Hunting startups, a way to innovate faster and cheaper

August 7, 2018 - By Joseph Taylor

The big companies are hunting. Under the premise of generating rapid and low-cost innovation, initiatives to attract startups (young entrepreneurs) proliferate, with all kinds of baits: contests, hackathons, accelerators, incubators and risk investment funds. It is estimated that in the country there are more than 40 companies promoting this class of shares, in areas as diverse as banking (Santander, BBVA, Macro, Itaú), insurance (Sancor Seguros, San Cristobal), food (Molinos, Quilmes, Arcor , Mondelez and Grido), technology (IBM, Globant and Google) and telecommunications (Telecom), among many others.

By academic definition, innovating implies introducing improvements in any area of ​​the business, from production to commercialization. According to the experts, these changes are difficult to implement in the corporations, crossed by rigorous controls and cumbersome approval procedures. Startups are more agile and have very short times to experiment and obtain results. “An enterprise has two key advantages. On the one hand, they unlock bureaucratic processes. And on the other, they accelerate the innovation mechanisms since the tests are carried out in the startup itself “, explains Walter Abrigo, CEO of Incutex, an incubator of Cordovan origin.

“Working with startups produced a cultural change. Improved work methodologies, shortened product launch times and the way of doing things “, introduces Federico Espinosa, director of the area of ​​Disruption of the brewing group Ab Inbev, owner of Quilmes. Three years ago, the company promoted Eklos, a startup accelerator, which has already produced results. Espinosa says that recently launched a product “with 5% of a traditional investment and we demanded 4 months, when the usual is 2 years,” he said.

This approach between corporations and entrepreneurs is incipient, but gains ground. According to a report by Prodem, financed by the IDB and Wayra (Telefónica), in Latin America “there are already 155 large companies working with more than 2,000 startups”, with Brazil leading (64 examples), Chile (28), Mexico (24) and Argentina (23). But the Economist identified other cases that are not included in the study, among them Grido, Personal, Arcor, Banco Itaú, IBM, Chivas and the 21st century University.

Prodem’s report emphasizes that “68% of the top 100 companies in the Forbes Global 500 are already collaborating with entrepreneurs” and mentions the cases of Disney, Microsoft, Barclays, Johnson & Johnson, Visa, Amex and Coca-Cola and Syngenta . The various programs include, in an initial step, unique events (competitions or hackathons) and co-working spaces. Then there are the accelerators or incubators. And at higher levels, the alliances for the “co-development of products, the investment of risk and, finally, the acquisition of the startup,” the researchers pointed out in the conclusions.

Instrumented with Incutex, Personal opened a call for startups (Garage Personal) last month to select 5 projects on topics related to the company: entertainment, agriculture, energy, smart cities and connectivity. “The search is aimed at improving and adding value to the services we offer”, explains Fernando Freytes, manager of New Business and Innovation of the company. As a counterpart, Personal promises to invest $ 875,000 in the selected startups and provide them with legal, marketing and business advice. “At the local level it is difficult to invest in R & D, so this kind of alliances are vital,” he added. Freytes calculates that it will shorten the innovation periods “between 3 and 5 years”.

The other telecommunication providers have their own platforms. Spain’s Telefónica is committed to Wayra, a startup accelerator that operates in 10 countries and Claro, through a partner program, with which “we seek to partner with companies specialized in smart cities, mining and energy, cars, agribusiness and government “They explain. “Open innovation is something new in the country. Not so much for the multinationals, which respond to directives from their parent companies, “Abrigo clarified.

The relationships between corporations and startups are varied. The case of Grido (from the Helacor group) is illustrative. Two months ago they launched a call for startups as part of their new open innovation program. “Twenty projects were pre-selected, of which we are going to incubate 10”, says Sebastian Santiago, partner and commercial director of the chain of low cost ice cream shops, which today has 1,550 franchises in the country and another 150 distributed by Chile, Uruguay and Paraguay .

The entrepreneur adds that the proposal to startups includes 3 possibilities: receive an investment, a partnership or be a supplier of the firm. “The substance of the offer is the possibility that they can realize their business project.

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