Why do large groups have every interest in excubing innovation?

Should you incubate or excubate your innovation?

1700 times. It is, according to the Harvard Business Review, the theoretical differential in the probability of success of a startup launched by a corporate vs an independent startup.

In other words, a corporate is 1,700 times more likely to create a unicorn than an entrepreneur with his startup. And yet, the facts prove the opposite: 2/3 of new initiatives led by corporations fail. 19% of innovations are never deployed. And 50% of large groups encounter major difficulties (deadlines, quality, budget, etc.) when setting up an innovative project.

How can we understand this gap between theory and reality among large groups? Why are the success stories of innovative, profitable, high-growth, and highly valued corporate startups so rare?

Since its creation in 2019, the 321founded teams have worked with fifteen major groups in the ideation, execution and success of their innovation project, taking the form of a startup. The reasons that push corporations to turn to startup studios to carry out their innovation process successfully (and therefore to excubate their project instead of incubating it) are multiple. Edouard Bouvet, partner at 321founded enlightens us.‍

Corporates and innovation

The desire to innovate on the part of managers of large groups is obvious.

One thing is certain: the managers of large groups have fully understood the impact of innovative projects on their results and the dynamism of their business. In addition to this desire, they have very good internal resources to launch new growth paths. SMEs and CAC 40 companies indeed have golden assets, as Edouard Bouvet explains: “Like a mammoth, a large group has immense strengths: brand influence, extensive customer base, technological advances, cash available, strong geographical footprint, close-knit teams, proven expertise, etc.”

But innovative projects don't succeed when they are carried out internally.

And now go for it; ask that same mammoth to swiftly sneak in to seize every new market opportunity. It is impossible, it does not have the agility, lightness and flexibility to achieve it. Team time constraints, budgetary limits, strategic priorities, the lack of availability of decision-makers: all these elements, which also characterize a corporate, hinder the realization and development of the new business. And as a former head of corporate venture within a French insurance juggernaut, Edouard Bouvet knows this well. It testifies to this inertia, which is a source of frustration: “Of course, the internal procedures were full of goodwill, but in the execution nothing followed. Comex members were not very available. It was very difficult to bring stakeholders together. The internal procedures were long. Not to mention political games, which hampered decision-making and prevented agility.”
‍

Incubation initiatives are not efficient enough

To successfully carry out their innovation processes, cause change and bring out new ideas, some large groups opt for incubation solutions: startup POCs, intrapreneurship programs, labs, etc.
”Of course, this promotes acculturation and can sometimes make it possible to improve certain things internally, but it is never enough.” testifies Edouard Bouvet, specifying that good ideas are often there but that things get stuck when it comes to accelerating and scaling because it is not in the DNA of large groups. “It's not the same job to start a company from scratch and to be a leader who launches new products” continues the partner at 321founded.

Excuber: entrusting the development of your new business to a startup studio

Large organizations can't become hyper-agile overnight. For them, it is very difficult, if not impossible, to go against everything they have built to reach their level of excellence. Since the CEO of a startup of ten people does not become Apple CEO in two days, a large group cannot do the opposite alone, in a snap of the fingers. It is good to solve this squaring of the circle and create these entities that will benefit from the strength of the mammoth without undergoing its inertia, that 321founded works on a daily basis.

The 321founded teams partner with large ambitious companies, to co-build new businesses, while maximizing their chances of success. This collaboration is based on the execution know-how of the 321founded team of entrepreneurs and on competitive advantages. Major groups.

The strength of the entrepreneurial posture

For Edouard Bouvet, being an entrepreneur is”like to start from scratch with agility”. Talk to him about entrepreneurship, he will answer you”system D, rapid iteration, small budgets, pivot, risk taking, risk taking, failure, lack of time, enjoying suffering, pleasure in discomfort”. In short, being an entrepreneur is not a job or a function. It's a personality. A vocation! And he knows what he's talking about. Like all the partners at 321founded, Edouard is an entrepreneur. He set up two companies before joining the startup studio of Patrick Amiel and Romain Ledru-Mathe. Unlike other structures that choose the profiles of former consultants, all the talents recruited at 321founded are serial entrepreneurs. This pragmatism explains the DNA of the startup studio, which is strongly oriented towards operations, turnover and hypergrowth; which is a strong argument for managers of large groups who are hesitant to take the plunge of excubation.

Startup studios, accelerator of time to market

The relationship to time and the constraints of a large group are not the same as those of a startup. “However, an effective go-to-market requires market-timing and the ability to adapt” explains Edouard Bouvet. This is something that large groups do not have, which suffer from extremely slow decision-making processes marked by innumerable steering committees. In other words, This inertia penalizes their time to market. “When the plunge is about to be taken, the market has already moved and it is too late..

Startup studio and large group: co-creation and co-responsibility

By collaborating with 321founded, large groups can test ideas with high uncertainty while avoiding devoting precious time to internal validation processes. Major innovation projects need develop outside the company, independently. “You have to let them crash, pivot, find themselves without impacting the core business” continues Edouard Bouvet.

He illustrates his words with the current collaboration led by 321founded with a major banking group. The latter called on the Parisian startup studio to excubate a large-scale innovative project. This excubation approach is strategic: the corporate sector was confronted with the strict regulations of the banking sector and its risk-taking capacities were extremely limited. “Our collaboration made it possible to remove layers of burden and to get straight to the point in carrying out the project.” rejoices Edouard Bouvet.

Attracting the best CEOs: the power of attraction of 321founded

In addition to this entrepreneurial mindset, large groups are seduced by the ability of startup studios to mobilise the best profiles very quickly to work and take the lead in the innovative projects launched. This ability to attracting the best entrepreneurs then placing them at the head of the start-ups created is an undeniable asset that weighs in favor of the excubation of innovation.

Protecting your reputation and maintaining your brand image

Finally, by entrusting the execution of its innovation to a startup studio, the corporation minimizes the risk of its reputation. By excluding its new project, the corporation is in fact taking less risk of damaging its brand image if the project does not work. “The body is less in the spotlight when it entrusts its project to an external entity.” specifies Edouard Bouvet.