CAPE TOWN - Over the past two days The Avenue Conference Centre in the Waterfront hosted the third annual MEST Africa Summit that brought together incredible thought leaders, innovative startups making a real difference and heavyweight corporates.
The final panel discussion on Day 2, ahead of the startup pitch competition, attempted to “crack the corporate code” by discussing incubators, accelerators and the relationship between a startup and corporate.
The panel was moderated by Aaron Fu, Managing Director of MEST and included Christophe Viarnaud, CEO and co-founder of Methys and AfricArena; Munya Chivasa, Head of the Merck Accelerator; Eyram Tawia, CEO of LetiArts a MEST portfolio startup; Otema Yirenkyi, Founder and CEO of NexInnova; Ryno Rijnsburger, CTO of 4Africa Academy at Microsoft; and Priscilla Fasoro, and Associate at Covington.
It is evident that to make a success of their business and scale rapidly, startups need to partner with corporates. They need to be able to walk the line between being a creative and dynamic innovator doing their own thing making a difference in the world, and being a cog in the corporate machine.
Across the world incubators and accelerators, such as MEST, have sprung up in order to aid startups in forging meaningful relationships and partnerships with corporates, sponsors and investors.
“In Africa we are mostly still missing practical platforms connecting startups and investors and corporates, that’s why we launched AfricArena last year,” commented Christophe Viarnaud.
“Programmes like Startupbootcamp Africa are a key cog in the wheel of innovation,” added Zachariah George, co-founder and CIO of Startupbootcamp Africa, “To provide access to market for entrepreneurs that are just beyond the idea stage and facilitating introductions to various of the corporates that we work with.”
The corporate world in Africa has been warming to the inclusion of startups in their business and in today’s times it is not uncommon for large conglomerates to outsource innovation to disruptive startups.
“We have almost 20 000 scientists working on day-to-day problems, but as Merch we see a big benefit in working with startups. We do the science in an amazing way, but the tech part can sometimes be tricky. We see a good connection to be made with many of the startups in the tech field. We started off our accelerator programme because we want to generate new business. If we can get the right kind of partners at the cutting edge of developing in their space, especially startups, it can lead to movement for us,” stated Munya Chivasa.
Otema Yirenkyi agreed with him wholeheartedly, “Working with a startup gives you the vision of the edge of innovation. A startup helps you future-proof yourself.”
The reason why startups and corporates can have such a symbiotic relationship is largely due to the age-old nature of the corporate machine and the way startups view themselves in the world. Startups operate in a different way to corporates and this difference is the ticket to a mutually beneficial working relationship.
“A startup can afford a level of focus to a certain problem. In a corporate environment that becomes increasingly difficult. The bigger the organisations, the more luggage you carry around, the more meetings there are and the more legislation there is. It starts to weigh you down. Corporates can create successful innovation teams, but then they need to be able and willing to afford those teams that necessary level of laser focus. These things can get done, but not all corporates are geared for that. Not all corporates realise that level of focus is incredibly necessary. That’s why they go to startups who can afford this level of laser focus,” said Ryno Rijnsburger.
“I think we are living in an era where centralised organisations are dying,” added Viarnaud, “Innovation is key and you cannot thrive and succeed if all your resources are inhibited from producing great innovation. Companies are going to work as a network of teams and innovators working together, in the future. The ability for corporates to integrate that method of innovation is what is going to make them successful. A corporate wanting great innovation needs to use startups. Challenging boundaries and looking for the next partner is key.”
“I see a lot of rapid evolution in this space,” continued Viarnaud, “In Africa there is a lot of opportunity for this. Corporates can’t innovate without startups in Africa.”
Even though it is vital for corporates to work with startups to enhance internal innovation, the working relationship can sometimes turn sour when expectations aren’t met or when the startup comes face to face with the corporate machine that is so different to everything they represent.
“I’ve seen a lot of failures,” said Viarnaud, “I am now connecting corporates and startups, and I still see a lot of struggle. The weight of the IT infrastructure of large companies, to deal with the new tech of a startup is largely a struggle. It takes a lot of time to integrate. If a company is using an open innovation team, it will work if you give it time. However, if a corporate is using a startup and doing it to be cool but it remains an us-and-them relationship, it won’t work. It needs to be a mutually beneficial partnership. You need to work together.”
The panel continued to dive deeper into what could be the result of a struggle or a failure when connecting startups to corporates.
“Problems between corporates and startups originate from miscommunicated boundaries or a misunderstanding of timelines, effort and integration,” said Priscilla Fasoro, and Eyram Tawia agreed with her.
“Startups are eager to work, but they get disappointed with corporate structures and having to change things,” commented Tawia.
From the discussion it became clear the communication is absolutely key when connecting startups to corporates. As a startup, before working with a corporate, you need to learn to understand the environment they work in so you can overcome the hurdles that will come at you. And this is where the role of the incubator or accelerator is incredibly important.
“You have great entrepreneurs in Africa, which is why I believe the future of innovation is in Africa,” stated Viarnaud, “But they need some training in the corporate world. SBC and MEST have a great role to play in upskilling startups. You sometimes need a facilitator in the startup-corporate conversation.”
When having the conversation about innovation in a corporate world, it should be known that there is a lot to learn from both sides. Startups need to stick to their essence but be willing to be flexible without losing their soul when dealing with a large conglomerate and corporates need to understand that startups are innovative, new and unfamiliar with the corporate concept.
As a reflection on the panel, audience member Rudi Visser, Head of Innovation Acceleration at RCS, said: “For both corporates and startups in our experience, readiness is a two-way street. Be ready to engage with corporates in the way that is required, and while the opportunity is there to challenge the way that things are done to ensure that there’s acceleration, be mindful of what needs to be followed. With that being said, I do think that there’s a new way that is required. It’s not just the corporate way or the startup way, in the coming years there’s going to be a new way of operating to create these solutions that will have impact.”
As parting shots, the panel gave words of advice to both startups and corporates.
“With corporates I’d say you need to be in the innovation domain. This relationship with startups is not just a tactical move. You need to be prepared to work with the selected startups for 2 – 3 years,” was Viarnaud’s statement.
He continued: “Startups also need to go to corporates, because they don’t. They stay in their original business plan and corporates aren’t part of that. Startups need to go and look for corporate endorsement through open innovation challenges which will be an increasingly dominant trend in the coming years”
Viarnaud ended with: “Startups also need to understand that they can be picky. As startups we are always opportunistic, but you need to make sure that it is the right corporate for you, otherwise you might lose your sense of direction and soul.”
“For startups I’d say they need to understand pain points,” added Munya Chivasa, “And on the other hand corporates need to manage expectations.”
Tawia’s two cents were that startups need to align their products to missions and visions of corporates as that’s how they’ll get in.
And Fasoro added that there needs to be creativity on both sides. Startups need to think about what they want besides money because corporates may have lots of money, but they have so much more than that. They have training and resources and if startups utilise this they could be very successful.
“Africa is unique, Africa is different, Africa has huge potential in this space,” concluded Rijnburger.
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