It's Wednesday of week 12, which means the big pitch event that we've all been working towards is tomorrow morning. The pitch decks for each of the nine companies are looking great. There's been a ton of practice. The attendee list is also looking good. The program team around me is working super hard.
Accelerators usually end in something called Demo Day. Everyone pitches. Everyone claps. In theory it's great networking and a kick-off for investment, but my feeling is it's more of a finish line to the program. Everything has to be done by this date. No loose ends in the business plan, or the articulation of the product. Demo Day is a forcing function. The real work happens next, so the past couple of weeks I've been saying to the founders they should fill the week following the program with investor meetings.
The risk is that because the program is so full on, you take a breather in the week following. Then you arrange meetings, and the emails take a week to get through then a week to arrange. Then suddenly it's a month later, and you can no longer say as your opening gambit "so, a lot has changed in the last three months."
Pace yourself. I can't remember who described to me closing an investment round as "sprinting to the start of a marathon" but it's true for finishing these programs too.
This will be the final mid-program reflections piece.
I've been thinking about the other side of the value equation: what do corporate partners and sponsors get out of these programs?
Here are all the posts so far:
Bonus post from 2017:
Half of these 163 are corporate backed.
Helpfully, the report gives reasons why a big ol' corporate would want to back an accelerator. Benefits:
Rejuvenating corporate culture to create an entrepreneurial mindset among employees
Creating an innovative brand that attracts customers, business partners and future employee
Solving business problems quicker and at lower risk
Expanding into future markets by accessing new capabilities or channels
Which, yes ok, I buy:
It's all about innovation.
I believe-although I can't prove-that over the 15 years I've been working in it, innovation has become more central to more businesses. It used to be buried in R&D departments (engineering) or "Labs" (often marketing). Now it's at the top of an organisation.
Why? Again, only a guess, but for what it's worth here's my take: technology continuously changes and creates new opportunities; a market of technology-native companies means both the competitive landscape and consumer expectations also change rapidly. Innovation is how to keep up and get ahead.
A friend told me this, probably apocryphal, story about British Sugar. British Sugar processes beets. They are the sole purchaser of sugar beet in the UK. How much they pay and how much they buy is specified in legislation. How much the sugar sells for, and how much is produced, is similarly on a quota. Consultants are brought in periodically to find optimisations in the business.
One day one bright individual realised that the by-product of sugar manufacture is hot air. What needs hot air? Greenhouses. Tomatoes. So now British Sugar is the largest producer of supermarket-sold tomatoes in the UK. I am assured this story is legendary in management consulting circles and held up as the pinnacle of consultant achievement.
I just googled to check veracity. No luck. But I did discover that British Sugar is switching from cultivating tomatoes to cultivating cannabis.
Despite my 15 years in the innovation game, I couldn't tell you with any authority what it means.
I can tell you the results. The results of a business innovating are things like:
It's harder than you would think for an established company to do these. Companies are optimised to continue doing what they already do. They are intricate machines and so, in order to maintain smooth-running of the machine, individuals are discouraged from arbitrarily changing what they do day-to-day.
Yes, a good business will always be looking for "new ways of doing things." But new ways are non-obvious because the machine cuts across lots of people who may not even know one-another. And even when discovered, there are vested interests in the old ways: it's not easy to sit in a meeting and propose, say, automation or a website to replace multiple Excel spreadsheets, when that means your buddy over the table is going to be put out of a job.
All of which is to say: discovering new ways is tough.
So innovation itself is not the result, but a whole grab-bag of processes to get there. Such as:
You can add new product lines without adding new internal structure or direct reports
Plus old-school R&D, plus simply working to invent and launch a new product and service, plus communicating new ideas, plus changing employee incentives to encourage new approaches... Etc.
And of course: working with startups.
Startups are technology-native. They make decisions with a customer-first mindset, prepared to sacrifice product, strategy, and existing practices if that means serving the customer better (to me, this is why startups differ from incumbants. It's a fundamental difference in organisation). They embody "new ways of doing things." Simply exposing corporate employees to the startup mindset can be transformative!
But there's often hand-holding required to get corporates and startups to spend time together, let alone work together. And, even when the benefit of working together is clear from the outside, corporates--as I said earlier--resist new ways.
The job of an accelerator is to reduce that friction. Accelerators help corporates innovate using startups.
Are accelerators effective at helping corporates innovate?
Well that's a different question.
Ideally what we'd see, in addition to the accelerator itself, is corporate engagement like:
But we don't, not always. Some corporates do some of these; all could be doing more.
I think: accelerators are not as effective as they could be. Too often, accelerators are considered in isolation from other innovation processes. Innovation is poorly coordinated, done piecemeal, and best practice is not shared enough.
There's a phrase in the marketing world which has dropped out of fashion. Agency of Record:
In the world of marketing and advertising, Agency of Record (AOR) was typically understood to mean a single agency responsible for all the services that a particular business might require. These services traditionally included brand strategy, creative and media placement, but today, can include a mix of other services as well, such as interactive media, web development services and digital marketing.
Advantages (see the above-linked article) include effective strategy; ownership; efficiency; trust.
more businesses now rely on a mix of different agencies to provide various specialized services.
My take is that what we need to start thinking about, for effective, coordinated innovation, is Innovation Partners.
Instead of a corporate having multiple strands of research, new product development, startup outreach, and so on, this should be coordinated by let's say a VP Innovation. Their job is to set strategy and to coordinate. Also to choose when to do work internally, and when to bring in partners. This role already exists, and I think it's important to separate it out: corporates shouldn't be innovating the whole time, in every area. Sometimes they should simply be executing in an excellent way. The job of the VP Innovation is to choose when and how to shake things up.
This points at a possible future for the traditional agency.
Given agencies are already tasked with finding new ways to communicate with consumers; to work on new products and services; on organisation change and digital transformation; on startup outreach, I feel there's a new way to package this and also solve the innovation effectiveness problem:
I'm saying agencies should step from the pier to the boat and call their role what it has already become: the stated ambition of the agency of tomorrow should be to become Innovation Partner of Record.
A new phrase for an old relationship. This is what I've been calling it in my notes, and I think it makes sense.
By which I mean: an agency should aspire to consult directly to the VP Innovation on all the innovation processes a corporate undertakes. Sometimes the individual projects will be run internally, sometimes the go-to provider will be the partner of record, and sometimes by a specialist in the partner's network will be brought it.
Translate this back to accelerators: a startup accelerator should not be run on its own, but as part of a package that includes internal comms and strategy; an audit of procurement processes; events and external comms to increase dealflow; and so on, and so on.
Thinking about my own program, this is why the Services phase is so important: the brand, visual identity, and messaging work is not merely value-add creative services for the startups in the program. It's work to make the startups understandable and easy to work with for the corporate partners attached to the program, and is a big part of what makes the Venture Studio model effective.
To my mind, we're still at the beginning of understanding all of this.
R/GA Ventures is the innovation and investment arm of R/GA. Behind the scenes these programs are not just about running the core startup accelerators. In the programs which have corporate partners, there's already strategy work to understand business unit needs and build towards meaningful collaborations. As we learn more, the process develops.
Of all the agencies I've seen, R/GA is the closest to realising the "Innovation Partner of Record" goal.
So I'll wrap up with a quick pitch: if you're a VP Innovation or similar, you should talk to R/GA Ventures about running a program.
Not least because if run it in London you'll get me as program MD, and that would be neat.