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The value of corporates working with start-ups

Led 02, 2017

The value of corporates working with start-ups

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Author

Benno Tieke

Benno Tieke

Director, Portfolio and CTO

Benno manages Philips Venture’s extensive portfolio and focuses on open innovation. He’s passionate about developing new partnerships with external start-ups.

Lessons and opportunities from our work with the HighTechXL start-up accelerator

 
This year, the interaction of Philips with start-ups went into true acceleration mode. Earlier in 2016, we announced the partnership with HighTechXL in the Eindhoven Start-up alliance, which boosts the start-up ecosystem in the region. But two events in the past couple of months stand out in particular. At XL Day, I watched proudly as several alumni and new high-tech start-ups of the HighTechXL program took the stage in Eindhoven to pitch their business cases to investors, industry experts and innovation leaders.

 

And then last week we welcomed the 10 finalists of the Philips Innovation Challenge at the High Tech Campus in Eindhoven, organized in collaboration with HighTechXL and Get in the Ring. 

 

XL Day was the culmination of a three-month acceleration program led by the start-up accelerator HighTechXL. Here, a community of high-tech corporates including Philips Research established connections to young hardware entrepreneurs. This year, we were glad to see the fast progress of two of the Medtech companies in the program. The close vicinity and direct contact between the start-ups and Philips shows how well this interaction now works in practice. Earlier this year, we had already finished a similar program with HighTechXL, but then focused on Philips teams driving internal innovations like start-ups with great results. At XL Day, I was delighted to discuss how the previous program has truly accelerated the business impact of our innovation program during an on-stage interview.

Benno Tieke sits on stage for a discussion during XL Day.

Benno Tieke, Director of Business Creation at Philips Research, talks with Anique Soetermeer at HighTechXL.

Then in October, we reached out to start-ups focused on transforming healthcare through the Philips Innovation Challenge. We weren’t sure what to expect, but were overwhelmed by the reactions. More than 90 start-ups applied from all over the world, including the US and Canada, but also Taiwan and South Korea. We had such a hard time selecting the top 10 for the final pitch in the ring that we adapted and decided to invite the top 20 and add a full-day mentor program. During the day, start-up founders met with experts from Philips and HighTechXL in focused mentor sessions to explore the start-up plans and potential collaboration opportunities. It all ended in a great final in the ring with a fantastic winner: CureMetrix
Benno Tieke stands next to two winners holding a sign at the Philips Innovation Challenge 2016.

Looking back at our experiences from these events and the feedback from the participating start-ups, we can identify some key aspects of why the involvement of a large corporate in an accelerator program is beneficial for start-ups.

 

The first element is the deep expertise of the large company — not just in terms of technology, but also in its knowledge of how to create and run businesses in a specific industry. Making this accessible in a flexible mentor format prior to formal agreements is extremely valuable and fits well with the nature of start-up businesses.

 

Other assets valuable for a start-up are access to the network of relevant contacts in the ecosystem or a (digital) platform, such as the HealthSuite Digital Platform, to enable efficient scaling. Obviously in the digital age, start-ups are interested in having access to underlying data, something that obviously needs careful consideration in healthcare.

A close-up of an innovator — Kevin Philips — who was a winner at the Phillips Innovation Challenge.

Kevin Harris — CEO of CureMetrix and one of the winners of the 2016 Philips Innovation Challenge — describes his experience at the challenge finals.

What’s the value for corporates in working with start-ups in an acceleration program?

First of all and most importantly, as a corporate, you get closer to the action and the prospect of meeting with the most disruptive start-ups in the field. This creates opportunities to engage with them at an early stage, which can potentially lead to promising partnership opportunities. The previously mentioned events provided ample opportunities for this, and I am sure we will see a number of collaborations originating from them. 

 

In addition, another tangible advantage is to learn first-hand from the start-up ways of working to create business success out of breakthrough innovations. At Philips Research, we are already reaping the benefits of our collaboration with start-ups in HighTechXL and adopting a start-up way of working in an accelerator program for our internal innovation teams. 

 

Here’s what I consider to be the three most crucial benefits of a start-up acceleration program:

Working alongside other start-ups leads to faster and better insights

Usually, start-ups scale-up alone, without other start-ups. But we found that developing several teams at the same time uncovered valuable insights that we could share across teams. We found the continuous iterations meant we could develop not just the technical innovation for CureMetrix, but the entire business case in just 12 weeks.

External mentors tell it like it is

Sometimes you need an outsider to tell you where you're going wrong, how to fix a problem or even when to give up and move on. During this project, entrepreneurs had access to a group of mentors collectively called the Eindhoven Start-up Alliance, whose members include leaders at ASML and Ernst  and  Young and Philips. Together, we helped many teams become investor-friendly start-ups primed to secure valuable funding. I think the hard truth can save valuable time and money and encourage teams to move on to bigger and better things. 

A dynamic hub is a must

Ideally, you need a dedicated entrepreneurial environment where the high-tech industry can meet and innovate under one roof. HighTechXL has created such a hub on the High Tech Campus in Eindhoven, where it shares the smartest 2km in The Netherlands with more than 140 companies and institutes and some 10,000 researchers, developers and entrepreneurs.

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