Fasten your seatbelts – accelerate – it’s a wild ride
There is much talk in business about innovation and innovative business methods, but it is not always easy to capture the soul of innovation in a large corporate environment.
Large corporations often lack the right resources to support innovation i.e. the people, the decision-making processes, the values, and the structure.
This is because most CEOs assume the processes and priorities they have used in the past, that has so successfully grown their core business, are the right way to approach all things. Most people are not even aware of this bias, so it can be a challenge to get people thinking differently.
Internal Innovation ideas often fails to even get off the ground because the internal metrics for success i.e. “it needs to generate X percent profit or else” is based on the values that the firm uses to judge success in their core business.
On the other hand, startups have no such bias or pre-conceived notion of what is a success or failure metric. Due to the lack of resources, they move forward ‘intuitively’, on the search for the business model. Start-ups can embrace smaller markets, lower profit margins, and even a lack of profitability as they continue to explore, discover, pivot, and explore again. Don’t forget, before Facebook was a billion dollar company, it was just a social website at one university. Tiny market and no profit on the horizon for years!
Unfortunately, the paths of start-ups is filled with roadblocks and dead-ends, and many never survive the long journey. For big companies, innovation is often too difficult to achieve – with many opting to do nothing or, based on my decade of experience in the US, innovate through acquisition.
Welcome the accelerator.
The word ‘accelerator’ is as misused as the term ‘innovation’ but its typically a 10-12 week program where a bunch of start-ups get mentoring from entrepreneurs and customers as to how to scale their business and build a better product. Upon ‘graduation’ of the program, these startups typically get some $$ and give up a small piece of their business (5-8 percent equity) to the mentors.
The accelerator can be great for start-ups as it provides mentoring/advice around concepts such as strategy and ‘boot-strapping’ that may be knowledge gaps within the start-up’s founding team. Further, that access to the customer (e.g. big companies) can save them a lot of time and money to gain insight as to what customers really care about and what they’re willing to pay for. Similarly too, big companies get the visibility into the latest ‘game-changing’ solutions in the industry to improve their core business while also planting an innovative ‘seed’ within their current organisational culture.
And in the end, it is fun. Challenging, terrifying, often stressful, but still fun. A safe to fail, wild ride that every business needs to be part of.Applications are now open to tech start-ups to compete for places in KPMG Energise, Australia’s largest technology accelerator for the energy and natural resources (ENR) sector. Initiated and run by KPMG Australia, the program is designed to promote collaboration across the sector by connecting the brightest tech start-ups with Australia’s leading ENR companies. Read more here
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