Incumbent businesses are developing innovative partnerships, accelerator programs, and advisory boards as part of their strategic response to disruptive challenges from startups, according to a panel moderated by Mark Bidwell, alliance partner at Clareo.
The panel featured Thomas Birr, senior vice-president of group strategy and innovation for energy utility RWE; Bruce Dines, vice-president of media company Liberty Global’s corporate venturing arm, Liberty Global Ventures; and Lana Glazman, vice-president of corporate marketing and corporate innovation for cosmetics producer Estée Lauder.
In the face of disruption from smart technologies, Germany-based RWE created a €130m ($145m) strategic venture capital fund to invest in innovation, Birr said. RWE now has teams in place across tech hotspots in Silicon Valley and Israel to develop collaborative partnerships.
RWE’s Innovation Division said in February it has partnered California-headquartered home energy management startup Bidgely to bring energy-intelligent products developed in the US to its German consumers, enabling households to identify which appliances use the most power.
Like RWE, cable company Liberty Global has an investment fund, Liberty Global Ventures, which invests in innovative businesses. Liberty Global Ventures targets businesses in the content, technology, internet and distribution technology spaces.
“We are living in a time of such rapid transformation. It is always challenging for large ‘corporations to keep up,” Dines said. He suggested that the term ‘corporate venturing” be replaced with ‘team innovation’ to better reflect the contemporary role of CVCs.
Liberty Global formed a partnership with technology accelerator Techstars in November 2015 to launch Virgin Media Accelerator, a three-month mentoring program to support innovative digital startups. “We received 900 applications for ten spots,” Dines said.
New York-based beauty company Estée Lauder is turning a transformative disruption into an opportunity, Glazman said.
“We are interested in millennials,” Glazman added. “They make up 45% of luxury shoppers, and they are a transformative force for us.”
For millennials, “everything is blended and blurred: gender, ethnicity, even age,” Glazman said, explaining that Estée Lauder has set up a millennial advisory board so top executives can hear from influential millennials and better respond to the needs of today’s generation of consumers.