The lean and fast approach of solution- and decision-making could provide a jolt of fresh ideas to a large enterprise

In 1976, Kodak, the company that popularised amateur photography, took 95 per cent share of film sales and 80 per cent share of camera sales in the US. Four years later, its sales soared above US$10 billion.

Today, the once household name enterprise has fallen on excruciatingly hard times. In 2010, Kodak’s command of US camera sales fell to just 7 per cent, and in 2012, it filed for bankruptcy, ceasing all sales of camera equipment.

Many have pinpointed Kodak’s inability to evolve and adapt effectively to rapidly shifting trends — in particular, the digital imaging market — as the major cause of its failure. Kodak is still alive and breathing, and has reinvented itself in several ways. For example, in Singapore, it launched a photographer marketplace called KodakIt. Nevertheless, it is a mere shadow of its former glory.

Kodak’s example is a painful and perennial lesson of the consequences of not adapting to the times and innovating. No corporation is too big to fail. The grounds beneath them are always shifting, so corporations need to stay on their toes and keep a keen eye on new technological trends that may threaten to disrupt their business.

To stay ahead of these disruptions and spur new innovations, corporations can leverage on the expertise of startups. While these are small companies, their lean structure means that they are nimble, make decisions fast, and can roll out new products and features quickly — albeit not at scale.

A report produced by 500 Startups and INSEAD — which focussed on the need for corporate innovation — said that startups are essentially like an R&D department of a company, just outsourced.

These guys can innovate in ways a large corporation chained to an old business model would not be able to. Startups are more risk-taking and adopt a ‘build fast, fail fast’ approach. For new business models and innovative products to be built, it requires a paradigm shift in the product development methodology and thought process.

For startups, corporations can offer them a wide network and funding to develop, distribute, market, and validate their products.

Engagement channels

There are many different ways a corporation can engage with startups. Banks such as DBS collaborate with startups via its Pre-Accelerator programme called DBS HotSpot. This programme awards S$25,000 (US$18,000) to entrepreneurs, provides mentoring from DBS executives and partner accelerators.

The programme culminates in a Demo Day where the startups have to pitch to investors and other accelerators. DBS HotSpot takes zero equity in the enrolled startups.

Other programmes, such as Mediacorp’s incubator Mediapreneur take equity in its startups. In exchange, it provides startups with mentoring, co-working spaces, funding, partnerships, branding, and marketing through its TV, Radio, and print channels.

It’s not just the banks and media that are seeing the value in collaborating with startups, the healthcare sector is also working with startups to develop medical solutions.

Last month, Singapore-based medical company Parkway Pantai collaborated with e27 to work with Kazakhstan-based startups.

To provide some context, Kazakhstan is actively seeking new business opportunities outside its regional markets. Southeast Asia is fast becoming a vibrant and rich tech ecosystem, but it is also fragmented. So in order for the Kazakh startups to work their way through the region, they first need to establish a foothold in a stable business hub that has connections to all the surrounding markets. That hub is Singapore.

Rashid Dyusembaev, co-founder of crowdsourced delivery startup Deliver With Me, led the envoy of Kazakh startups to Singapore. He said: “The Kazakh market is quite small — just 17 million population. If we want to build good startups they should be scalable, it means they have to grow abroad on bigger markets. In order to do this, our startups have to get more experience in overseas markets.”

“Kazakh market is quite similar in many ways to markets like Indonesia, Vietnam, etc. But nobody knows Kazakh startups in Southeast Asia. To get first traction in Southeast Asia the best option is to go to Singapore and start something,” he adds.

Working with corporations can be a good move for startups

Dyusembaev said that working with corporations is a good move for their new entrants who need cashflow immediately.

“Corporates have problems you can solve and they have already big customer base you can explore. The biggest challenge for corporates is how to digitalize itself. How to explain your company that traditional way of business is already dead … so far not so many corporates can admit this.“

Thankfully, though Parkway Pantai had initial doubts about the programme (and also because it has not worked with Kazakh companies), they were open-minded to the ideas presented by the Kazakh startups.

“Some of the solutions provided by the startups were very interesting and refreshing for us. We enjoyed the energy they brought to our meetings, and we brainstormed together with the startups to refine the ideas. These solutions seek to enhance our engagement with doctors and potential patients and allow to relook the healthcare value chain,” said a spokesperson from Parkway Pantai.

“What was interesting for us is the startups could look at the current structure of the marketing teams, which allowed them to deep dive into solutions that we can look into implementing in the short-term,” they added.

The Kazakh startups also worked with PSA (formerly called the Port of Singapore Authority), which is one of the largest port operators in the world. What is interesting about PSA is that it has its own corporate VC arm called PSA unboXed.

This initiative supports startups primarily through its pre-seed incubation program that provides investment funding, mentorship by industry professionals, co-working space and access to a live port environment to test-bed their solutions.

In addition to the incubation program, PSA is “also open to exploring various forms of collaboration with more mature start-ups, including investment, proof of concept, market validation and procurement to assist them in the development and commercialization of their solutions,” said a spokesperson for PSA.

PSA also has a technological roadmap called Container Port 4.0™, designed to improve operational efficiency and arm PSA with new operational capabilities.

Startups can provide relevant solutions for corporations

Like Parkway Pantai, PSA was also impressed by the solutions put forth by the Kazakh teams.

“The Kazakh teams were able to produce solutions that are directly relevant to PSA, ranging from a damaged container detection system to a hauler route planning system. This was very impressive given that they had no prior knowledge of port operations,” they said.

Based on these examples, it is quite clear that benefits for corporations who work with startups are very tangible. The future of corporation innovation lies in the hands of small teams who have the ability to think out of the box. Those who dismiss this as a passing fad will be at risk of fading into oblivion. Tech will continue to disrupt and at a faster-pace, is your company ready to evolve or is it waiting to sink?

—-

Featured Image Copyright: rawpixel / 123RF Stock Photo

The post Working together, corporations and startups have an edge in agility, resources, and building out-of-the-box solutions for each other appeared first on e27.