Corporate innovation: Accenture teams up with Founder Institute to create spin offs
This week, David Vermeersch gave his last presentation in the Founder Institute accelerator program. After he answered the questions from a select number of investors and bankers from the Antwerp office of Bank Degroof (which hosted the graduation event) he and his startup Geniefacts are now officially Founder Institute graduates.
Geniefacts is what Vermeersch calls a “small data” startup that wants to make it easier to create reports from various data sources that are fragmented throughout companies and corporate divisions. But it’s not so much the business model that makes it stand out from the other presentations – it’s the fact that somewhere halfway through the presentation, there is a slide showing how Accenture will help him distribute his product to the corporate clients of the multinational – like Unilever.
Since distribution (or rather the lack of it) is what kills a lot of startups in the first place, it seems like Geniefacts has quite a leg up compared to the others in his spring 2013 class. Geniefacts is the first startup to come out of a partnership program between Accenture and the Founder Institute – a new breed of corporate innovation program.
It’s not quite corporate venturing, and it’s not quite intrapreneurship either, but a hybrid that tries to capture the best of both worlds.
“I think it’s the first time that a multinational asks its consultants to launch a startup,” says Steve Goossens, innovation and entrepreneurship manager for Belgium and Luxemburg. “We’re not telling them to leave the company to do it, but we’re looking to provide founders with the freedom to develop big, risky ideas while still feeling some support from the firepower that Accenture brings.”
120 ideas, 1 spinoff
Last year, Accenture asked its consultants to think about ideas that could strengthen or complement its strategic themes of sustainability and big data. Some 300 consultants pitched 120 ideas. David’s idea was one of them, and the only one to get a chance at development. “We didn’t just look for a decent idea, we wanted to find a team or a founder that would be able to actually develop the idea.”
“Of course, because we don’t have experience nurturing preseed startups, we went looking for a partner who operates on the same scale as us: the Founder Institute. We weren’t looking for a partner who wanted to develop or accelerate the idea – that’s our core business, after all. But we needed someone to help our entrepreneurs develop the right mindset, because there is a big difference between intrapreneurship and entrepreneurship: it’s the difference of being surrounded and maybe even a bit shielded by an organization, and being a founder.”
Belgium was a pilot market, but Accenture is now looking whether it can roll out a similar program in markets like France and the Netherlands and other countries, says Goossens. “Our ambition is to see whether we can scale this initiative up, but still guarantee some basic conditions. It’s not our ambition to launch a 1000 startups. But also, when we do launch startups, we want to be able to support them.”
David was actually one of two startup ideas that Accenture selected to go to the market with – the other one was a biometric authentication idea developed by Mercedes Diaz (who was one of the laureates of the ICT Young Lady of the Year trophy in Belgium). “Her idea fitted more directly into our core business, so we decided in the end to develop it in house.” Goossens admits that its sometimes hard to choose between models like spin off, joint venture or in house development. “It’s always something of a puzzle. The criterium is whether something would more easily make a name for itself outside Accenture or not.”
I ask about the terms of the deals. Does Accenture take the typical 6 to 8 % of an accelerator, or a majority stake, or anything in between? Goossens says that the goal of Accenture is first and foremost to “make the startups succeed”.
The Budapest startup that got away
“This means that the founders get 4 months of financial support. And we do envision to take a stake in the companies later, to show the world that we are really interested in the company – but we also want to make it possible for David to raise external funding for his startup. Again, it’s a balancing act. We think of it as a kind of “sponsoring effect”. With David, it’s possible that we will go an extra step, because we think the idea has so much potential.”
David had the idea for Geniefacts by thinking about his work as a consultant, he says. “A lot of our clients had huge difficulties creating even simple reports. It’s really a “small data” problem: all kinds of data are everywhere, but even when you manage to get them in one spreadsheet, it’s not easy to get something presentable or useful out of them.”
“I saw that it sometimes took days of work to assemble something – and then it didn’t even look good. And with the war for data scientists out there, it’s doubtful that you will find someone who can help you with these kinds of small jobs.”
Geniefacts is already Davids second company, and he’s intimately familiar with both the highs and lows of entrepreneurship. Last year, he founded a startup in Budapest – “an online marketplace for handmade goods, like Etsy – who weren’t in the Hungarian market at that time.”
It sounds a bit like he took a page from Rocket Internet, I say. Was the idea to sell it to Etsy? “That would have been a nice exit, but we were ultimately screwed by our developers and had to abandon the project. And my co-founder felt that he had lost too much to consider pursuing the startup, so we just put it on hold.”
The Geniefacts team is now three people strong. Apart from David it has a technical co-founder and a creative developer. “We also get support via the Founder Institute, of course, and we can contact people inside Accenture when we face challenges.”
The arrangement with Accenture is a good way to combat the founder loneliness, David finds. “The idea is to strike out on my own now that we’re coming closer to a launch, but I still work a lot at the Accenture office, because I have a big network inside the company – it’s good to get those ideas. It also beats working from my appartment, since I didn’t find a garage anywhere for our startup (laughs).”
“It also helps to do some customer development, indirectly. We can get a lot of input from colleagues about what clients struggle with, and product ideas that we can try to monetise further down the road.”
So what’s the biggest difference between being a startup founder and a consultant? David: “It’s probably the scope of responsibility. There’s HR stuff, legal stuff, even stupid administrative stuff that lands on your desk as a founder. And on the other side of the spectrum, there’s the big strategic steps that you need to take, and the freedom and speed you have to take those. Of course, there’s no place to hide: you stand or fall on the merit of your own decisions. And if you mess up, you’ll feel it in your wallet – there’s no safety net.”
Nobody likes you when you’re new
I talked to an ex-consultant recently who had started his own company, who said: “I was surprised how much indifference – even mistrust – there is for new companies and ideas.” David says he hasn’t noticed that – yet. “I haven’t faced many clients yet. It might change once we start to talk about money (laughs).”
So what if Geniefacts doesn’t find a market – or at least: doesn’t find a market fast enough, I ask. In other words: what if his startup fails, like so many do? “Well, that’s where Acccenture offers a very interesting formula, in the sense that I can go back. I’m not sure I’ll regard it as a failure. It will be a learning curve that can be interesting for later stuff.”
So there goes Geniefacts now, out of the bubble that the Founder Institute is. 21 startups embarked on the acceleration path, only 5 graduated. It is a bubbly environment, David admits, with its weekly meetings, the team spirit. And the homework, which incidentally is why 16 of the 21 startups didn’t make it to the end: some ideas turned out not to be ripe enough, and teams were asked to come back later. Others just didn’t manage the workload of assignments, and the Founder Institute is apparently quite strickt about that: whoever misses his homework deadline two times is expelled.
Wasn’t he a bit of a rara avis among those people who quit jobs, I ask? His presentation certainly stood out – he’s the only one with a name like Accenture backing him, and a direct line to a distribution channel of thousands of corporate customers. “Yeah. It wasn’t necessarily an advantage – there were very critical looks; it kind of new. But I guess it’s up to me to prove the doubters wrong.”
Meanwhile, Accenture has started working on its second batch of entrepreneurs and startups. Goossens: “Mobile is definitely a trend this year. We’re also seeing a lot of people who are trying to pin down the next generation of industries for Belgium, trying to identify what our assets are. On another level, I notice a very big interest in data and analytics, for instance how data can increase our living experience in the city. There’s things like parking problems, but also the waiting lines at bureaucracies. People are thinking about creative ways to use Google Glass, but I also saw something about smart sensing for chemicals. It’s very broad.”
[photo: franzconde, Flickr]
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