Startup, Corporate Venture, Open Innovation Hubs: Find out what the differences are
When it comes to Open Innovation, a series of terminologies and concepts appear before managers. Many of them come from Technical Jargon, which can make things even more difficult to understand.
After all, what is a Startup? What is a Corporate Venture? What are open innovation hubs?
Easy, we prepared this article to explain everything. Keep reading to find out!
Startup, Corporate Venture, Open Innovation Hubs: who is who in the world of digital transformation
Open Innovation is greatly enhanced in businesses undergoing a so-called digital transformation — business models supported by the adoption of disruptive technologies that transform the consumer experience and the operational processes of companies in addition to influencing business models.
It is in this context that terminologies such as Startup, Corporate Venture and Open Innovation Hubs arise. Next, understand what each of them stand for!
A startup is a company designed to expand rapidly. It is this focus on growth unrestricted by geography that differentiates startups from small businesses.
It is also a type of company that works to solve a problem where the solution is not obvious, and where success is not guaranteed.
Startups are created to search for and validate a scalable business model in a way that has major impact on the market or how a certain problem has traditionally been resolved.
The aspects of innovation, disruption and scalability of a startup are the reasons why they are different and cannot be treated or built as a small or medium-sized enterprise (SMEs).
Corporate Venture Capital is a risky investment in innovative companies, such as any venture investment; the difference is that the funds come from a large company.
Unlike the investments of conventional venture capital funds that respond only to a financial logic, the return on investment of these funds is also strategic.
There are several segments of venture capital funds: from seed investments (companies that still do not get significant income) to regional and sectoral funds… even “capital development” aimed at profitable companies, to allow geographical expansion through mergers and acquisitions.
Corporate Venture type funds have an even greater diversity of profiles because in addition to this segmentation by size, each sector has its specificities and each company defines its investment policy.
In short, it is the type of investment made in innovative high-value ventures —a promising startup that can bring technology expertise to a traditional company, for example.
Open innovation hubs
Open innovation hubs are emerging and powerful tools for businesses to stimulate innovation and encourage the creation of new products, technologies and even new businesses.
In general, open innovation hubs (also called open innovation centers) try to serve as a meeting place for individuals with similar ideas, interested in technology and innovation.
They can have laboratory space for people to work on technology or products, as well as logistical or commercial support for those interested in launching commercial projects.
Open innovation hubs are similar to laboratories and research workshops maintained by companies and other innovation managers, but what sets them apart from these structures is that they emphasize networking and the community to the detriment of workshops and traditional laboratories.
In short, open innovation centers try to gather diverse minds and opinions and allow passionate people to explore their own ideas and pursue their own projects, enabling innovation.
How to choose between Startup, Corporate Venture, Open Innovation Hubs
Overall, the most innovative companies work with these three concepts, alternating strategies to enhance the creation of products and services that really lead to innovation.
Startups are useful for bringing expertise that the traditional company cannot develop; at least not in a timely manner, since they are not exclusively dedicated to a single problem or on a single opportunity as startups usually are.
When it comes to technology then, it is much easier to collaborate with a startup than to assemble a team and take a long time on feasibility tests, prototypes etc.
Corporate Venture investments are useful for businesses that want to invest in innovative ideas and solutions and have the capital to take the high risks involved.
Returns are usually quite high, obviously, because the risks are so great.
Collaboration with an open innovation hub, or creating one, tends to be something more perennial. Teams and resources are maintained to foster creative thinking and the continuous proposition of innovative solutions.
MJV can give you a hand: get to know our MJV Innovation Lab
Here at MJV, we developed the MJV Innovation Lab in partnership with the Federal University of Rio de Janeiro (UFRJ), in Rio de Janeiro – Brazil. This open innovation hub works within the university’s Technology Park to develop projects in the areas of Design Thinking, Gamification, Big Data/Analytics, Agile Methodology, Digital Strategy and Internet of Things.
The purpose of our Startups pre-acceleration program is to take your solution off the drawing board and connect with companies that seek innovation the most.
All this with mentoring from the professionals who made MJV increase profitability by +80% last year alone. Approved Startups will be pre-accelerated by MJV in a completely free, agile and creative process.