A major shift is taking place in the way large corporations are solving their business problems. Rather than relying solely on internal research and development (R&D) departments, enterprises are creating corporate venture funds to harness the power of innovative startups.
Economically, it often makes sense. Investing in a startup business that’s already focused on solving a specific problem can be more cost effective than investing the resources to solve the problem in-house. In some cases, it results in an exclusive relationship, preventing competitors from taking advantage of the solution. Technology companies like Google, Microsoft, Dell, Intel and Twitter are leading the way.
Google Ventures, for example, has invested in over 250 startups. Fortune 500 companies have the financial means to create and manage these types of venture funds. It would be difficult for smaller businesses, who stand to benefit to an even greater degree from leveraging the innovation of startups, to create venture funds of their own. The Bridge Alliance, a Dallas-based startup, is tackling that problem by connecting enterprise, startups and higher education institutions with Open Innovation as a Service (OIaaS).
Ken Koo, the founder and CEO of the Bridge Alliance, has been heavily involved in the startup community for a number of years. Prior to launching the Bridge, he was an angel investor. Despite the ever-growing number of startup events held in Dallas, he realized that an important element was missing. Speaking with Koo at the Launch DFW headquarters, he explained, “There were more and more opportunities to get in front of these promising startups. But I started noticing something. These pitch-day events weren’t attracting corporate executives. The large businesses that we have here in Dallas, and in North Texas, aren’t active in our startup community.”
The Dallas startup community often boasts about the large number of Fortune 5000 companies that are based here in the area. It seems as if we’re mismanaging what we claim to be our biggest asset. With 21 Fortune 500 companies, and hundreds of Fortune 5000 companies, shouldn’t there be greater corporate engagement at startup events? That would be nice, wouldn’t it? The truth is, it’s inefficient for a CMO or a CFO to show up at one of the various pitch-day events. How is an executive to go about finding the dates and locations of these startup showcases, and is it possible to zero-in on just the events with startups that are focused on solutions to problems their company experiences? There really wasn’t an effective method to do so, and that was inspiration behind the Bridge Alliance.
The Bridge Alliance’s OIaaS solution allows enterprise businesses to leverage startup technology and services, as well as academia research, to accelerate innovation. It’s the corporate venture fund method scaled down for smaller businesses. Koo discussed the role of the Bridge, saying, “This is the new way of solving business challenges, and being innovative, and for companies that can’t launch their own funds, we’re here to help them utilize this channel. Think of us as a knowledge management company. We’ll get all the startups in the community vetted and reviewed, and then based on your needs, we’ll put you in front of the right teams.”
OIaaS is a concept that is proving to be popular, not just with enterprise customers, startups and universities, but also with municipalities and other geographic business support organizations. Cities are looking to partner with the Bridge Alliance to demonstrate their desire to enhance economic development. The Bridge partnered with the City of Allen and the City of Addison to host back-to-back Open Innovation Luncheons. The by-invitation-only events will bring together leaders from some of the largest businesses in each city with startups that specialize in solutions that address their challenges. The Allen luncheon is taking place at The Hilton Garden Inn on April 7, from 11 a.m. to 1:30 p.m., and the Addison luncheon takes place the next day, April 8, at Brookhaven College, from 11 a.m. to 1:30 p.m.