Building Trust to Bridge the Gap: Evolution of PoCs in Turkish B2B

For us, it all started with this challenge.

The headline from 2016, suggested Turks lack entrepreneurial aspirations. ( Study: Turks have limited future entrepreneurial aspirations) Turkish college students participating in our research expressed similar frustrations.

Students consistently highlighted a significant gap in resources and guidance for becoming successful entrepreneurs. Entrepreneurship was either build the next Facebook or go bankrupt: no middle ground, road map, or relatable local tech entrepreneurs. Only Nevzat Ayd?n did it and one in 80 million was a scary statistic.

Thriving entrepreneurial ecosystems depend on collaboration between various players. Corporations are catalysts creating demand for innovative solutions from startups.

In the 2010s, this dynamic was lacking in Türkiye.

Large companies rarely sought solutions from local B2B startups, with most interactions happening through corporate social responsibility initiatives. This gap is evident by looking at a few figures: 80 technology development zones, thousands of tech SMEs, and hundreds of B2B startups existed alongside only a handful of active Corporate Venture Capital (CVC) units.

Turkish entrepreneurship was more like a nebula than an ecosystem.

The lack of corporate B2B startup engagement slowed the ecosystem to flourish. This was our problem statement and we set out to bridge this gap.

First Fails are the Worst

We started by digitalizing our startup content from problem definition to value propositions and launched the first online project incubator in 2017. Baran had a ton of curated content on corporate innovation and we found a way to productize it for the aspiring entrepreneurs.

Workinlot was going to drive entrepreneurial talent and link it to corporations with a first-of-its-kind virtual project incubator. 3 years, many firsts, 1000 incubated projects, and 10,000 registered users later, we had no money left and had to shut down the site. (Retro Workinlot) First learning, corporations, and idea-stage projects are not a good match. Corporations demanded validated solutions.

In 2018, we started doing Workinlot B2B startup demo days with sponsoring corporations, to understand what the companies would be willing to engage with. These programs hosted newly founded startups like Bluedot, Thread in Motion, Blok-Z, B2Metric, ForFarming , Eyedius Technology , and SIMULARGE Global, Stroma. The startups later raised over 23 Million $, but by 2020 we barely got our costs covered.

That is the second epic fail...

We started with a "Why" and several epic fails later, we had the "Whats", but we still did not know the "How" that was financially sustainable.

Then, Corona hit in 2020. If it wasn't for ?zel or Sinan we might have given up. For the next 8 months, we focused on the mismatch from the corporate's perspective and held over 100 meetings with Turkish Fortune 500 corporations. Turns out,

• Most corporations were not aware of the level of solutions Turkish startups could offer them
• Turkish companies in general did not have a structural way to analyze innovation demand from internal business units
• Even if startups approached local corporations, most of them had no structural methodology to assess and engage with the new technology and business model supplied by startups

We set out to create services that help corporations realize the new demand. Painstroming workshops, competitor innovation benchmark studies, ideation workshops, venture building, and intrapreneur-in-residence services.

These services generated demand pools for different corporations. By the end of 2021, we had year-round contracts with several corporations, to address the uncovered demand by facilitating startup engagement activities.

Connecting agile startups with established corporations was a generation gap-like challenge. Such a challenge requires building trust amongst the two and this meant a common language or methodology. So we adapted the Proof of Concept (PoC) terminology of the IT industry to corporate innovation projects.

Through several failures, we learned to develop certain steps for the engagement and in each step of engagement identified a list of requirements, actions, and a checklist. Every step of the PoC projects generated a ton of data. (Update reports, presentations, proposals, email correspondences, etc.)

Data uncovered patterns and helped us iterate the methodology till 2023. After many PoC experiences, we fine-tuned a 3-stage PoC playbook. (PoC Data and Business Intelligence)

PoCs built trust between startups and corporations, bridging the gap and resolving the resulting mismatches. These projects were measurable risks for corporations and proved to be the most effective way for B2B startups to build a product that can achieve market fit.

Now, we focus all of our efforts on boosting PoCs by providing corporations services to leverage these projects while investing in B2B startups based on their performance.

Through our PoC-validated B2B startup funnel, we completed our first investment with Wyseye.

What about the Turks entrepreneurial aspiration?

Since the article was published, some ecosystem dynamics changed.

R&D expenditure of Turkiye reached $3.2 billion. Ecosystem stakeholders expanded to 122 technoparks, 200,000 R&D staff, and more than 8 thousand technology SMEs. The technology userbase expanded drastically with an internet penetration rate of 85%, a social media penetration rate of 75%, and 92 million mobile subscribers. Turkiye became one of the largest data-producing countries in the world.

These factors led to increased corporate startup engagement and investments.

The number of CVCs in Turkiye increased to 84 as of the end of May.

We are all on a learning curve in Turkiye in terms of what we can aspire from technology entrepreneurship. Corporations are learning about how to engage with local startups, investors are developing new strategies and international networks, the government is hopefully learning about regulating and incentivizing the new, and startups are learning through practical experiences.

We learned how PoCs help bridge the gap between corporations and startups.

The challenge of "Turks lack entrepreneurial aspirations" is still on.

Because entrepreneurial aspirations can only flourish if all stakeholders within the ecosystem take action. And we are all learning our parts.