Incubation within Corporates

Hugo Martinez
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June 26, 2024

Before we begin, it's important to understand what a corporate is and why its functioning differs from that of a classic company or a startup.

The term "corporate" generally refers to a large enterprise or a group of companies organized formally and structured manner. These companies are often major players in their industries, with a significant national or international presence.

Due to their organization, importance, strategy, and hierarchy, corporates have very limited leeway in terms of innovation, as well as a rather long reaction time. This theoretically makes them the perfect antagonist of a startup, which, on the contrary, needs speed and agility.

Fortunately, a corporate is not defined solely by its shortcomings; in fact, it possesses numerous qualities. By definition, a corporate is a powerful company with resources, a solid organization, a track record, a vast network, a strong brand image, and so on. These advantages could be more than beneficial for a nascent startup!

Different Support Models for a Corporate:

Therefore, corporates have also begun to engage in supporting startups and entrepreneurs using various specific models. We find three main models, as well as four ideation means that we will develop for you:

1. Corporate Incubator:

A Corporate Incubator is a program designed to assist entrepreneurs in developing their business ideas. This program provides resources such as office space, mentoring, expert guidance, funding, advisory services, etc. The aim is to help startups overcome the initial challenges of their creation and reach a point where they can operate independently. This method enables Corporates monitor market innovation and find new growth relay (intégration or pure (strategic) ROI).

2. Corporate Acceleration:

A corporate acceleration program is a framework established by a large company to foster the rapid growth of startups that are more mature than those found in incubators. This program focuses on identifying a specific use case to work on and aims to scale and integrate the solution within the company over time. 

Corporates provide resources such as funding, access to experts and dedicated teams, as well as customer and partner networks, etc. The objective is to accelerate growth and bring startups to a phase of commercial viability more quickly.

3. Corporate Startup Studio:

A Corporate Startup Studio is an initiative where a Corporate creates new businesses from scratch under its own roof. Unlike incubators and accelerators that support external startups, a startup studio actively conceptualizes business ideas, assembles teams to lead them, and develops the businesses until they reach maturity before launching them as independent entities or integrating them into broader operations (e.g., Spin Offs). The studio leverages the resources, expertise, and network of the corporate to mitigate risks and optimize the potential success of these new ventures.

The Corporate can also set up events or structures to attract future entrepreneurs and startups that will join its program: 

  • Intrapreneurship refers to an initiative allowing employees within large companies to develop innovative projects as if they were entrepreneurs but under the roof of their current employer. This initiative is often part of the company culture, which, through various aspects, also influences the daily work of each individual.
  • A Hackathon is a short-duration event where entrepreneurs, developers, designers, etc., come together to develop a project or idea, often centered around a theme defined by the organizer. This event is a goldmine for a Corporate, which can observe, within its own premises, future ideas/teams that it could transform into startups!
  • A Fab Lab (Fabrication Laboratory) is a facility equipped with advanced digital fabrication tools such as 3D printers, laser cutters, CNC machines, etc., aimed at fostering innovation and creativity. These spaces encourage not only the creativity and innovation of employees but also that of external individuals, as Fab Labs are often open to outside entrepreneurs. They enable the design, prototyping, and testing of new products and solutions quickly and cost-effectively, promoting an environment of open innovation within the Corporate.

All these solutions developed by Corporates allow them to incubate and support various projects. But is incubation the best solution for a Corporate? Would it not be better to outsource this support process to avoid the drawbacks of a large company vis-à-vis a startup?

As we've seen, Corporates provide an excellent environment for developing and evolving projects. Even though Corporates offer numerous advantages as discussed earlier, simply being a "Corporate" can sometimes hinder innovation.

Indeed, a Corporate, by its nature, may not be as agile as necessary to support and develop a startup. An entrepreneur needs to be quick enough to seize all the opportunities that arise, and this is not always feasible for a large company.

What is often referred to as "bureaucracy" is an organizational element that goes against the very functioning of a startup, which needs to be reactive in order to scale as quickly and efficiently as possible.

This is why the question between Incubation and Excubation arises. Being supported by a Corporate represents a great opportunity, but it needs to be nuanced based on the support model chosen by the company in question.

Ultimately, regardless of the model, the implementation of support by Corporates is a boon for entrepreneurs as they benefit from all the advantages that a large group can provide. Like everything else, there are some drawbacks, but depending on the chosen model, they become negligible as the advantages outweigh them.

It's up to the Corporates and the Entrepreneurs to make the right choice to be part of these startups that will become unicorns at lightning speed, 1700 times faster than others! 🔥

Venture Building 

In recent years, an innovative alternative called Coportate Venture Building has been gaining momentum. This approach, which is less costly and safer, involves identifying business opportunities and assembling a team of entrepreneurs capable of innovating rapidly. By investing in multiple entrepreneurial projects, companies can diversify their risks and generate new avenues of growth while adhering to their own DNA.

To excel in Venture Building, it is crucial to align with the market's pace, create an enabling environment for a dynamic entrepreneurial team, and establish a co-ownership model to align the interests of all stakeholders. This model helps better manage financial risks, stimulate innovation and flexibility within the company, and leads to the creation of customized assets that enhance the company's appeal to talent and strengthen its ability to project into the future.