Open Innovation with Corporate Accelerators: access to new technologies and startups

Recently, members of the Institute of Entrepreneurship and Innovation Science published an article in MIT Sloan Management Review. The team consists of Denis Bettenmann, Ferran Giones, Alexander Brem and Philipp Gneiting. What are the key insights from this study?

To gain access to new technologies and collaborate with startups, many established companies use corporate accelerators (CAs). One of the companies that has early adopted this model is Mercedes-Benz AG, which has set the focus on accelerating strategic-fit. In 2016, they have founded Startup Autobahn, an open corporate accelerator that has attracted more than 30 other companies in the meantime. Unlike conventional CAs that are typically established by a single company, an Open CA welcomes multiple sponsor companies and can attract a broader array of more mature startups.

The article published in MIT Sloan Management Review takes Mercedes-Benz AG and Startup Autobahn as a case study and focusses on key elements in the CA process that have to be in place to effectively integrate startups as a source for innovation. It also shows how to maximize the rewards of the participation in an Open CA.

The first phase of the CA process – scouting and selection – has to ensure the right fit between startups and business units that then move together into the second stage. In the second stage, which focusses on the solution adoption, the challenge is to prove that a startup’s solution can fill the corporate’s needs. The last stage – solution integration – has the goal to implement the startup’s solution at scale into the corporate’s products and processes. The CA team of Mercedes supports the business units in all phases of the CA process to ensure to get the most out of it for the corporate and the startup.

When it comes to maximizing the rewards of Open CA participation, the authors offer three insights. First the CA team has to build up internal commitment to external innovation in the corporation, e.g. through identification of technological “white spots” of the business units. Another aspect that has been highlighted is to embrace co-opetition in the open CA. Multiple startups may offer similar solutions, and multiple sponsors compete to attract the best startups, which increases the overall levels of innovation.

The third consideration that should be kept in mind for the Open CA participation is to choose a playing field. Results can be improved by setting parameters for the kinds of startups, technologies, and applications the corporates choose to pursue. Setting these parameters helps them avoid ending up with an unmanageable portfolio of projects.