“When The Rate Of Change Inside An Institution Becomes Slower Than The Rate Of Change Outside, The End Is In Sight” – Jack Welch, CEO of GE, 2000
This guide will teach you how to build a corporate accelerator to engage startups.
Corporate accelerators have a mixed reputation in innovation circles. When used correctly, companies can build valuable partnerships, identify M&A targets, and gain positive press — all while creating a culture of innovation. When used poorly, they are a highly visible and expensive mistake.
The good news is that building an accelerator is a well defined process. We’ve combined the best resources available with our experience building innovation tools at corporations to help you build an accelerator yourself.
Innovate or Fall Behind
“Your current company positioning, customer base, or revenue is no indication that you will make it in the digital era. If you don’t take certain steps to drive innovation in your company and move towards being an exponential organization, chances are that you are on your way to becoming the next out-of-date organization, similar to Nokia or Polaroid.” – Deloitte, 2015
In 1965, the companies in the S&P 500 had been there for an average of 33 years. By 1990, that average tenure had dropped to 20 years. And by 2026, it’s expected to shrink to 14 years. Innovation isn’t just a fact of life. It’s accelerating. According to KPMG, CEOs overwhelmingly believe that the next three years will be more critical for their industry than the last half-century had been, and that technological change will be second only to economic factors for impact on growth in that time.
Innovation Through Corporate-Startup Engagement
“Our research found that although nearly three-fourths of large companies (71 percent) reported successful collaboration with entrepreneurs, unfortunately little more than half of entrepreneurs (57 percent) agreed. This gap must be closed.” – Accenture, 2015
In an age of innovation, even large corporations must be entrepreneurial. Established organizations and startups can clearly help each other, but collaboration between them has not always been fruitful. According to the joint research report The State of Corporate/Startup Collaboration by Imaginitak and MassChallenge: “While 86 percent of large organizations view innovation as crucial to their future, most of their current attempts to work with startups to further that objective are early stage, underfunded and scattershot, such that 25 percent of corporations aren’t even sure how much they’re spending.”
This sort of haphazard approach toward innovating through the startup ecosystem has to change. It’s not enough to buy your team some company hoodies or put a ping-pong table in the break room. Companies must have a concise and thoughtful plan to engage startups. Imaginitak/MassChallenge report that 82 percent of corporations view interactions with startups as at least somewhat important, and 23 percent called them “mission critical.” Efforts at innovation are no longer nice things to have. They’re crucial.
The Guide to Building a Corporate Accelerator
Corporate accelerators represent a new frontier in the startup ecosystem. There’s no shortage of high-quality information about accelerators, but at this early stage, that information is scattered all over the internet.
Founders, mentors and alumni share wisdom in interviews and blog posts. Governments, organizations and individual researchers collect and analyze data to determine accelerators’ impact and outcomes. But finding impactful information in one place, organized and usable, has been difficult. Until now.
What follows is a curated resource for creating a corporate accelerator. With a foundation in traditional accelerators and corporate innovation strategies, this guide breaks down the core competencies necessary to tap into the entrepreneurial ecosystem via the accelerator.
We cover a lot of ground, so to make it more functional as a reference, this guide contains five main sections, not all of which will be relevant to everyone’s situation or needs.
Defining Corporate Accelerators
Distinguishing Factors, History and Advantages
The first article in this five-part series provides background on accelerators (what they are and what they are not) as well as a brief history of the rise and growth of corporate accelerators.
Designing an Accelerator Program
Duration, Location, Focus, and Learning
This is where the engine of the accelerator is created. Depending on the organization’s needs, accelerators can “move fast and break things” or run long and lean. Every specification needs to be tailored to the parent firm’s structure and future goals. In this section, we outline major design considerations when building an accelerator.
Attracting Accelerator Talent
Startups and Mentors
Startups and mentors are perhaps the most important parts of an accelerator program. Top accelerators thrive at the intersection of promising startups and thoughtful mentors. These two groups act as the fuel to create invaluable networks and interactions that lead to a successful and enduring accelerator.
Managing the Corporate Accelerator
Cost, Leadership, Timeline and Metrics
Accelerators are a complex tool that exist in complex organizations. It’s one thing to talk about how to select promising startups but it’s a whole different beast to talk about how this tool can exist alongside daily operations. Who “owns” the corporate accelerator? What risks are associated with this tool? What is the timeline for a return on investment?
After the Program Ends
Alumni and Investments
Post-program is the time to take stock and tweak the corporate accelerator process. Accelerators are a unique business proposition. Their role is to increase the rate and quality of learning over a short period, but they also exponentially expand the reach of a corporation for the long term.
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