Matchmaking, from romance to corporate innovation, is a tough nut to crack. The former may encounter several obstacles before the union of a perfect pair. Whilst there are the preferences of one party (honesty, communication, and an enduring connection), a lasting relationship requires more than a one-way affection. The feelings must be mutual.
In a commodity market, where the market’s job is to find the price where demand equals supply, the consumer may care about which bakery they buy a brownie from, yet the bakery does not mind whom they serve. Love, instead, can be likened to a match market. The theory, whereby transactions in a market are determined by information and where being chosen is paramount to the deal, was conceived by Alvin Roth, a Professor of Economics at Stanford.
Roth believes that it is the structure of these markets which elicits the best outcome for all parties; the greatest possible matches depending on the data and material available. With the mystery of romance ticked off by Match.com and Tinder, Roth has applied his theory to helping hospital patients find the right kidney donor (for which he would go on to win the Nobel Prize in Economics). Other areas, such as corporate innovation, can lend a hand from the same organisation.
Dating a trophy partner
As part of the digital shift, software is cheaper and technology is more accessible than ever before. This yields an increasing number of entrepreneurs with the latest tools which can improve efficiency. Forming startups, they have a willingness to take risks and a continuous flow of ideas, meaning their makeup serves well for the fast-moving world of technology.
This has drawn the attention of several networks. A report by Deloitte claimed they “outgrow their competition by leveraging exponential technologies and reinventing the market over and over again.” Whilst Salim Ismail, in his book “Exponential Organizations”, proposes that such a composition produces an output ten times more than their competitors.
For many startups, money, time and resources are in short supply. Often, unbeknown to who their customer is or what their commercial model entails, the opportunity to work with corporates can be eye-opening. Given the cultural divide between the two bodies, an effective relationship can serve as a priceless insight into how large firms process and how to interact with corporate members.
Businesses in the form of accelerators can facilitate the relationship between startups and corporations. The support, though, does have its hiccups. Many accelerators that fulfil the role of matchmakers have seen only slight innovation, as technologies fail to progress. A survey by Fortune found most programmes went without success: of the 81% examined, fewer than 25% of the startup pilots resulted in a commercial deal.
An increasing number of these accelerators are funded by corporates. The motivation behind this varies, with some projects pushed by investors for investors. Serving as a great PR story, an accelerator can be used to create an external image of innovation. Under such control, technologists and strategists will be situated in isolated outposts — meaning innovation is kept to the side of the core business and the results are fruitless.
How to find the love of your life
Briefly returning to the topic of love, the philosopher Alain de Botton recently gave a talk on why we will marry the wrong person. While insisting that this was nothing to worry about, he identified a factor is our inability to locate our own flaws. He claims that 10 minutes after meeting a stranger, they are likely to know more about your defects than you could grasp in 40 years.
Past the jarring examination, this can be applied to corporations. Even with a great workforce, there will be problematic areas unknown to them which talent elsewhere could solve. There are innovation programmes, such as The Bakery’s, that offer solutions to those snags that can be resolved with input from third-party innovators. They prove their value by identifying the right problem to solve.
Past the jarring examination, this can be applied to corporations. Even with a great workforce, there will be problematic areas unknown to them which talent elsewhere could solve. There are innovation programmes, such as The Bakery’s, that offer solutions to those snags that can be resolved with input from third-party innovators. They prove their value by identifying the right problem to solve.
The Bakery’s Start programme is one of their approaches to this. With a corporate’s long-term challenges identified, the financial backing is there to find a solution. The programme involves entrepreneurs starting a new, independent company. This begins with those who are chosen being placed together in a cohort, where they will have a chance to find their co-founder. Once matched, they will examine their client — gaining access to capital, data, and insight — and take solutions to market in little time.
Starting from the ground up and building companies differently, the process is de-risked. Gaining access to funding and resources are hurdles that entrepreneurs often face. Yet, with access to a network which includes clients ready to pay for a service once it is built, the chance of success is much greater.
A happily ever after is possible
Between corporates and startups sits a win-win opportunity. Working with a corporate offers access to datasets, customers, and capital, giving startups their holy grail: the chance to test and learn. Scaling the winners and forgetting the losers, they can get off the ground and accelerate growth. For these ideas to make it to revenue, the relationship’s framework must be right. Through having the ability to identify pain points and use their network of five-thousand, The Bakery has developed a market ripe for open innovation. Much better than just swiping right.