helping other people innovate is good business

Investing in other people’s ventures isn’t just good Karma, it’s also good business practice as doing so opens up new opportunities and this collaboration may even kick start innovation within your own enterprise.

When larger firms help small startups (using vehicles such as Orange Digital Ventures), the advice, partnerships and introductions they can provide are often more valuable than any financial help they provide. It makes a big difference when a big brand helps open up the market for a small startup.

Investors also help with marketing and market research, many even provide office space and most will help tune the business plan to enable fast growth for the new business.

None of this is philanthropic. This is symbiosis.

fast-moving and agile

Smaller firms are fast moving and agile enough to act on opportunities their larger investors may be unable to react to. In exchange for providing the startup with a little muscle, investors gain exposure to new innovation, new industries and new ideas.

Everybody gain a chance to grow, learn and scale, and if a startup succeeds in a big way and becomes a spun-off entity, then all sides stand to benefit from the success. Not to mention the tax breaks offered by most governments to incentivize startup investment.

MapMyFitness is a good example of a startup done good. Launched in 2007 it was in 2015 acquired for $150 million by America’s second largest fitness brand after Nike, Under Armour. The deal was a success, but startup CEO Robert Thurston was also tempted by the synergistic possibilities.

“There are thousands of trainers, physiologists, behaviorists at Under Armour,” Thurston said. “Imagine what happens when they start to design apps and products around user experiences.”

Innovation grows with synergies like this one.

In the past, startups seeking funding would approach banks, venture capitalists and angel investors. Today you can add crowdfunding services, larger enterprises, government funds and innovation networks to that list.

For example, the EU-supported European Innovation Network helps innovative ideas happen. Amongst others, it currently supports Artificial Intelligence Technology, a German company developing autonomous self-learning cranes.

fostering innovation

Collaboration between different organizations is a key driver of innovation, because it allows the mingling of different perspectives.

For example, Orange’s startup accelerator program, Orange Fab works with ten big brands, including Visa, LG and Hilton World to help startups starting up, “this growth process is very much a two-way street,” Orange Fab explains.

“In turn, we get to learn from some of the most resourceful teams in the business how to tackle diverse problems from the ground up.” Take a look at some innovative Orange Fab firms here.

This feedback loop is one of the big benefits to be found in investments in innovative startups.

As an investor, startup, or even a mature enterprise, fostering innovation is critical to modern business.

lessons from gaming industry

Take the gaming industry as an example of what happens when industry change destroys the barriers to entry and shrinks distribution channels even while markets become more price conscious. It was within such an environment the games industry identified ways with which to boost innovation inside any company.

Games developers now focus on constant reinvention within their products to keep audiences engaged; this experimentation isn’t just a chance to try new things, in some products the introduction of new ideas actually becomes part of what keeps audiences there.

You can apply this logic to many products outside of gaming. Indeed, the most successful organizations understand that this journey of constant invention becomes its own reward, characterizing an organization at the cutting edge of its industry.

There’s science to this: MIT researcher, Peter Gloor, has identified ways to identify some of the traits of Collaborative Innovation Networks (COINS). “There’s this new style of engaged leadership where you’re always plugged in,” he explains.

finding synergies

In the end it’s about discovering synergies and ideas from across different industries – and this in turn helps drive innovation within the original enterprise. 

Your fellow investors and startups you’ve worked with become your very own “brains trust”, your own COIN, helping drive future innovation. It leads to better research with greater impact and commercial products with greater potential in the global marketplace.

Naturally there’s an economic consequence. The Global Entrepreneurship and Development Institute (GEDI) claims the UK is the most entrepreneurial country in Europe. Oxford Economics expects London’s digital technology sector will boost the UK economy by £12billion and create 46,000 jobs over the coming decade.

Orange digital ventures

Orange understands the value of innovation and operates numerous schemes to help developers and startup innovators and recently launched Orange Digital Ventures.

Orange Digital Ventures identifies and funds startups in the telecoms and digital sectors, particularly in the communication, connectivity, the cloud, payment, the Internet of Things and big data, e-Health and security services.

It works to “transform far-sighted, talented entrepreneurs into key players in their chosen markets.” Orange calls this approach “open innovation”, a process in which it offers chosen innovators the corporate and financial muscle they need to take their ideas and optimize them to maximum effect, acting as a “growth catalyst”.

Start-ups can get in touch with the teams of Orange Digital Ventures at digitalventures.orange.com.  And do explore our expert blogs and Real Times, our magazine for global decision makers where you can stay tuned to the cutting edge of digital transformation.