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Startup Accelerators


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The talk was given by Preeti Anand, Head of Engineering Excellence Practice at Zinnov, at #ZinnovConfluence - Santa Clara on March 8, 2017.

Published in: Technology
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Startup Accelerators

  1. 1. Start-up Accelerator March 2017
  3. 3. VALUE CHAINS HAVE BEEN BROKEN DOWN INTO MICROSEGMENTS – FROM AUTOMOTIVE…. 3 $ 60 Mn INFOTAINMENT BATTERY TECH SAFETY & SECURITY AI & COMPUTER VISION ADAS POWERTRAIN AFTERMARKET INFRASTRUCTURE DATA PLAYERS OEMS CONNECTED CAR $ 18 Mn $ 50 Mn $ 28 Mn $ 558 Mn $ 41 Mn $ 183 Mn $ 10 Mn $ 2185 Mn $ 372 Mn $ 3400 Mn $ 152 Mn LIDAR & RADAR Electric Autonomous Gas EV Charging Parking Solutions Alternative Vertical Start-ups that includes Ridesharing and other services (Legal, Financial, Media) for the Automotive Industry has received close to $ 34 Bn Funding XX Total Funding in Technology Area Source: Global Engineering Insights Platform (
  4. 4. …TO RETAIL 4 Source: Global Engineering Insights Platform ( Retail Value Chain Supply chain & Logistics MerchandisingPlanning Online/Offline Store Operations Marketing Customer Experience Assortment Management Category Management Pricing and campaign management Markdown and Discount Management Product Recommendation Engine Loyalty and Rewards Management Customer Relationship Management Customer Feedback Management Real Estate Planning Sales Planning and Forecasting Space Planning Merchandise Financial Planning Pricing and Promotions Optimization POS Store Automation Fraud Detection In-store Inventory Tracking Indoor Mapping Robotic Assistance Smart Dressing Rooms Workforce Optimization and Management Inventory Management Proximity Marketing In-Store marketing Location Analytics Product Targeting Warehouse Management Last Mile Logistics Transportation Management Supplier Management Shipment Tracking Clustering and profiling Visual Search Engines Customer Behaviour Analytics Planogram Design In-Store Navigation Robotic Disruptors IoT Disruptors Big Data Analytics Disruptors AI Disruptors Loss Prevention
  5. 5. AND ENTERPRISE INFRASTRUCTURE AS WELL 5 Source: Global Engineering Insights Platform ( Hyper-Converged Infrastructure Servers/ Compute Storage Network Hyper-virtual Software-defined Storage Software-defined Network Hyper-scale Storage Management Routing Virtual Solid State Drives Switching Small Scale All-flash arrays RAN Hybrid Storage Wireless Infrastructure NVRAM Network Management & Analytics Storage Area Network Virtual Private Network Network attached Storage Application Delivery Network Server-side Caching Wide Area Network Back-up Network Management Optical Storage OSS & BSS Transport Backhaul Virtual Overlay Networks Software-defined Storage Hyper-Converged Infrastructure Hybrid Storage All-flash Arrays Software-defined Network Wireless Area Network
  6. 6. 6 Tech Startup Ecosystem is evolving rapidly in key geographies 6 Investment firms – VC, PE, Angel funds, Corporate Venture arms Industry associations, govt. sponsored associations Govt. sponsored initiatives to improve access to funds, better IP protection, ease of doing business etc. Techdriven ProductStart-ups United States United Kingdom India Israel China 52,000 – 53,000 4,900 – 5,200 4,700 – 4,900 4,500 – 4,600 4,200 – 4,300 Private and public incubators, accelerators Partnerships between corporate and startups Startup Ecosystem constituents 1 2 3 4 5
  7. 7. The mushrooming startup ecosystem provides opportunities for companies to find unique engagement models with the relevant startups 7 Maturity of partnership ValueContribution • Portion of start-up’s equity with a high rate of return • High visibility as a technology leader investing in the top cos. of the future High Low High • Visibility to the start- up ecosystem • Exposure to new technologies • Platform Evangelization • Access to new technologies • Equity from the start-up company • Access to new technologies Tactical Engagements Strategic Collaboration Accelerator Incubator Strategic partnerships, M&A 360-degree relationships with select few mature start-ups aligned to strategic interests Invest in select start-ups with high potential to impact their market or industry Nurture the start-up ecosystem by engaging with a large pool of nascent stage start-ups Evangelize products or gain technology from the start-up ecosystem with low investment
  8. 8. DO I NEED TO SETUP AN ACCELERATOR / INCUBATORWHY Organizations need to establish a well defined purpose with clear expectations on the outcome and a set of metrics to measure success. ? 8
  9. 9. 9 There are typically 3 degrees of value that corporates derive from engaging with startups – Branding/Talent, Innovation and Business Impact Business Impact Direct impact on business outcomes including revenues Co-Innovation Promoting innovation around products & services, within and outside the organization Branding & Talent Sourcing Enhancing branding in ecosystem and attracting quality talent M&A, Investment Opportunities Joint go-to-market Acquihire Building new products & services around existing ones, increasing adoption Promoting intrapreneurship and innovation within organization Branding as an innovation- focused company Attracting quality talent 1 2 3 Success Stories • Microsoft Ventures made strategic investment in SkyGiraffe – a platform to extend enterprise systems to mobile devices – which graduated from Microsoft Ventures Accelerator in Israel • Microsoft Ventures has also done seed stage investment in startups like Ranku, an online education discovery engine and Zula, a mobile productivity startup • Target has signed vendor agreements with startups like Konotor & MuHive that graduated from Accelerator Program • Konotor’s app. allows Target store managers to communicate with HQ on product queries, pictures of stock outs can be uploaded and sent etc. • MuHive’s platform fits with Target’s “Express” store format which is used as delivery centers for orders placed on the e-commerce site. The platform connects social feeds with Target’s CRM software Benefits of start-up engagement
  10. 10. THREATS Identify threats/business model disruptors PLATFORM Cloud, Security, CRM ADJACENCY Complimentary products INVESTMENT Equity CULTURE HACK Agile, Lean, Fun TECH THEME IOT, Analytics, Big-Data, Mobile Accelerators/Incubators serve a variety of purposes – ranging from ‘technology adoption platforms for MNCs’ to ‘investment tools for venture capitalists’. ACCELERATORS & INCUBATORS Fast-tracking Growth Source: Zinnov Research 10
  11. 11. Large corporates across the world have been able to leverage their start-up accelerators to create significant business value proposition Corporate accelerators or their venture arms are looking to create/offer new solutions in partnership with start-ups • Target has signed vendor agreements with startups like Konotor & MuHive that graduated from Accelerator Program • Konotor’s app. allows Target store managers to communicate with HQ on product queries, pictures of stock outs can be uploaded and sent etc. • MuHive’s platform fits with Target’s “Express” store format which is used as delivery centers for orders placed on the e- commerce site. The platform connects social feeds with Target’s CRM software • PayPal acquired Braintree (London), a payments integration solution provider. PayPal partnered with Braintree to launch Start Tank London Accelerator • Kobster, a graduate of Paypal StartTank, is a B2B e-commerce Web portal that provides bulk office supplies at wholesale rates and received seed funding • GenNext Ventures has invested in startups like Covacsis – real time analytics platform and Videonetics – video surveillance technology maker • GenNext Ventures partnered with Ecorithm to optimize the energy efficiency of the buildings and raise the standard of environment design • Microsoft Ventures made strategic investment in SkyGiraffe – a platform to extend enterprise systems to mobile devices – which graduated from Microsoft Ventures Accelerator in Israel • Microsoft Ventures has also done seed stage investment in startups like Ranku, an online education discovery engine and Zula, a mobile productivity startup
  12. 12. 83 Graduates 76% Funded $ 1.08 Mn Avg. Follow-On Funding Start-up Description When they joined Accelerator Key Achievement at the Accelerator AppVirality is a plug-and-play growth hacking toolkit for mobile applications Young tech team with interesting idea in the organic growth space Launched beta, then in private with 180 apps signed up- 2014 Mobile app vulnerability detection and security certification Beta product; 50 developers Public launch; Go-to-market plan; 5 paying customers, 15 more in pipeline; 150 developers-2014 provides a personal shopping platform based on the customer’s style preferences and body type. Intelligent layer for e-commerce, beta launched Launched beta site, reached 100 orders per day, raised seed is a DevOps automation platform for modern environments comprised of containers, clouds, and microservices. GTM formulated, partnership with Microsoft for integration with the Azure platform InTouchApp is a contact management solution that enables users to store, manage, and view contact information using any mobile and from any place. Cross platform contact management with good traction achieved Crisper GTM strategy, improved app design, achieved over 1M downloads, looking to raise seed Case Study: Microsoft has successfully leverage the accelerator model globally evangelize its platform offerings
  13. 13. HOW TO GET AN ACCELERATOR / INCUBATOR UP AND GOING ? 13 Define the structure of the engagement model DESIGN PHASE Steps to set up the accelerator SETUP PHASE Run the accelerator end to end OPERATIONS PHASE Measure the success of the accelerator program through various metrics EVALUATION PHASE Initial due-diligence to understand the landscape PRE - DESIGN PHASE
  14. 14. 14 Zinnov offers an integrated program for designing and operating the start-up accelerator 01 Accelerator Design The accelerator offering covers modules from design to ecosystem connects to ensure that the start-ups onboarded are provided with all the tools required to deliver a successful solution for the corporate 01 Accelerator Design The design activities include charting out the accelerator vision, focus, charter, engagement model and lifecycle. The activities also call out the roles and responsibilities of various stakeholders involved End-to-end program management of the accelerator bringing together the industry expertise that Zinnov has gained. The PMO team will work with the accelerator lead and another team mate to ensure smooth operations As per this module, Zinnov will design and deliver a curriculum that will be help the start-ups gain good business and technology understanding and shape their products to suit the market needs This constitutes start-up scan to identify relevant start-ups as well as creation of a business strategy for the start-ups in the cohort Zinnov will help create and foster SME – Start-Up connects that will help start-ups gain good domain vertical understanding as well as horizontal skills that will help them scale business 02 Program Management 03 Curriculum Design and Delivery 04 Business Consulting 05 SME Connect 01 Accelerator Design
  15. 15. 01 – Accelerator Design • Create a charter which would outline the intent of setting up the accelerator • Defining focus areas which would enable selection of start-ups with high level of business alignment to the client • Multi-tiered governance structure to ensure smooth and quick decision making • Articulation of KRA – roles and responsibilities and expectations Design a program for start-ups constituting boot camp, weekly learning sessions (business model canvas), live lectures, case studies, and group assignments. • Help explore adequate legal safeguards to avoid IP infringement and other issues • Recommend infrastructure to ensure smooth functioning of the accelerator A governance council to make key decisions for the accelerator program Organization Structure Structured curriculum for start-ups through the duration of the program Curriculum design Accelerator engagement model with the start-up Legal, Tax and Facility advisory Charter and Focus Areas Articulation of Charter and Focus Area Accelerator design
  16. 16. 02 – Program Management Launch Preparation • Marketing strategy and plan social media and launch events • Marketing material design and press conference Post-Launch • Continuous social media updates • Publicity at identified events and forums Application Processing • Multi-stage application evaluation process to identify the most suitable set of start-ups for the accelerator On- Boarding • Activities including contract signature, background verification, onboarding boot-camp etc. Operations • Day to day operations which include running curriculums, mentoring, weekly and monthly reviews concluded by demo day Post Program • Post program feedback collection and engaging with alumni network This phase constitutes end to end management of all activities such as program launch, application processing, on-boarding, day to day operations and post program activities
  17. 17. 03 – Curriculum Design and Delivery Boot Camp Achieve Product Market Fit Build Sustainable Revenue Model Make Money How To Scale And Get Funded The curriculum would cover the following themes to help startups move up the growth trajectory • Identify the target segment and their needs • Define value proposition and product features based on market and compete analysis • Identify how customers pay • Map payment flow • Define revenue model and pricing hypothesis • Test the hypothesis • Define buying process • Identify the sales and marketing channels • Determine sales/ marketing spend and business viability • Assist startups with the art of storytelling • Streamline startup pitch and make startups investor ready for Demo Day • Learn the art of rapid prototyping • Startup will design a prototype and test it with customers and industry experts Cohort Commencement Demo Day Zinnov will design and deliver an intense classroom based and instructor led curriculum . The curriculum would imbibe the best practices across various courses, and would be tailored to the cohort needs
  18. 18. 04 – Business Consulting Customer Use Cases Prioritized list of use cases, market segmentation and target industries with value chain map for each idea Market Size Addressable and addressed market size with forecasts by use-case, target industry and geography for each idea 1 2 3 4 Competitors Prioritized list of key competitors, substitutes, disruptors and their offerings for each use-case of each idea Key Feature Insights Prioritized differentiation areas and hygiene features for each idea Prioritized list of required GTM partnerships – Channel partners, Implementation partners etc. Revenue Model Pricing model, promotional requirements – demos, free trial etc. for use cases and target customers Partnerships5 6 This constitutes of: • Start-up scan to identify relevant start-ups, and • Detailed assessment to design business strategy
  19. 19. 05 – SME Connect Zinnov has an extensive network of SMEs from across industry verticals and functional horizontals which can help start-ups with their business and can also provide sector specific insights. As a part of the engagement, SMEs will take sessions with start-ups to help them gain deeper understanding of the industry as well as the functions Marketing Business Plan Design HR Business Communications RetailAutoFin-Tech Enterprise N/W Solutions Horizontal SMEs Vertical SMEs Start-ups/innovation teams Energy
  20. 20. Zinnov offers varying engagement models to drive start-up engagements Dedicated corporate accelerator with external or internal innovation ecosystem External Innovation Pod • Sponsorship for entire program • High level of support of internal teams including marketing, HR, legal, procurement, etc. • Technical mentorship and access to customer • End-to-end execution from design to complete operations including curriculum delivery, business strategy and SME Connect • Complete ownership of the model • Higher control over business outcomes • High internal and external visibility and branding What corporates provide? What Zinnov would offer? Benefits 1 Corporates can sponsor one or more start-ups to drive innovation without setting up a dedicated accelerator Collaborative Innovation Pod • Sponsorship for start-ups of interest (could start with even 1 -2 start-ups) only • Technical mentorship • Access to customer base • End-to-end execution including curriculum delivery, business strategy and SME Connect • Any legal, HR, procurement support related to accelerator • Limited financial commitment • Lower management bandwidth and oversight required • Lower exposure– IP security, IT network related concerns etc. What corporates provide? What Zinnov would offer? Benefits 2 Business mentorship and business consulting for internal innovation teams of corporates Internal Disruptor Pod • Sponsorship for entire program • Low level of support of internal teams including marketing, HR, legal, procurement, etc. • Technical mentorship and access to customer • Curriculum delivery, business strategy and SME Connect • Internal teams gain understanding of business context and key design and market principles • Well defined market strategy for the innovation idea • Retention strategy for high performing and high potential employees What corporates provide? What Zinnov would offer? Benefits 3
  21. 21. Key elements of a successful accelerator 1.A closely knit program where start-ups are given enough mentoring and guidance but given enough space to make critical decisions for their roadmap 1.A curriculum that provides for customization for every start-up depending on the type of support they seek from the corporate 1.Access to technology thought leaders – guidance and mentoring to enhance technology platforms and build robust systems 1.Exposure to business frameworks and tools and business mentoring for start-ups to design and operationalize a realistic game plan 1.Domain advisory and viewpoints from end customers to help start-ups shape their solutions to be more market ready 1.Infrastructure and platform to test and pilot their products 1.Exposure to the ecosystem – connect with the wider start-ups, accelerator and VC community to tap into their expertise Guidance on how to manage their non-core functions like legal, finance, HR etc.
  22. 22. Why do startup accelerators fail? In-house Resource Drain Lack of Data Ecosystem Incorrect Data – Market Fit Lack of Innovative Accelerator Business Models Unstructured Program Management Wrong Quality Metric Identification Lack of accurate strategic goals  Non optimum person power/ resources employed in accelerator BU  Inexperienced Management without high- touch startup support  Inability to identify right startup due to lack of data  Statistically, will not be able to hit the jackpot startup  Insufficient Data will lead to skewed startup identification  With enough data too, correct insights will have to be generated  No resources to conduct rigorous benchmark analysis  Competitor analysis is needed for strategy formation  Lack of coordination between stakeholders  Appropriate Metrics for Talent Identification needed  Inappropriate Talent Identification will lead to wrong startup investments  High End Strategy Consulting is needed at key points  Firms with location analysis, talent ecosystem, investor data experience needed  Inability to set expectations with internal and external participants
  23. 23. With deep expertise in helping setup and operate accelerators, ecosystem connects and in-house experts, Zinnov is uniquely positioned in helping the client setup and operate the accelerator 23 Experience in designing, setting up and operating multiple successful corporate accelerators Ex.: Microsoft, PayPal, Pitney Bowes, Airbus In-house team of experts who specialize in entrepreneurship and accelerator operations Tracking160,000 global technology product startups in real time with an ability to provide insights across: a. Verticals: Enterprise software, healthcare, aerospace etc.. b. Domains: Analytics, security, mobile, IOT etc.. c. Hubs: US, China, India, Israel etc.. Advisory Ecosystem Data Extensive ecosystem connects across startups, industry organizations, VCs etc.. Ex.: Partner to NASSCOM and iSpirit for startup initiatives, Knowledge partner for ET Startup awards, strong connects with VCs and angel investor firms focused on technology sector
  24. 24. Zinnov has worked with multiple clients in engaging, partnering and investing in Start-ups 24 Evaluate the start-ups for potential of success • Help start-ups with the business plan • Provide mentorship, infrastructure, VC connects • Provide Seed Funding for Equity : 4% to 10% • Look for synergy with its customers’ businesses Connect with the ecosystem, identify potentials and increase visibility Scan for Start-ups • Scan and filter for relevant start-ups based on predefined criteria – Size, Years of existence, Founder profile, Number of Customers, etc.. Validate Engage Explore Invest InvestmentIntensity No Capital Investment Medium High Capital Investment Broadly encourage and connect with start-ups to identify synergies Make lots of small bets on pre seed stage companies and validate their products Set up start-up accelerator/ Partner with an existing accelerator • Provide lab/soft Infrastructure • Host start-up meet ups/boot camps • Innovation workshop with internal and external stakeholders ideating for the customers Infuse cash in start-ups that have shown promise and help them scale up Provide capital to maximize growth • Identify top performers and candidates for investment • Structure the term sheet
  25. 25. Zinnov has helped multiple corporates successfully run their accelerators Oracle Context: Cisco was interested in setting up an accelerator which will help in : • Solving existing business problems • Go-to-market and revenue impact • Ecosystem engagement and contribution Zinnov helped with business case development, program design and complete operations management Context: The focus of the Oracle Accelerator is to partner with start-ups who have innovative solutions that can leverage Oracle’s Cloud Platform. The focus was to leverage the Cloud Platform. Zinnov helped with articulation of accelerator value proposition, design of program format, accelerator, offerings, curriculum, selection & exit criteria etc. as well as day-to-day operations Context: Airbus has a global network of start-up accelerators. As a part of the network, Airbus has setup an innovation center to create new solutions for Airbus Zinnov helped by providing regional overview to demonstrate the start-up vitality and conduct scan across key countries in APAC, design of accelerator offerings and day-to-day operations Accelerators / Noida Context: Microsoft India was keen on engaging with startups to develop the ecosystem and also enhance adoption of Microsoft products, and was evaluating the option of piloting an accelerator program in India. Zinnov helped with a feasibility study, identification of focus areas, design of offerings, start-up scan etc. Operated in BOT model for the first year Context: PayPal StartTank was structured as an incubation program and being run as a CSR initiative with no specific focus areas or program plan. Zinnov provided expertise in re-pivoting the program with into an accelerator with fintech focus. Created the complete transition plan across offerings, structure, partnerships, curriculum, business alignment, operations plan, branding & marketing plan by channels etc. Context: Pitney Bowes had decided to set up an accelerator in India with a focus on increasing their product adoption. Pitney Bowes needed Zinnov’s expertise in the design and setup of the complete accelerator program. Zinnov helped with start-up scan, design of focus areas, offerings and structure and program management of the accelerator
  26. 26. Bangalore 69 "Prathiba Complex", 4th 'A' Cross, Koramangala 5th Block, Bangalore-560 095. Phone: +91-80-41127925/6 Singapore Level 42, Suntec Tower Three 8 Temasek Boulevard Singapore 038988 Phone:+65 6829 2123 Texas 21, Waterway Ave Suite 300 The Woodlands TX-77380 USA Phone:+1-281-362-2773 Beijing Meilifang Tower 4, Entrance 4, 10/F #1003, 11 Beiyuan Shuangying Road, Chaoyang District, Beijing China 100012 Thank You Gurgaon Office: First Floor, Plot no. 131, Sector 44, Gurgaon-122002, Phone: +91 124 4420100 California Office 3080 Olcott Street Suite A125, Santa Clara, CA 95054 Phone: +408-716-8432