Size Meets Speed: Corporate and Startup Engagement
Since the known beginnings of the term in the late 1990s, startups have had a major makeover. From struggling tech enthusiasts who tried to address a gap in the market with innovation to unicorns making corporate history, startups have covered vast ground. It would not be a stretch to say that “startup” is one of the most used words of the decade 2010-2020 (although “COVID” is a serious contender)!
The latest report released in January 2021 by the Department of Industrial Promotion and Productivity (DIPP), and Start Up India, finds that India is the 3rd largest startup hub in the world, with 41,317 startups (recognized by DIPP till end of 2020). Bengaluru is a hotbed for startups with nearly 7700 of those.
Against this background, there are some very interesting trends emerging, where instead of fighting him, David joins forces with Goliath to create powerful synergies. A new wave of large companies such as Qualcomm, Bosch, Intel, Airbus, SAP and others are setting up their own dedicated accelerators. Increasingly, in the exciting startup ecosystem of Bengaluru, the leading multinational companies (MNCs) and large Indian companies have initiated their own cohorts and platforms to identify and select startups. The industry majors have begun to realize the potential and the value that the nimble and innovative young companies can contribute.
What the Big Companies Get Out of It
For these large corporations, the key objective is to accelerate innovation and speed to market. According to Mr Dattatreya Salgame, CEO/President of Bosch Engineering and Business Solutions India, “working with startups and universities enables companies to drive innovation in an agile manner. This helps large organizations to quick-test the waters with minimal effort and time, while also providing an opportunity to address customer problems quickly.”
To achieve these objectives, these large companies create an in-house cohort of startups that understand the culture and mission of the MNC. Working in tandem, this collaboration provides quick and proprietary solutions that can help them gain a market advantage, while the startups get the financial and strategic support they need.
How to Find Startups for Incubators
Different companies have different ways of choosing startups and onboarding them. Let’s take Qualcomm, a technology company, as an example. They find their startups primarily through an annual program that resembles a competition, known as QDIC (Qualcomm Design in India Challenge).
QDIC, since its inception, has evolved through five annual editions, making it India’s longest running hardware and IP incubator program for startups. So far, 65 of the nation’s top startups have been incubated through it.
“These startups have been selected from hundreds of applicants, based on the relevance of their innovative products to India’s societal needs, ability to do system level design, incorporating hardware and artificial intelligence, and quite uniquely, the ability and desire to protect their own innovations through patenting,” says Sudeepto Roy, VP Engineering at Qualcomm.
The win-win situation that these companies have been able to curate makes the relationship attractive and symbiotic. In return for their expertise, startups receive grants and access to domestic and global business development networks, allowing them to promote their business to a wider audience. Furthermore, they are eligible for investment consideration by the companies’ venture arms or even become partners in a global consortium that builds in greater competitiveness, and quick reaction capability.
The idea behind the collaboration remains the same. Bigger companies are looking for innovative, agile startups that can help them drive the corporate strategy forward. The selected startups are working closely with the relevant business units as a part of their business plans and are associated with the outcomes.
The main element of such an incubation program is that the innovation management is done with uniform processes and standard legal procedures for the engagement (thereby improving efficiency for multiple engagements), meaning it is scalable.
The pilot programs have resulted in very encouraging outcomes and valuable learnings. In the last three years, Qualcomm has disbursed $1.2 million in grants to highly successful startups.
For Bosch, equally running a pilot program, the winning startups have become an integral part of the company and partake in its Go-to-market partnerships.
Startups are much faster and can quickly develop prototypes, which can be a challenge for a larger company especially if it is a new trend (Blockchain, 5G, AR/VR). While the core and IP are developed in-house at the larger company, startups add value by providing the complementary offerings.
Together, “the David and Goliath” team are defining new paradigms in their quest to conquer the markets with speed and scale. It is a trend that will benefit many.
Anandi is the Director of the Fraunhofer Office, India
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