How start-ups and companies work together successfully

Collaborations with start-ups are now seen as a good thing for large companies, but various conditions must be met if they are to lead to tangible results. Swisscom, Nestlé and Deutsche Telekom are examples of this.

The fact that Swisscom’s TV box can be controlled with instructions in Swiss German is due to two start-ups from Valais, Keylemon and Recapp IT. Thanks to Mila, a start-up that Swisscom took over two years ago, Interdiscount and Samsung customers, for example, can easily receive support from people with technical expertise. And thanks to a financing round with the participation of Swisscom Ventures, fintech start-up NetGuardians can push forward with its global expansion.

Start-ups are often sceptical when large companies launch start-up initiatives. It becomes apparent early on that many big companies are simply following a trend without any specific objectives, and therefore the joint projects will not lead to any tangible results. However, Swisscom and other groups have shown that although many conditions must be met for a fruitful collaboration, it is quite possible to achieve concrete results.

Success success factor on the part of the group
For example, Deutsche Telekom has entered into a partnership with the Canadian start-up Mojio and is now launching its box, which makes cars into ‘connected cars’, including wifi hotspot and diagnostic tool, on the market in Germany. Thomas Kicker, Senior Vice President Group Partnering and Business Development at Deutsche Telekom, has a number of prerequisites for a successful collaboration. It is noteworthy that he mentions not only requirements for the start-up and its technology, but also identifies success factors on the part of the group. This includes in all cases the general support provided by top management, and in addition, says Kicker, “in the due diligence of a project, there is always a business owner on the part of the group who wants and can push the project forward”.

In addition to this personal support, targets and clear processes also need to be embedded in the innovation strategy. This is demonstrated by Swisscom, where the collaboration with start-ups is managed by the Digital Business Unit (DBU). “Our task is to bring innovations into the organisation,” says Roger Wüthrich-Hasenböhler, Chief Digital Officer at Swisscom and head of DBU.

Swisscom: ambitious growth targets
There are clear targets. Swisscom is expected to grow with innovative web services in the internet business and to focus on strategic topics, such as fintech and the digitisation of SMEs. “We have ambitious growth targets in these areas,” explains Wüthrich-Hasenböhler.

A clear process leads to tangible results. In order to generate a sufficient dealflow, Swisscom focuses on close contacts with universities, in particular ETH Zurich and EPFL, and also uses the Swisscom Startup Challenge to make contact with promising young companies and examine them more closely in a week in Silicon Valley. In addition, its intrapreneurship programme can lead to new products and spin-offs.

Several options are open to a joint project after successful completion. A new company can be established, such as the recent Swisscom Blockchain AG, the product or start-up can be integrated into the group, or Swisscom Ventures can invest in the young company.

Lucrative investment
The well-planned process leads not only to the most tangible results, but also to lucrative investment. Swisscom Ventures started 10 years ago with CHF45 million; the Evergreen fund, where proceeds are reinvested, is now valued at CHF105 million. The increase in value is due not least to 17 exits.

The task of the Nestlé Innovation Outpost team in San Francisco is almost the same as that at Swisscom. “We bring innovation into the company through collaboration with early stage start-ups,” explains Stephanie Nägeli, Global Director of Marketing and Innovation Food. Specifically, it is about identifying and developing new digital services and business models for Nestlé.

The Outpost team who is based at swissnex San Francisco is currently working on 12 to 15 projects. When Nägeli talks about the projects, it is striking how quickly the team tests new offers with consumers. “With a collaboration, a minimum viable product (MVP) is quickly developed that can be tested with consumers. Then iterations follow until finally we get to industrialisation. The pace of the iterations is also important.” This is how Nestlé produces new products and offers on a regular basis. As a successful example, Nägeli mentions Milo, an activity tracker app for children that Nestlé offers in Australia and south-east Asia.