How Corporations Can Better Work With Startups

One way that corporations spur innovation is by working with startups—through mechanisms such as corporate accelerators, venture builders and venture clients. Since 2013 the number of corporate investments in startups has nearly tripled from 980 in 2013 to 2,795 in 2018, and their value has risen from $19 to $180 billion, according to GCV Analytics, a company that tracks corporate venturing deals. Yet the success rate of these initiatives is low. Interviews with more than 120 chief innovation officers and others in similar roles in the United States, Asia and Europe, finds that around three quarters of corporate innovation initiatives fail to deliver the desired results. Three strategies can help: 1) boost the value of venturing to the rest of the business, 2) look outside traditional business startups, and 3) eliminate conflicts of interest between the corporate venture and the startup.