As sustainability challenges intensify, every company wants to innovate their way to competitive strength. But not many have the in-house expertise to do so. This is where collaboration with startups can be a game changer.
In this video, Charles Vaslet talks to Jeff Way of Pilot44. He explains what large corporates need to know about piloting new technologies:
❇️ You need leadership buy-in and an understanding of what happens after the pilot process, especially how to scale.
❇️ Too many companies feel that if the new technology wasn’t developed by them, they don’t want it. That mindset should change.
❇️ Innovation flourishes best in an environment that breaks down the typical day-to-day corporate lifestyle.
Transcript:
Charles Vaslet (00:00):
I’d like to welcome you to this conversation by Emerald Technology Ventures. I’m here today with Jeff Way from Pilot44, and we’re going to have a conversation around technology pilots. Welcome Jeff.
Jeff Way (00:15):
Thank you, Charles. It’s pleasure to be here.
Charles Vaslet (00:17):
So I think it’s a really important topic, and it’s come up a lot with the companies that we work with, but I want to start by asking you why are technology pilots such an important first step to determining whether there’s a good prospect for further collaboration between a corporation and a startup?
Jeff Way (00:39):
Yeah, I think that’s an excellent question. And it’s definitely something a lot of our corporates are actually raising to us as well. One of the things that we see is extremely valuable and when we’re thinking about the activation of pilot opportunities, it’s a very rapid way to innovate or actually test technologies. It’s also a really rapid way to become very familiar with the startup partner that you’re potentially working with, understanding their capabilities, if they have the capabilities to scale, for example. By way of also doing a pilot, you’re also from a corporate perspective, instilling this entrepreneurial spirit, I should say, by going through the innovation process in general. Right?
Jeff Way (01:20):
Which really sets us up for understanding the strategy and approach for scalability of these pilots if they are successful. What it also does is really open up the opportunity for corporates to also understand opportunities beyond pilots. So, for example, by way of validating technology viability, for example, via pilot, we might also understand the capabilities of partnering with that startup or particular company where IP might be involved, or a net new stream of revenue or spinoff startup in and of itself is possible.
Charles Vaslet (01:54):
If I may jump in, because it seems to me that often these conversations start between business development people, and often business development people from the corporate and from the startup, but who ideally should be involved in the pilot itself? Who from the startup perspective should be there? Who from the corporate should be there? And what are they looking to get out of the pilot?
Jeff Way (02:23):
Yeah. I think that’s a really important question, is something that we also see quite a bit. And this also it’s preface that I think a very big challenge that we see on corporate innovation is really the structure of innovation internally. And what I mean by that is, do we have all the right connections and key stakeholders involved from the corporate side to actually drive successful innovation? Now, I think, important it is on the corporate side to involve the key stakeholders that are actually going to be implementing this technology, it’s just as important to understand and involve the key leaders and the leaderships, the key buyers of the technology itself. What we’ve seen in many, many cases is corporates will actually do an internal pilot and that results in going absolutely nowhere even if successful.
Jeff Way (03:16):
Because they don’t have the corporate leadership buy in. They don’t have, I would say, a phased approach to value creation. What happens after success of a pilot? How do we scale this? What’s the next step? So I think it’s important from a corporate standpoint to have the key business unit leaders involved. It’s also important to have the key R&D or engineering or technology, innovation and leadership involved. On the startup side, it’s also important to have the key subject matter experts involved. If we think about the benefits from the corporate side, one of the reasons why they’re working with startups is to get an external outside in, I should say, perspective to actually drive disruption. And that’s usually because they don’t have those capabilities internal to the corporation. So having the right subject matter expertise that the startups can actually bring to the table via the research and the development of emerging technology solutions is really driving a lot of value for the corporates itself.
Charles Vaslet (04:18):
So this what you do day in, day out, you help corporates and startups. I read a report recently from McKinsey suggesting that while 75% of startups want to do pilots only 27% of the startups who actually did pilots were satisfied by the results. What’s going wrong in your opinion?
Jeff Way (04:41):
Yeah. I think it’s a great statistic that really speaks to why innovation at a corporate level is potentially failing. And I think there’s a couple different reasons, at least some that come top of mind. One is the mentality of a lot of corporates that don’t want to adopt external technology because it wasn’t built by them. We’ve heard in the past that do what you do best and outsource the rest. Right. And that’s a common phrase. And I think this really applies to innovation as well. And this is one of the reasons why corporates are looking externally. Another huge issue that we’re seeing is the silo to approach to innovation that doesn’t really drive success after, let’s say, an initial pilot. And that involves the corporates actually developing internal technologies or developing technologies even in conjunction with startups in silos.
Jeff Way (05:34):
One of the things that we do is making sure while we’re also breaking down the silos of the corporate ecosystem and partnership with the startups, we’re also thinking more strategically about a phased value creation approach. A lot of the pilots that are successful often stop because they don’t have the buy-in from corporate leadership or the alignment across what’s really required across business leadership to actually scale that or industrialize or commercialize that. And therefore the pilots don’t go any further. What we see is now that we’re starting to get more alignment with new methodologies, new corporate innovation and growth services, we’re starting to have a more strategic approach to say what is going to happen after a pilot. What is the short, mid, and long term value that we expect to achieve.
Charles Vaslet (06:25):
So let’s pause there on methodology and strategy switching a little bit to culture. So, again, MIT came up also with some interesting research about, if you like, the increasing reliance on startups is a sort source of innovation, but we also know that the company cultures within corporations make it very difficult sometimes to interact with the startups. How can corporates shift their company culture to be more open towards open outside innovators? What do they have to do to encourage people to experiment more with technology that isn’t created internally?
Jeff Way (07:13):
This is great. I think I’ll start by saying a huge inhibitor of innovation is the lack of entrepreneurial culture or rapid innovation culture that corporates have today. And in fact, what we actually drive with our corporate clients is not only the implementation of these new methodologies and growth innovation services, but also helping to structure internal programs in organizations that actually lead to what you might call these internal innovation engines that really tap into an open innovation ecosystem and allow the breakdown of the typical day to day corporate lifestyle, where we’re also starting to build more capabilities and mindsets of driving innovation rapidly. So by way of going through these processes, it’s also about making sure that we’re educating corporates on how innovation is successful, the true value of innovation.
Jeff Way (08:10):
I’ll give you the perfect example. A lot of corporations feel that if you do have a failed pilot or at least a pilot that doesn’t deem a technology to be a success in terms of scalability, that it is a failure. But what we have to realize is that innovation in and of itself is a learning experience. And by way of going through a pilot, if it’s not successful in terms of scale, there’s a lot of learnings to be had from that. There’s also reapplication, there’s reiteration, and going through that process of innovation can put corporates one step ahead of their competitors.
Charles Vaslet (08:43):
Now, I think this whole topic is really interesting. And if I can summarize, I mean, certainly from the perspective of the interactions that we have with our corporate investors, they are extremely keen, not just on being put in contact with startups but also trying to get towards collaboration that gets towards business outcomes which justifies the whole engagement with open innovations. So very much I’d like to thank you for all the work that you’re doing with us and for coming to the European Venture Fair.
Jeff Way (09:18):
It’s my pleasure, Charles. Thanks a lot.
Charles Vaslet (09:19):
Thank you.