Ekaterina Petrova, Managing Director of GenerationS, a federal-level tech startup accelerator organized by the Russian Venture Company
Corporate accelerators: foreign and Russian experience
In the last few years, corporate accelerators have become trendy in Russia. A couple of years ago, it still needed explaining what a startup is and how it can be of use to a corporation. By now, however, large companies have started to take a closer look at startups and forge relationships with them in various formats. With the aid of startups, corporations can meet ambitious targets related to business development. Importantly, they can search for not only technologies and products needed to enter new markets but also employees with unique expertise who are difficult to source through traditional recruitment.
In this respect, its useful to study the experience of foreign corporations, such as the aerospace company AIRBUS which has launched its AIRBUS BizLab accelerator in Russia. The advantages of their model are close linkages between startups and all business divisions of the company and the fact that it offers acceleration to both external projects and those of its own employees. The French company La Poste is also successfully working with startups. The team of its accelerator has managed to organize a speedy integration of a startup into a public entity.
In Russia, there are successful cases as well, for example that of StartUp Hub organized by MTS. Currently, it is one of the most successful Russian corporate accelerators which recently started a search for projects on foreign markets and announced that it was launching a venture capital fund.
Attractiveness of startups in various industries
The time when startups were concentrated in universities and had good projects but were totally unfit to do business is over now. Today, mature startups have become more numerous in Russia. Traditionally, IT startups are of particular interest to corporations because such startups can quickly readjust their processes, adapt their technology for a specific company, and bring it to a new level. Often, the possibility of testing the technology quickly is the decisive factor in working with startups.
Mostly often, startups are of interest to banks and retailers, while in manufacturing they are less numerous. In metallurgy, the company that has spent the most time sourcing and selecting startups is Alrosa. This corporation has its own innovation center in Yakutia and has the longest experience of working with startups in metallurgy. For the last few years, Alrosa has been demonstrating its success in launching new products.
Value of startups and special features of managing them
Today, many Russian startups already know that corporations are actively searching for technologies and changing their business models. Entry-level entrepreneurs have learned to bargain and started to understand the value of their projects and their potential capitalization. Because of this, corporations sometimes find it hard to talk to such startups, often due to a lack of understanding of their growth potential.
A startup must set a clear business objective and motivate the employees. In addition, for a successful integration, the activities of startups must be monitored. Its necessary to set cut-off points, identify areas where difficulties arise, and find out what needs to be adjusted in the project development strategy.
Many corporations are unwilling to spend much time nurturing a technology. The amounts invested at seed stages are decreasing. Many corporations are expecting that their investment will produce a return in a couple of years, while some are wanting returns as soon as in a year. Meanwhile, if a company wants to invest in a startup at an early stage, it must invest time rather than money. As for startups, to attract the attention of corporations, they must come up with a ready product which could be modified to fit the needs of the corporation and must have a clear vision for the future.