corporates – breaking the rules together
Open innovation is a hot topic currently not only in Estonia, but also
worldwide. Large companies are eagerly looking for innovation as the speed at
which technology is disrupting industry by industry is increasing constantly,
and this poses huge challenges for traditional large businesses.
startups brings a considerable innovative leap for companies, as they are able
to source innovative products and services, experiment with new business models
and discover new market needs at a much higher speed than they would have done
How could the startup community and large companies come together to create
even greater value here in the telecommunications industry in Estonia and also
in the Baltics and elsewhere? We caught up with Marju Teras from Startup Wise
Guys to get their insight into this hot topic.
Why do startups and large
companies engage in open innovation?
Startups and corporations
speak different languages, run at different speeds, and serve different
purposes in the Estonian economy but also worldwide. Startups constantly
disrupt, invent new technology, and develop new business models. Established
corporations are more likely to move steadily to protect their financial
security. Large companies tend to hire managers while early-stage companies
employ nothing but explorers.
Still, in the beginning, startups
with their open offices or no offices at all, do not have the power, budget, or
credibility to land big partnerships, win over millions of clients or bargain
great deals. Therefore, for a startup to achieve fast growth, one way is to partner
up with experienced industry experts that might lead to essential investments
and open doors to a large customer base in order to test whether the invention
will bring value to the customer or not. Hence, corporate partnership becomes a
huge boost to startup credibility and makes the time to market much faster.
Corporate partners can also help startups with public relations and branding.
On the other hand, large corporations
in closed offices often lack the flexibility, speed and independence necessary
for startup innovation. So nowadays we see large companies starting to engage actively
with startups for new ideas, shelf-ready technology, fresh talent and a cultural
infusion. And last but not least, to bring home their innovative spirit and
programs – the ‘tool’ for European telcos
to boost innovation
Another trend we see is that more
and more large corporations are starting their own internal “accelerator
programs,” an internal cooperative initiative, designed to help startups grow
over a period of several months. Some companies invest in the exchange of equity, while others
impose commercial preference rights, and some like to sponsor for brand
awareness. Many big-name firms like Disney, Barclays and Nike already have
their own corporate accelerator programs in place, signalling a growing trend
in the business world.
Telecommunications, and especially
IT, are the sectors where innovation happens at a higher speed; therefore,
corporations who want to keep up with this pace must complement their own ideas
with external players, including startups.
Deutsche Telecom, for example,
cooperates with startups on a number of levels. Besides their own accelerator
program hub:raum, they have created a venture capital subsidiary called T-Venture,
which has made over 180 investments, and currently manages a portfolio of
around 80 companies.
Inside hub:raum they develop
new programs in cooperation with other corporations. This year they announced
joint programs such as the Internet of Things (IoT) accelerator called Challenge Up!
in partnership with Cisco and Intel, open to early-stage startups from
Europe, Middle East and Africa. The main objective of this program is to help
startups to go-to-market faster through joint projects, mentoring, high-value
networking and corporate assets. Selected companies may also receive strategic
investments and commercial support for global markets.
And another big player on the
European market, Orange, the large French carrier with 240 million customers,
has its own 3-month accelerator program called Orange Fab. The aim is to
help startups with existing products who are looking for growth and
distribution opportunities. In addition, this year they unveiled a new fund
called Digital Ventures with the aim of financing early-stage tech
businesses. Digital Ventures will start out initially with a budget of
Eesti Telekom's corporate
accelerator program VUNK – the time is right
The Estonian startup scene has
always been innovative and has been producing successful niche tech companies
over the last decade. And now Eesti Telekom (EMT and Elion) in cooperation with
Startup Wise Guys and Garage48 have laid a new cornerstone by creating the
first corporate accelerator program VUNK in the Baltics. Being an essential open innovation practice bringing
together different parties developing new business models, which will hopefully
impact the telecoms industry in general.
In today’s competitive
business environment, external resources is the key to being able to offer the
products and services customers need, and to keep up with competitors. This
initiative is a guiding light to the corporate scene in Estonia, and establishes a new cooperative
mind-set between startups and large corporations.
Being a Telia Estonia startup lab, Vunk has helped companies partner with Telia to improve their offering and get access to the market. Vunk ran an accelerator for 2 years and pivoted to Collaboration framework this Spring.
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