The different mentalities that startup and corporate entities possess make them an unusual match. There are over 200 corporate accelerators looking to make a difference in the entrepreneurial ecosystem, but their efforts are most often seen as PR stunts. They have the infrastructure and market capital needed to run these types of programs but fail to resonate with what startups are at their core.
Findings and insights
- Many corporate accelerators start as a PR or CSR program, either pushed by an internal champion with access to the CEO and board, or by copying competitors’ initiative. In many situations, these are a waste of resources. However, we’ve seen situations where corporate accelerators have filled a gap and have ignited an ecosystem. In Thailand, for example, corporate accelerators are in fact the ones that are pushing this industry further, with corporate VC being the driving force behind.
- There is a misguided mindset among many founders, that corporates are dying dinosaurs, ripe for disruption. The story of David and Goliath is very appealing, but it rarely occurs in real life. The right mindset is a win-win partnership, where a startup brings innovative ideas, an unreplicable speed of execution and iteration, scrappiness, and a corporate brings resources, domain knowledge, and access to customers with a low CAC.
- That being said, implementing an early-stage startup product in an enterprise environment is rarely feasible because of compliance, risk, long decision cycles and more. This is an extra reason to carefully choose success KPIs on both sides, with realistic expectations (check whether the corporate partner has ever done such implementations before).
- While private accelerators struggle with funding, corporate accelerators struggle with internal politics. A corporation is usually too slow and bureaucratic to put together successful programs. Corporations that run global and cross-industrial accelerator programs have united forces with other already known accelerators, taking advantage of the know-how they can bring to the table. The way corporate accelerators have evolved is either with in-house programs (Wayra and Microsoft Ventures), outsourced programs (Barclays, Kaplan, and Disney) or operated in partnerships (Citrix and Red Hat).
- We have recently seen the opposite phenomenon: corporations withdrawing from partnerships with private accelerators, and (re)starting their programs on their own. We don’t have any data to evaluate the outcomes of these initiatives, so we are waiting to see results, despite being a bit pessimistic.
