Corporate Incubators – Godsend or a Pain in the Butt?

At this year’s NEXT conference in Berlin, Deutsche-Telekom-CEO René Obermann presented their new incubator programme named hub:raum. This programme will enable 10-15 startups per year to get a funding of up to 300,000 EUR and benefit from the corporation’s expertise and reach. This got me thinking.

Incubators. Let’s use a very broad definition here and say that these are programmes by major corporations, providing platforms for new ideas they can benefit from in the long run. So, if you’re startup with a dedicated team in need for some cash as well as some strategic and organisational advice, you have yourself taken under the corporate wing and hope for the best. The above-mentioned hub:raum will work that way. Similarly, German retailer Otto (see Otto pouring 50 million Euros into Project A Ventures) is on the quest for spotting startups that are fresh and have working business models – ie. generate a sufficient amount of cash. Usually, those models are cloned and virtually within weeks, the original, boot-strapping founders are put out of business because of the sheer marketing power of the aforementioned corporations.

In other words: as soon as you come up with a great product or service, corporate company builders might be after you. Especially if you’re an online retailer, your business model is threatened to be cloned: Buying and selling products per se is something that is not terribly hard to copy for competitors.

Innovation

Let’s call a spade a spade, what’s at stake here is how innovation can be fostered and maintained. Unless innovation is at the core of your business (like for Amazon and Apple, who generate billions in turnover yet are able to regularly come up with products and services that push them even further), major enterprises increasingly find themselves missing out on all innovation fun because their very structure prohibits courageous moves. Enter incubators: Support startups or clone exisiting ones, have them gain a considerable market share and thus provide rejuvenating effects for enterprises which have been founded in the days of yore. If Otto isn’t able to prepare their offerings for the future of digital commerce themselves, it buys some ex-Rocket-Interneteers and gives them enough toy money to do what they should have done quite a while ago in the first place.

Before I zone out to much and let this one turn into a rant (which, knowing how my mind operates, will come out sooner or later), I’d like to ask you guys: What’s your point of view here? Are the initiatives outlined above necessary for a healthy growth of innovation or are those practices actually counter-productive?

(Image by jurvetson)

One Response to Corporate Incubators – Godsend or a Pain in the Butt?

  1. It really depends on the company and the incubator if they are going to be a good fit. You can’t just come out and say an incubator is totally worth it or a total bust. I would say that it is worth looking into to see if you can benefit from the incubator but make sure it is the perfect fit.

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