Guess what? The Fortune 500 is actually very startup-friendly
By Digital News Asia February 2, 2016
- 500 Startups-INSEAD study shows corporate world very engaged with startups
- Large corporations have the financial muscle to cause their own disruptions
CONTRARY to their reputation as being slow, lumbering dinosaurs still trying to get the hang of this startup thing, many of the world’s most successful large corporations are actually actively engaged with the ecosystem and quite plugged in, according to a new study.
In fact, many large corporations are tapping into the disruptions startups are capable of, according to the #500 Corporations: How do the World’s Biggest Companies Deal with the Startup Revolution? report, based on a joint study by Silicon Valley-based 500 Startups and the INSEAD business school.
The study focused on corporate innovation by investigating 500 of the world’s biggest public companies and their practices in terms of what 500 Startups and INSEAD call Corporate Startup Engagement (CSE).
The study found that 68% of the top 100 companies from the Forbes Global 500 are engaging with startups, and the top 100 companies are working with startup two times more intensely than the last 100 companies on the list.
And they’re also a good source of funding: The majority (61.7%) of unicorns – startups with a valuation of US$1 billion or more – listed by The Wall Street Journal under The Billion Dollar Startups Club have raised from money at least one corporate (not including investment firms and banks).
“The ‘dinosaur’ label is catchy, but it ignores the fact that these corporations sit on more cash reserves than most venture capitalists will ever have, and can deploy assets that could cause some serious disruption of their own,” 500 Startups managing partner Khailee Ng said in his foreword to the report.
Indeed, many of the findings from the report would come as no surprise to those who attended the inaugural What’s Next conference organised by Digital News Asia (DNA) last September, where Ng released some preliminary findings under embargo.
Other surprising facts about large corporations and startups:
- Corporations do not invest only in their own vertical: The online music streaming service Spotify raised money from Coca-Cola Co.
- Inhouse R&D (research and development) is giving way to collaboration with new ventures. Nine out of the 10 biggest R&D spenders worldwide are already working with startups.
- Investing in startups is not the only way to collaborate. ProSiebenSat.l Media AG provides advertising time in return for revenue or equity shares through its venture arm, SevenVentures.
- Even non-technology corporations are building startup accelerators to better engage with the ecosystem.
- France, not the United States, has the highest percentage of its top corporations engaging startups: 23 out of 25 top corporations there are working with startups.
The #500 Corporations report also lists eight ways corporations can engage with startups, which it calls the ‘Swiss Army Knife of CSE’:
According to 500 Startups and INSEAD, the #500 Corporations report is aimed at:
- Corporations exploring ways to engage with startups;
- Corporations looking to benchmark their practices; and
- Individuals working in corporations who want to get buy-in from colleagues to embark on a CSE programmes.
To download a copy of the free 51-page report, click here.
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