Common pitfalls in corporate innovation (and how to avoid)

At King Street Ventures we offer guidance to startups and corporate innovation teams as they embark on their innovation journeys together. Here are five common pitfalls we've noticed and considerations for how to fix.

When innovation teams are isolated from the rest of the organization, startups often face the challenge of having to "sell-in" their ideas a second time after a successful pilot, resulting in dead-ends if their solution isn't embraced by the broader business. Even if a startup excels during a pilot, there's no guarantee its solution will be adopted or scaled company-wide.

How to Address:

• Ensure pilot objectives align with business goals, making them a company priority.
• Involve a business lead, not just an innovation manager, throughout the pilot process.

Due to the deliberately slow-paced nature of large corporations, traditional procurement teams struggle to keep up with the speed required to approve and fund startup projects. Startups require immediate access to capital to finance their projects and many cannot afford to wait 60-90+ days for payment upon project completion or final delivery.

How to Address:

• Provide accelerated procurement processes and payment terms tailored for startups.
• Obtain pre-approval on discretionary budgets for pilots up to a specified amount for upfront payments.
• Maintain transparent communication about financial matters with founders to ensure their financial solvency during all stages of work together.

Corporate executives tend to have a risk-averse attitude, which may clash with the fast-paced, innovative approach common in startup ecosystems worldwide. This puts corporations at risk of decline in the wake of disruptive startup technologies and new business models.

How to Address:

• Establish a separate legal entity to shield your corporation, reducing risk exposure.
• Promote experimentation and convey that failure is part of the learning and innovation process.
• Implement measures to distance your brand and company data from experimental projects.

Disruptive technologies emerge from external sources, challenging the conventional operations of corporations. While internal innovation is crucial, staying competitive requires constantly monitoring what is happening beyond the walls of your organization.

How to Address:

• Prioritize innovation outreach by sending teams to conferences to share insights with the organization.
• Collaborate with startup accelerators and hire regional innovation scouts to stay abreast of emerging technologies.
• Engage KSV for always-on innovation services to identify disruptive solutions ahead of your competitors.

There are instances of corporations replicating a startup's product or idea after being exposed to it, potentially jeopardizing the startup's intellectual property. Startups may hesitate to share detailed information without guarantees to protect their innovations when working with your corporation.

How to Address:

• Offer founders a non-compete agreement (12-24 months) to prevent the corporation from developing a competing product or service.
• Co-develop products with startups, aligning incentives for commercialization through licensed or sold intellectual property rights.
• Discuss exclusivity terms and buyout options upfront to clarify potential arrangements post-pilot completion.

KSV's Connected Commerce Summit

Join us at KSV's virtual summit on May 09-10 to meet the fastest-growing startups in retail and digital commerce! Engage with founders as they present their solutions and gain insights from innovation executives of the world's leading retail companies. Don't miss out, register here.

KSV is providing a limited number of free passes to our virtual event. This is your chance to sign up to network with industry leaders in marketing and innovation!

? Networking opportunities with founders & executives

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? Virtual Expo Hall with additional resources

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