Nurture Startups in your ecosystem to keep the competitive edge

Vodaphone devised a very smart approach to open innovation which will certainly reinforce their competitive edge. It’s called Startup bootcamp. The concept is the following: They invited early stage Startups to settle down in their Amsterdam HQ for the first critical months of their existence.

By the way, Vodaphone’s HQ is one of the coolest office environment I’ve ever seen. They have it all: the cool design, the cubicles replaced by stairs, canteen tables or the sunny terrace and even more importantly, the baby-foot table. If they cannot be innovative there, nobody will !

During these critical months, Vodaphone provides mentoring and other types of support. They even have a devoted studio / pitching room to help startups practice public VC funding speeches.

They nurture startups on site rather than letting them operate in the distant outside world. They open their technology to them. This is a very smart way to ensure startups will develop solutions that fit their ecosystem. Of course, it also provides the opportunity to be the first to benefit from it.

Integrating startups early on in their ecosystem would certainly make sense for many industries at the intersection of a physical medium and creative content (e.g TV, music, press, video and related equipment companies)

Is that not as well and idea to explore for other sectors? I can think about old fashion automotive companies. What if they invited startups that develop green chemicals, hybrid technologies or online apps to work from an onsite startup floor. What if Pharma groups could do the same with datamining startups?

And what about your industry?

Breakthrough time: when all forces converge…

In many industries, one general product design dominates. Design might have evolved slightly over the last decades, but not fundamentally.

A major reason is that dominant players have low incentive to change once the market is at maturity. They invested once. Now, the cash-cow design should be milked. Another reason is that norms and habits are difficult (and expensive) to alter. The human mind tends to satisfy itself with what he is used to, even if it is suboptimal. I prefer not to tell you how many years it took me to switch from a PC full of bugs to a Mac…

But there is one more reason: the overall context must be ripe for the innovation to make sense to all players.

Let’s look at heavy trucks. They did not change so much since you were born did they? They are heavy and rectangular. And I don’t even speak about US heavy trucks, which are monsters compared to their European counterparts. You can easily imagine their Cx (aerodynamic factor) and the resulting fuel consumption. Actually, more energy-efficient designs were suggested to the industry over the years. However, petrol was cheap. Regulations were not focusing on energy-saving or CO2 emission. What incentive did freight companies or truck producers have to invest in new trucks that solved such environmental issues?

But now that regulations, governmental programs, variable costs and customer mindset all converge in the same direction, time has surely come for the development and easier adoption of a new design.

Success time for an innovation is when all forces converge in the market environment.

Has the time come for yours?

Channel innovation and more: the Dr Oetker & Pizzamatic case

Have you heard about Pizzamatic?

Take an equipment company. Add a strong German deep-freeze pizza brand. Let it cook for years. Et voila! You get an automatic Dr Oetker pizza machine.

My Italian ancestors would certainly be turning themselves in their graves, if they knew that! But still, it’s interesting from an innovation standpoint. You were drinking coffee from a machine, so why not eating pizza similarly?

First of all, it is a channel innovation. I assume that Dr Oetker was facing increasing competition in supermarkets. They surely needed to extend usage in untapped territories. But it is not the first automatic pizza machine in the market. So where’s the magic? I guess it is “the Intel inside effect”, the association with Dr Oetker brand that consumers already trust. Besides, the promotional video also highlights many convenience benefits for the user (the pizza lover) and the intermediary (the machine owner who has to refill pizza and clean the device). Finally, the strategic positioning is very clear. The target is high traffic places where people have limited time, such as airports, train stations and universities. By the way, as an innovator, you should not only convince the pizza lovers but also the high traffic place owners (the channel). They are the real first line customers. If they don’t like you, nobody will see you…

I have not tried it, but hopefully after five years technical development and two years market testing, the technology should work.

In any case, they seem to have many ingredients for a success recipe!