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.

The Peak (Hong Kong) - - Contents - STORY CHRISTY CHOI

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.

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