MonkeyMinds: The truth about open innovation between startup and corporation. A story of knights, princesses and beaches.

An article by open innovation Not talking about big names wouldn't be a good article. Like any science, citing your references is an obligation. We could talk about Henry Chesbrough, Erik Ries or Xavier Marcet, to name a few examples. But today we will not talk about theories and beautiful books. Today I want to talk about reality. The one that is hard to see in the midst of so much editor review. Why reality, sometimes, is not as beautiful as it is presented in books. Sometimes, some insignificantly important details are avoided, but in this blog we try to be faithful to our thinking and we like to share them.

How would I say Javier G. Recuenco speaking of complex problems:

“For every complex problem there is an answer that is clear, simple, and wrong”
H. L. Mencken

Not everything can be theorized, nor is every theory applicable in practice, much less to your particular case. The simple thing seems beautiful, leaves our mind calm and allows us to breathe coherence, perfection. Far from reality, innovation is harshness, irregularity, is full of failures and, above all, it is difficult to predict.

I would like to talk about innovation in the corporate world from the point of view of a startup. Our biased view of reality, although we already have some experience behind us after having worked with several corporations.

To make it easy to understand, I will use the beach as a metaphor (because of our proximity to the Mediterranean and my passion for the sea) accompanied by brushstrokes of our own experience and a pinch of personal opinion.

I hope it will not leave anyone indifferent, it may even inspire someone. Who knows, they say that stories are the most powerful weapon in our world...

Every good story begins in an idyllic place on the Costa Brava. Coarse-sand beaches and crystal clear water. You can get inspired here Link.

Every good story needs a Caballero, the startup. This time, turned into a sad building brick. Made from clay. Perfectly straight out of the mold of any business school, startup incubator and/or MBA. You already understand me, serial entrepreneurs. (Greetings to the entire industry 😄

I think we're the fastest startup in history so we'll have seen something good in signing up so much... 😉

). Perhaps it is that we too are part of a series, although the experience makes us look at the world from a different point of view.

There is no story without a Princess. Ours will be called Corporate. With great scores of results that our gentleman aspires to be able to scratch and perhaps one day he will conquer. In this story we will turn it into beach sand. Millions of small grains perfectly united to form a great and wonderful beach. Just like its thousands of workers paddling in one direction.

You can sense an epic story full of adventures. All that remains is to introduce our evil and dreaded dragon. The perverse MARKET. We will give it the shape of the sea, storms and waves. In the memory of all, we will remember great market victories over Kodak or Blockbuster, as undisputed leaders, they ended up on the seabed and utterly forgotten.

The story begins at the beginning of this century. Traditional innovation seems exhausted, lagging behind the incremental development of a regular business without much expectation of major improvements. Quiet days of sun and beach, some would say. Nothing to worry about. But suddenly, a great stranger appeared. Climate change.

Unexpected storms, of extreme force that make entire beaches engulfed by a market ruthless by new business models disappear in just a few years, even months, without time to maneuver.

Our beloved corporation is trying to face the challenges of the market and decides to open its beach and embrace new ways to combat climate change. This is where open innovation is born.

Collaboration between startups and corporations with a common goal. Give an innovative market exit, with external help, new ideas, easy and fast to execute (and on top of that very cheap). What more can the princess ask for?

Just one thing. Decision. It is essential that the corporation be created and committed to innovation as the model that will maintain the company's survival. For this reason, it is essential that top management truly bets on this process. Dedicate resources to make the needle move. Budget and human resources dedicated to making plans work. As Team A would say.

The word Greenwashing sounds a lot lately. Companies that use the environment to provide a more committed vision of the company. (Read Apple removing chargers from its iPhones on the grounds that they are doing it for the environment). We associate innovawashing with large press conferences, large PR agencies and little pilot project. The next storm may be ahead of you... remember that!

Can you imagine a super press conference, with a big project to build a supermega-construction, with infographics, cameras and not a gram of cement on the beach? Well, just as we often see politicians with great ideas and little execution, there are also corporations with a lot of marketing and little execution.

Either your business is to be in the media all the time, or rather look for some other princess that you can really learn from. At the other extreme, we find the pharaonic projects, with only 20 years of delays and 3 Gigatrons of steel and cement. In which the sea takes her ahead at the inauguration. Surely one comes to mind...

What situations have allowed us to move the needle as a startup?

Fight for a pilot project. I remember the first one we did with Aigues de Barcelona (Water Utility of the city of Barcelona) within the defunct Sity accelerator (Yes, innovation fails, it's normal, but you learn). Aigües de Barcelona is a public-private company, with a vision for innovation that is out of the ordinary in our country. (Hopefully this will encourage more companies to follow in their footsteps!)

Our negotiation was clear, if there is no pilot we are not interested. I think I remember that we were the only ones fighting for a pilot. Obviously we didn't win the contest, but we won something more important. To have demonstrated the value of our project and to be able to fight for a second pilot: Put our technology into production and see the real impact. We were touching the sky, seeing the million-euro contract (😂 we were young and inexperienced I would say now...).

In reality, we had to go through 3 pilots and 4 years to achieve full integration into production. A very hard journey, full of uncertainty and demand but above all full of learning.

Thanks to these pilots, we were able to enter an incredible level of depth into the analysis. We even demonstrated that the drivers who paid the most attention to the optimized routes we suggested were 10% more productive than those who didn't follow them as much! It's no coincidence that the drivers were happy that two guys with a geeky face could solve a daily, costly problem that had a direct impact on their goals 💰).

If you want to know More details in this video (with 2 other startups talking about their experience).

The last success story I would like to talk about is Prio Energy. Energy company with an innovation program Prio Jump Start very well organized. They just chose the 3 startups selected to pilot their solutions and SmartMonkey was one of them.

What have we learned in this case? Get your product to work as soon as possible. Even before your company is elected. I want to think that part of the reason for our choice was how easy and fast it is to put our tool into production. They were able to start optimizing production routes with literally 1 meeting and a 20-minute demonstration. Even we couldn't believe our eyes. We have overcome the main obstacle, now it is time to demonstrate real value in order to grow within the corporation.

My recommendation to others is that one should always be humble, say NO and stick to a strategy. Open innovation is a path that is done hand in hand. The princess and the gentleman. The corporate and the startup. If both work together, make an effort, success is guaranteed. A beach that is well reinforced with bricks is much more resistant to any type of storm.

If your employees, like those at Prio, are open to trying new things that make their daily lives easier, faster and more efficient. What is to be expected is that wonderful things will happen. Time and storms will put everyone in their place.

Main factors for the success of the start-up-corporate collaboration

After going through several collaborations, Aigües de Barcelona, Heineken and Prio Energy, my personal recommendations can be summarized as follows:

1. Top-bottom support: Without clear management support, it's impossible to succeed. There will always be other priorities. Innovation for corporations must be a priority. Failure is guaranteed, but if you don't innovate, the corporation is sure to fail.
2. Continuity to the project: If the projects are successful, giving them continuity not only helps the startup, but it also encourages intra-entrepreneurship. You don't want those experts you've been training for years to decide to leave their golden cage to sell you the same much more expensive thing, right? The security of a large company and the resources to innovate as an outsider can be wonderful.
3. Requirement to the startup: Put the startup in a difficult but real situation. If you can demonstrate courage in the worst case scenario, the rest will be a piece of cake. However, remember to continue the project if it goes well, or you will generate frustration in the startup and the internal team.
4. Free pilots, no thanks: Top-bottom support is essential and must be accompanied by resources. Startups have a healthy habit of wanting to eat (little and cheaply, but to eat something, yes). If the CFO doesn't scratch his pocket, real innovation is unlikely to exist. Without a budget, it's also difficult to demand anything from anyone. Neither startups nor corporate teams. In addition, startups tend to have a short lifespan, supporting them allows them to generate metrics that encourage other investors and have more resources to invest in your company's innovation.
5. Deal flow: The main problem for investors (Venture Capital) is to get enough quality deal flow. As a corporate, getting enough startups to innovate with will not be an easy task. Having a good brand, good references, a good collaboration proposal and having other startups speak highly of your program is a great cover letter that will make it easier for you to work in future editions. Obviously, more and better companies will want to work with you.

I just want to end this story with a film ending: The brick ends up molten in the corporation as just another piece of its complicated beach of sand, stones and waves. Who knows, they may one day become part of the same company, but until then, they will work together in the face of storms and climate change.

Who would have said that optimizing routes was so beautiful and with such a noble mission: To generate less emissions to save our beaches.