE’RE TRYING TO GET DECISIONS ACROSS?”
– Dane Fisher, Infiniti
the experience and know-how. In this case, accelerator programmes are doing exactly what they say on the tin.
Working alongside Hong Kongbased virtual reality company Visionary 777, for example, Infiniti developed a car configurator, allowing customers to customise their vehicle in advance.
PREVENTION OVER CURE
Insurance behemoth AIA started the AIA Edge accelerator programme in 2014. The company is now on their fifth iteration, and while they now feel like they’ve hit upon the right formula, it wasn’t always so successful or easy.
“We branched out a bit too far in [accelerator] number two,” says Bob Crozier, associate director of AIA Edge. He explains that working with the retail and charitable sectors around nonprofit, early-stage medical R&D rendered “brilliant ideas” – but a lack of expertise stopped them getting off the ground.
As a result, AIA is now more focused on working with start-ups that are in adjacent industries. “The agenda was to learn what the industry looks like, what health looks like going into the future, and what we need to do,” says Crozier. “Insurance for healthcare is evolving and [these start-ups are] educating us as to what products we need to create for our customers.”
With the rapid pace of technological change, insurance products have to keep up with the times. “Data is obviously very important,” says Crozier. “The more data you give us the better we can judge how much cover you need … if an insurance provider knows your family has a history of heart disease, they can advise you to look after your heart a certain way, or perhaps say you should wear a monitoring device.”
Like Infiniti’s model, the startups involved with AIA Edge keep all of their intellectual property, and AIA does not hold equity. They help the companies hone and detail their value proposition, with the ultimate aim of becoming a major customer for the start-up.
“We’ve embedded them into the team [to a point] where they’re adding value,” says Crozier. “They’re doing a very AIA specific demonstration of their ability ... we just help them make a better proposition for insurance. It’s not altruistic; it’s helping them so they can deliver a better product and we can better service our customer.”
AIA has already struck a deal with mobile learning app Gnowbe – one of the alumni of the Edge programme – to use their platform to train their agents.
There has also been a shift in the way companies think about competitors. In the case of AIA Edge, the programme invites their competitors to a pitch day, and companies whose products don’t quite match AIA’S vision get another chance to find investment.
focusing exclusively on the sale of services.
More broadly, the accelerators at Accenture have served to change corporate culture, much in the way that Infiniti’s accelerators have done. “Processes start to change, as you partner with start ups,” Seto says. “All our team members are exposed to that, and it rubs off on them.” For Accenture, the point is important: “we have to lead by example,” Seto says.
One of the big questions that senior management of large organisations might have is how to profit, or at least recoup expenses, from an accelerator programme. Seto, who was also instrumental in setting up accelerator programmes for PWC prior to Accenture, says that taking equity stakes in start ups is a difficult proposition for corporations running accelerators. “You have to be set up like a venture capital fund,” Seto says. “You need to do due diligence, plus you need to be structured to hold equity.” Companies that get into trouble might need significant amounts of help, and major corporations may suddenly find their accelerator programme straying away from core businesses.
More importantly, Seto says the mandate for the accelerator needs to come from the top and the company needs to be aligned around the purpose of the accelerator, for it to work. “You need the right mindset, and the organisation must be prepared to invest a significant amount of time and resources. It’s not a short term vision thing; you need three to five years to see a benefit.”
After running a fintech accelerator out of New York for seven years, Seto says that Accenture is now ready to “sit back with a measuring tape and try to measure successes.” The moral of the story remains simple. You need to start getting ready now for the big changes that will inevitably come your way.
“IT’S NOT ALTRUISTIC; IT’S HELPING THEM SO THEY CAN DELIVER A BETTER PRODUCT AND WE CAN BETTER SERVICE OUR CUSTOMER”
– Bob Crozier, AIA Edge
ABOVE RIGHT Frantz Lasorne, co-founder of Visionaries 777.
LEFT Infiniti’s General Manager Dane Fisher.
ABOVE Infiniti at the 2016 Chicago Auto Show.