Why is it in the best interest of large corporations to excubate innovation?

excubation project innovation

Should you incubate or excubate your innovation?

1700 times. This 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 1700 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 corporates fail. 19% of innovations are never deployed. And 50% of large companies encounter major difficulties (deadlines, quality, budget...) when implementing an innovative project. 

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

Since its creation in 2019, 321founded's teams have worked with about 15 large corporations in the ideation, execution and success of their innovation project, taking the form of a startup. There are many reasons why corporations turn to startup studios to carry out their innovation process (and thus excubate their project instead of incubating it). Edouard Bouvet, partner at 321founded sheds some light on this.‍

Corporations and innovation

The willingness of the leaders of large groups to innovate is evident

One thing is certain: the leaders of large groups have clearly understood the impact of innovative projects on their results and the dynamism of their business. In addition to this willingness, they have great internal resources to launch new growth paths. As Edouard Bouvet explains: "Like a mammoth, a large group has immense strengths: brand influence, a large customer base, technological advances, available cash, a strong geographic footprint, close-knit teams, proven expertise, etc."

But innovative projects do not succeed when they are conducted internally 

And now go ahead; ask that same mammoth to swoop in and seize every new market opportunity. It can't; it doesn't have the agility, lightness and flexibility to do so. The time constraints of the teams, the budgetary limits, the strategic prioritizations, the lack of availability of the decision makers: all these elements, which also characterize a corporate, slow down the concretization and the development of the new business. As the former head of corporate venture at a French insurance giant, Edouard Bouvet knows this well. He testifies to this inertia, a source of frustration: "Of course, the internal procedures were full of good will, but nothing followed in the execution. The members of the comex were not very available. It was very difficult to bring together the stakeholders. The internal processes were long. Not to mention the political games, which hindered decision-making and prevented any agility."

Incubation initiatives are not efficient enough

To carry out their innovation processes, provoke change and bring out new ideas, some large groups opt for incubation solutions: POCs startups, intrapreneurship programs, labs, etc. "Of course, this promotes acculturation and can sometimes improve certain things internally, but it is never enough," says Edouard Bouvet.
"Ofcourse, this encourages acculturation and can sometimes help improve certain things internally, but it is never enough," says Edouard Bouvet, who points out that good ideas are often present, but that things get stuck when it comes to accelerating and scaling, because this 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: entrust the development of your new business to a startup studio

Large organizations cannot become hyper-agile overnight. It is very difficult, if not impossible, for them to go against everything they have built to reach their level of excellence. Just as the CEO of a ten-person startup doesn't become the CEO of Apple in two days, a large group can't go the other way alone, in a snap of the fingers. It is to solve this squaring of the circle and to create these entities which will benefit from the strength of the mammoth without undergoing its inertia, that 321founded works daily. 

321founded's teams partner with ambitious large companies to co-construct new businesses, maximizing their chances of success. This collaboration relies on the execution know-how of 321founded's team of entrepreneurs and the competitive advantages of large corporations

The strength of the entrepreneurial posture

For Edouard Bouvet, being an entrepreneur means "starting from scratch with agility". Talk to him about entrepreneurship, he will answer "system D, rapid iteration, small budgets, pivot, risk-taking, failure, lack of time, enjoy suffering, pleasure in discomfort". In short, being an entrepreneur is not a job or a function. It is a personality. A vocation! And he knows what he is talking about. Like all partners at 321founded, Edouard is an entrepreneur. He created two companies before joining the startup studio of Patrick Amiel and Romain Ledru-Mathe. Unlike other structures that choose profiles of former consultants, all talents recruited at 321founded are serial entrepreneurs. This pragmatism explains the DNA of the startup studio strongly turned towards the operational, the turnover and the hyper growth; which is a strong argument for the leaders of big groups who hesitate to take the step of excubation.

Startup studios, time to market gas pedal

The relationship to time and the constraints of a large group are not the same as those of a startup. " An efficient go-to-market implies market-timing and the ability to adapt," explains Edouard Bouvet. This is something that large groups do not have, as they suffer from extremely slow decision making processes and countless steering committees. In other words, this inertia penalizes their time to market. " By the time the step is about to be taken, the market has already moved and it's 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 spending valuable time in internal validation processes. Large innovation projects need to develop outside the company, on their own. " You have to let them crash, pivot, and find themselves without impacting the core business" continues Edouard Bouvet.

He illustrates his words with the current collaboration led by 321founded with a large banking group. The latter called upon the Parisian startup studio to excubate a large-scale innovative project. This excubation approach is strategic: the corporate was confronted with the strict regulations of the banking sector and its risk-taking capacities were extremely limited. "Our collaboration allowed us to remove layers of heaviness and to get straight to the point in the realization of the project. says Edouard Bouvet. 

Attracting the best CEOs: the power of 321founded

In addition to this entrepreneurial mindset, large corporations are attracted by the ability of startup studios to quickly mobilize the best profiles to work on and lead the innovative projects launched. This ability to attract the best entrepreneurs and then place them at the head of the startups created is an undeniable asset that weighs in favor of the excubation of innovation. 

Protect your reputation and preserve your brand image

Finally, by entrusting the execution of its innovation to a startup studio, the company minimizes the risk of damaging its reputation. By excubating its new project, the corpo takes less risk of damaging its brand image if the project does not work. " The corpo is less in the spotlight when it entrusts its project to an external entity," says Edouard Bouvet. 

Do you have a project?

Let's talk about it!

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Patrick Amiel
Cofounder & Managing partner
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Romain Ledru-Mathe
Cofounder & Managing partner
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We've created a new hybrid entrepreneurship model that creates startups that combine the strengths of large companies with the execution power of entrepreneurs. It's the 321founded method.
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