Companies need will and commitment to drive innovation
Companies are not yet fully committed to changing business models and partnering with start-ups to derive mutual benefits, say experts
Corporate entities must possess the will and commitment to drive innovation, be it internally or through partnerships with start-ups, say experts.
In a panel discussion at SP Jain Institute of Management and Research’s Business-Academia Conclave 2018 on Saturday, Qualcomm India president Larry Paulson; Haresh Chawla, partner at venture capital firm True North; Prof. Mohanbir Sawhney of Kellogg School of Management, and Anunta Technology Management Services Ltd’s executive chairman Ananda Mukerji spoke about how companies can drive innovation, partner with start-ups and the challenges involved in such collaborations.
Although there is intent to drive innovation, companies are not yet fully committed to investing more, changing business models and partnering with start-ups to derive mutual benefits, said the participants.
“I think the concept of partnering starts with high willingness. At Qualcomm, we recognize that even with all the great minds working with us, we have to reach out to the community and partner for innovation,” said Paulson.
Chawla of True North added: “People are outsourcing innovation or scouting what is happening in the market but not really committing to innovation… I would call them fads, where a CEO gets an idea from some bunch of people, the board usually, that he should see what is happening in the start-up space and have a start-up engagement platform. But unless you are willing to commit to changing your business model, you are doing nothing.”
Prof. Sawhney, a board member at Reliance Jio Infocomm Ltd, said that at Jio, the emphasis is more on driving innovation internally than through partnerships.
“The belief at Reliance Industries in general and Jio in particular is that you have to own your own destiny. You can’t rely on vendors to do innovation for you. You work with all those people but be in control of the core technology and basically invent your way through,” he said.
Companies need to devise their own strategy on innovation and if they are looking to partner with start-ups, acquiring an entire start-up may not necessarily be the best option.
Chawla said corporate entities should not try to make a start-up entrepreneur an employee. “When a corporate really wants to engage with innovation and start-ups, it should sit back and think what is it willing to do, willing to commit. You can’t bring those people into your organization, you need resource them, keep the equity ownership alive, keep the fire burning, and ensure that you keep them at a distance. Of course some exceptions will work,” he added.
Prof. Sawhney said companies can become lead users of the technology developed by start-ups and provide validation without owning them. Companies can acquire a product or technology and not the start-up.
It is also important for start-ups to align their expectations when they look for partnering with corporate entities.
Mukerji of Anunta Technology said that when start-ups want to partner with companies, they mainly want market access and access to knowledge as to what is happening in that ecosystem so that they can continue to innovate faster.
“The challenge is that in reality large corporates completely fail in making their distribution fully available to the start-up. The sales guys are not going to go and sell some small innovative product. So as a start-up, if you are betting on their distribution system delivering value for you, it is not going to happen,” he said.
Paulson said that one of the biggest challenges he sees in the Indian start-up community is the lack of visibility to what is needed around the world.
For a company like Qualcomm, it needs to partner with start-ups that can provide technologies which can be applied and delivered to its system globally, although there is room for a certain level of customization for local markets, he said.
Editor's Picks »
- Cube Wealth raises ₹14 crore in Series A funding
- Morgan Stanley arm in talks to invest $55 million in KSH Group’s warehouse assets
- Goldman Sachs changing Asia investment banking leadership
- Investors sitting on $40 billion capital reserves for India
- Opinion | Beware the dark side of Artificial Intelligence
- UltraTech’s dismal Q2 results darken outlook on cement sector
- NBFC liquidity crisis set to worsen real estate sector woes
- RBI pause on interest rate hike may last only till December
- Policy rethink and higher volumes to aid container shippers
- DCB Bank delivers a strong Q2 but pressure on margins foreseen