Why are startups essential to innovation?
In an ever-changing economic environment, companies need to innovate quickly to stay competitive. Startups, thanks to their agility and their ability to detect and respond quickly to needs are positioning themselves as key strategic partners. Often pioneers in the adoption of new technologies, they are quick to experiment with innovative solutions and bring them to market before their more established competitors. Their approach, focused on the development of Minimum Viable Products (MVP) enables full-scale testing of concepts while reducing the risks and costs associated with innovation projects. This combination of technological daring and flexibility makes startups particularly attractive to large corporations looking to accelerate their innovation cycles and gain access to differentiating solutions (Reichman & Simpson, 2016; Chesbrough, 2024).
How to source startups through Open Innovation?
However, finding promising startups is a complex task, as these young companies evolve rapidly, are frequently born and disappear, and are not always visible to established players. Their short life cycles and sectoral diversity make them particularly difficult to identify and monitor. for companies (De Groote & Backmann, 2020).
Scouting or sourcing in innovation ecosystems
Scouting, intelligence or sourcing teams, integrated into certain large groups actively monitor innovation ecosystems, such as incubators, gas pedals, competitiveness clusters and technology hubs, which play a key role in the maturing of startups. These ecosystems provide a structured framework for young companies, while facilitating their networking with investors, experts and industrial partners. By integrating investors into this network, scouts have additional leverage to identify promising opportunities and assess the financial credibility of startups. However, even for a large group, monitoring these ecosystems has significant limitations: their coverage remains partial, relationships are not always kept active, and not all startups necessarily integrate these formal structures, making some nuggets difficult to identify (Cunha et al., 2023).
Innovation competitions and challenges: limited visibility for startups
Open competitions and challenges enable major corporations to attract startups around specific issues. These initiatives, which are often widely publicized, provide an opportunity to test ideas or technologies in a structured setting. However, they also have their drawbacks:
- Lack of visibility for startups: Not all challenges succeed in reaching the most relevant startups. Young companies, often focused on product development, may lack the information or time to apply (Verteramo et al., 2024).
- Lack of resources : Taking part in a competition requires resources (time, team, file preparation), which not all startups can afford, especially if they're in the early stages.
These limitations reduce the effectiveness of this method in capturing the full innovative potential of startups.
Search engines: powerful tools but data-dependent
Specialized search engines, which are based on the latest structured or crowdsourced databasesoffer a technological solution for identifying startups based on a range of criteria (sector, location, financing, etc.). However, their effectiveness depends on the quality and updating of the data used:
- Specialized databases : Maintained by private or public players, these databases can be rich but are often limited by their geographical or sectoral coverage (Reichman & Simpson, 2016).
- Crowdsourced databases : Although more extensive, these databases rely on external contributions and sometimes suffer from a lack of reliability or obsolete data.
- Update problems : In an environment where startups emerge and disappear rapidly, keeping databases up to date is a constant challenge. Out-of-date or incomplete information can hamper the relevance of searches (Tomita, 2022).
While useful, these tools often require additional effort to cross-check results with other sources and verify their relevance.
The challenges of collaboration between startups and major corporations
Collaborations between startups and major corporations, while rich in potential, present major challenges that need to be addressed to ensure their success. One of the first obstacles is related to differences in culture and work pace. Large companies operate with structured processes, established hierarchies and often long decision-making cycles. Startups, on the other hand, operate in an agile environment, where decisions are made quickly, and then tested, failed and adjusted on an ongoing basis. This divergence can lead to misunderstandings and slow down the effectiveness of collaborations. (De Groote & Backmann, 2020).
Another challenge lies in the intellectual property management. Collaborations require the sharing of knowledge and technologies, but the fear of losing control of their innovation pushes some startups to remain on the defensive. For their part, large corporations, anxious to protect their assets and investments, may impose constraints that limit the exchange of information. This situation can create a of mistrust and hinder common progress (Reichman & Simpson, 2016).
Aligning objectives is also a major challenge. Start-ups generally seek to quickly prove the viability of their solutions, in order to attract investors or expand their business. In contrast, large corporations often pursue long-term strategic objectives, integrating new solutions into existing processes or exploring high-potential markets. If visions and priorities are not clearly aligned from the outset, the two parties run the risk of heading in divergent directions.
Finally, the bureaucracy and internal processes of large corporations are a further hindrance. Startups, accustomed to operating in a flexible environment, may come up against the administrative requirements and approval times that are often lengthy in large corporations. This can discourage young structures and limit their ability to become effectively involved in collaborative projects.
These challenges underscore how crucial it is to identify the right candidates before initiating a collaboration. To avoid wasting time and money resourcesFor both large companies and startups, it is essential to select partners who share a common vision, are ready to overcome cultural and organizational obstacles, and have a technology or solution adapted to the needs of the large group.
A rigorous, methodical approach, backed up by the latest tools like ideXlabcan facilitate this selection process, maximizing the chances of success and transforming these collaborations into genuine drivers of innovation.
ideXlab: Facilitating startup scouting
To overcome these limitations, solutions such as ideXlab by aggregating information from multiple sources and exploiting the latest advanced tools such as artificial intelligence and search algorithms. The platform enables :
- Aggregation of diversified data : ideXlab centralizes data from patents, news, scientific publications, public databases and the open web. This makes it possible to cross-reference information and identify startups even if they don't appear in a single database.
- Detecting university spin-offs: Drawing on academic networks, ideXlab identifies startups emerging from research laboratories, often invisible in traditional databases.
- Constant updating : The platform is designed to continuously integrate and update information, reducing the risks associated with obsolete data.
- Fast, in-depth exploration: Advanced algorithms can map a sector in a matter of days, identifying emerging players while assessing their relevance to specific projects.
By combining these features, ideXlab offers a complete and effective solution for identifying relevant startups and avoiding missing out on potential partners.
Thanks to its ability to integrate a variety of data and facilitate its exploitation, the platform helps companies overcome the traditional obstacles of scouting and innovation challenges.
Case studies
Search for startups in advanced materials
A global industrial company specializing in innovative materials sought to identify startups developing promising solutions to improve the performance of its products while meeting environmental constraints.
1. Understanding the need and initial exploration
In less than 48 hours, the ideXlab platform enabled us to take stock of emerging technologies in the advanced materials sector, thanks to an in-depth analysis of patents, scientific publications and industry news. This phase identified the main technological trends, as well as areas of research likely to be of interest to the manufacturer.
2. Mapping startups and innovations
Thanks to its intelligent exploration engine, ideXlab identified around ten startups active in the development of innovative materials to meet customer requirements. These solutions covered a wide range of aspects, from improving the strength and lightness of materials to reducing the ecological impact of their manufacture.
3. Identification of experts and qualification of solutions
To deepen the evaluation, ideXlab mobilized international experts specialized in composite materials and nanotechnologies. These experts assessed the technological maturity of the solutions identified, based on criteria such as Technology Readiness Level (TRL)performance and implementation opportunities.
4. Summary and usable results
In just two weeks, ideXlab provided the manufacturer with a structured report including a shortlist of the five most promising startups. These companies had demonstrated convincing results through functional prototypes (MVP) or initial proofs of concept (PoC), making their integration into a collaborative project conceivable in the short term.
5-day due diligence on biocolorants
In addition to identifying startups, it is sometimes necessary to carry out technological due diligence to assess technological risks. In the following case, a deep-tech startup specializing in biocolorants, using innovative, environmentally-friendly processes, was evaluated thanks to ideXlab.
- Understanding the context : Over a two-day period, ideXlab helped us to understand the fundamentals of the technology and its context, through interviews with the startup's CTO and scientific committee. At the same time, the platform generated a structured bibliography based on publications and patents, identifying technological opportunities and risks.
- Identification of experts : In the first stage, ideXlab identified and interviewed experts worldwide to validate the industrial and commercial feasibility of the technology.
- Summary : In just five days, the project produced a clear assessment, enabling the investor to make an informed decision.
Conclusion
Identifying and collaborating with startups represents a strategic lever for major corporations wishing to accelerate their innovation through agile solutions such as MVPs. However, the volatility of startups, their limited visibility and organizational challenges make this a complex process. Platforms such as ideXlab facilitate this process by aggregating a variety of data (patents, publications, experts) and offering a structured view of opportunities. To be successful, major groups need to adopt a global approach to their business.Open Innovation by also involving other key partners such as academic laboratories, SMEs, ETIs and local ecosystems.
References :
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- Bertin Clarice, Schaeffer Véronique. Local Ecosystem open innovation Intermediaries as Key Enablers for the Development of Incumbents' Digital Technology Partnerships. 2022 IEEE 28th International Conference on Engineering Technology and Innovation (ICE ITMC) & 31st International Association For Management of Technol, 2022
- Chesbrough Henry. open innovation in Large Companies. The Oxford Handbook of Open Innovation, 2024
- Corvello Vincenzo, Ammirato Salvatore, Felicetti Alberto, Troise Ciro, Ključnikov Aleksandr. The rules of courtship: What drives a start-up to collaborate with a large company?". Technological Forecasting and Social Change, 2024
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- De Groote Julia Katharina, Backmann Julia. initiating open innovation collaborations between incumbents and startups how can david and goliath get along. International Journal of Innovation Management, 2020
- Jackson Paul, Richter Nancy. SITUATIONAL LOGIC: AN ANALYSIS OF open innovation USING CORPORATE ACCELERATORS. International Journal of Innovation Management, 2017
- Quaiser Raunaque Mujeeb, Srivastava Praveen Ranjan. Outbound open innovation effectiveness measurement between big organizations and startups using Fuzzy MCDM. Management Decision, 2024
- Reichman Melvin, Simpson Peter B.. open innovation in early drug discovery: Roadmaps and roadblocks. Drug Discovery Today, 2016
- Shahzileh Zahra Honarmand, Aghdasi Mohammad, Albadvi Amir. Collaboration of an Established Company with startups: A Funnel-Shaped Framework. EAI Springer Innovations in Communication and Computing, 2023
- Tomita Kenji. open innovation and drug discovery startups in Japan: The importance of communication in licensing. Asia Pacific Management Review, 2022
- Verteramo Saverino, Raffaele Deborah, Corvello Vincenzo. Organizing an innovation Ecosystem by Integrating Customers and start-ups: The NTT-Data open innovation Contest Case. Springer Proceedings in Complexity, 2024
The ideXlab open innovation platform is aimed at all innovative companies, whatever their sector or size, seeking to optimize their innovation and technological performance. In particular, it is aimed at R&D, innovation, technology watch and new product and service development and purchasing teams. Users may be engineers, scientists, innovation project managers, buyers of new technologies or strategic decision-makers.