My background is in the high-tech startup world. For the last 20 years I’ve felt the pains and enjoyed the rewards of founding, helping and/or financing many high-tech startups around Switzerland and beyond. There is no “one size fits all” solution for startups, but there is a similar path when there’s a strong technology innovation:
Research -> Engineering -> Product -> Market
It’s a very challenging process to get technology innovation from the research stage all the way through to market. Each step involves a different set of risks. By far one of the largest risks is putting time and money into building a product that is unsuitable for any market. It’s an obvious risk and startups can respond by:
Getting advice from people who have a good understanding of the market you want to address. This can be from networking, or engaging consultants or even full time bizdev or sales staff.
Getting closer to large companies in the existing markets which are the most relevant
Usually it’s difficult to partner with the big established companies. There’s the “not invented here” syndrome, and a complex decision making process to interact with. Many big companies view working with startups as a risk (as the saying goes, it’s better to avoid perceived risks as “no-one ever got fired for buying from IBM”).
For the startup there’s another important reason to engage with the established companies: if the startup’s strategy is to exit then it’s more effective to be closer to one or more established companies as they are likely purchasers of the startup. Some investors call this “build to order” and it’s the most efficient and risk optimised use of cash – if you know what the big companies will want to buy, then you should build building that.
My view is that this difficulty in access to big companies is one of the main disadvantages of Europe vs. Silicon Valley. The established Silicon Valley businesses are not frightened about working with startups: many of their employees have worked for startups (many have come from a startup acquisition).
Big companies are changing. They are realising that they can’t rely 100% on innovation from within their organisation and have to embrace some form of open-innovation. So both startups and big companies need to collaborate with each other.
Enter Inno-Fuel. Alex Grutman has an incredible network and has been building open-innovation strategies for many big companies. Where as I’ve been looking at this from the startups perspective, Alex understands the innovation problem from the big company perspective. Together we saw the need to create Inno-Fuel to bring together a group of commercial-thinking experts who can match together innovation from startups and the innovation needs from big companies.
The current strategy for Inno-Fuel is to build a deal flow of 10 to 30 technology innovations – focusing on quality rather than quantity. You can find out more about the sector focus on the Inno-Fuel web site.
Posted by David Brown