Start-ups can be an important source of technological and process innovation for large companies, but they must carefully manage how they integrate and develop these smaller organisations, warned speakers on a panel at the 4YFN event.
Panellists on the Seven Lies of Corporate Venturing session added that integrating a start-up can also shake up a large company’s internal practices for the better, with potential benefits going beyond beyond acquiring new technologies in areas such as 5G, AI, IoT , cloud computing and cybersecurity.
“We need to transform. Start-ups really help us do that … [they] can disrupt and refresh our practices,” said Marc Rennard (pictured), chairman and CEO of Orange Digital Ventures.
“Working with a start-up requires a lot of cultural change,” added Karolina Korth, chief Digital Officer. Mobility, Siemens. And successful relationship with a start-up, she explained, can help promote “the digital change you want”.
Not all large technology companies’ approaches to developing relationships with start-ups are the same, noted Orange Digital Ventures. For example, the unit describes itself as an early-stage, risk-oriented corporate fund, with 16 hubs in multiple locations, including Senegal and London.
“Orange can enter at a very early stage and help with training, location and very limited funding,” said Rennard. “It is very important to identify start-ups at very early stages. When they are good there is a lot of competition.”
But whatever a company’s approach, both speakers agreed that there are few quick measurements of success.
“It may take 5 to 10 years to make an exit and for an investment to prove successful,” said Orange’s Rennard.
And Siemen’s Korth also cautioned against measuring the success of working with start-ups purely in monetary terms.
“The return on investment is not necessarily financial. It could be higher motivation, a better employee retention rate, or the ability to attract new profiles,” said Korth.Subscribe to our daily newsletter Back