Half of the Fortune 500 will not exist in ten years, say c-suite executives. Corporate Venture is at all-time high. Deep Tech start-ups look with envy at established firms’ assets. This post explains why corporate facing digital disruption need to enhance their innovation strategy by creating complete autonomous teams working exactly like start-ups. It also highlights the unique advantages of these autonomous teams / corporate start-up studio in pursuing successfully breakthrough and disruptive innovation as they follow a design and data driven innovation journey.
Digital innovation mapping
To build an effective innovation strategy, it is important to map the different types of innovation. Abernathy & Clark, Clayton Christensen, Robert E. Johnston, J. Douglas Bate and Greg Satell made some important contribution to this topic. The most relevant measure of innovation level or intensity is measured against each firm’s referential by looking at the changes it introduces both on the technology/application and business model/market dimensions.

The Path Dependence theory explains us why corporate develops overtime a strong immune system that will prevent them to adopt negative but also positive changes. This immune system, embedded in the firm’s DNA, creates a strong roadblock to radical innovations (disruptive and breakthrough ones).

Digital disruption concerns all industries
A new wave of digital technologies – often referred as Deep Tech – is impacting all sectors of the economy. Due to its massive impact in terms of value creation or value re-distribution, it is defined as the 4th industrial revolution by Pr. Klaus Schwab (Founder and Executive Chairman of the World Economic Forum) .

Bitcoin emerged as the first digital international currency. Uber and Telsa have higher market valuation than historic car manufacturers. AirBnB is competing with Hilton and Marriot in terms of valuation. Amazon is transforming and taking the lead on the retail industry. Netflix is doing to the TV industry what Apple did to the music industry few years ago. These are the most known examples of digital disruptions and represents just the top of the iceberg. In fact these unicorns are hiding thousands of new companies that are planning to leverage Deep Tech to challenge established players and to redefine markets.
Corporates are outsourcing their radical and disruptive innovations to start-ups
Although established firms excel at incremental innovation, breakthrough or disruptive innovation projects are rarely successful (too slow, too expansive, not scaling, not radical enough). Therefore, many corporations – afraid to miss out on the 4th industrial revolution – decided to outsource this work to entrepreneurs. In order to do so they invested heavily in corporate venture.

In 2016, the most active Corporate Ventures in the world were Intel Capital and Google Ventures, Salesforce Ventures, Comcast Ventures, Qualcomm Ventures, Cisco Investments, GE Ventures, and Bloomberg Beta.
The Corporate Innovation EcoSystem
In fact, corporations developed more advanced innovation strategy and implement now a complete ecosystem to become more effective at scaling radical and disruptive innovation projects. Corporates want to create more synergies between their digital innovation initiatives and the digital transformation of their core-business.

To ensure that the corporate immune system do not prevent the creation of new successful ventures, firms shall increase the autonomy of the teams working on new digital initiatives. These initiatives mus be managed as individual ventures running like start-up. This organisation model is described by Bain & Company as The Firm of the Future.

Autonomous Innovation team are like a start-up
Start-ups are obsessed by getting market traction for their products and services. They are also continuously seeking confirmation that they are on the right path to succeed. Mastering the art of pivoting is important for entrepreneurs.
Founders understand that in their quest to gain market traction, they have to continually reassess their decisions and so being open to change – as market required – any aspect of their venture: strategy, price /brand positioning, targeted customers, business model, etc.
When it comes to digital innovation (including Deep Tech), entrepreneurs have access to large amount of customer behavioural data. These data play a critical role in helping entrepreneurs to shape the strategy and offering of their venture. This freedom and pragmatic approach enables start-ups to discover new paths to success in uncharted territories.

Deep-tech start-ups need corporations
It would be dishonest to draw a too positive picture of the entrepreneurial world. The success rate of start-ups remains low. 71% of the start-up failed in their first 10 years. It is interesting to see corporations betting their future on Corporate Venture and so on a system with such high failure rate.
BCG ran recently a survey with 400 Deep-Tech start-ups and identified the most important needs for them to support their development. It happens that two of their most important needs – market access and technical expertise – could be answered by corporations.

The corporate start-up studio is a optimised solution for digital disruption
Entrepreneurs and the start-up ecosystem have the right DNA to develop successfully new digital ventures. But on the other hand, when it comes to Deep Tech, corporations have some unique assets that start-ups need.
Corporate Start-up Studio gather the right culture, skills, and assets to develop the successfully new radical digital ventures.

Future Economy Studio offering
The Future Economy Studio is the first start-up studio helping corporations to create and manage autonomous innovation teams.