There’s been a lot of talk about innovation in recent years: when you work on it, it’s your everyday life and everything is clear enough, but there’s always someone who manages to astound you.
“Do you know about Startup Studios?“
“Not yet”, I often reply: I know new things come out all the time. It’s a sphere that, by definition, needs to be dynamic and evolve continuously, but at times it’s very ephemeral and you have to investigate so that you gain an understanding.
My job title right now says Head of Innovation Hub, but many people don’t know what an Innovation Hub is. Working in innovation is not like working in administration, sales or logistics, spheres that also acquired a number of job titles that didn’t exist just a few years ago, but which we know are less revolutionary and unstable.
I believe that there’s a lot of confusion in the sphere of innovation, which I’ll try to simplify for you. First of all, there are two macro-areas of innovation:
• supporting innovation, which aims to improve existing systems – such as telemedicine or quality control – using Artificial Intelligence in production chains;
• disruptive innovation, which allows the identification of revolutionary creations, capable of significantly changing the context we’re used to: such as e-commerce, for example, or smartphones, which have substantially changed our behaviour and habits.
Disruptive innovation is thought to have been invented and produced by startups. Support innovation, on the other hand, by large companies which, with or without the collaboration of university research centres, have shown themselves to be more interested in improving the core business without the need for major corporate upheavals.
Fortunately, things are not limited to just these two watertight compartments, but rather there are public, private and mixed ecosystems where institutions, companies and startups meet, support each other, interact and collaborate, each with their own strengths and skills, thereby contributing to a new experimentation project.
Let’s begin with startups, leaving out the institutions and research centres, which are already widely known. Startups are not yet uniquely defined, but the most widespread definition is that taken from Steve Blank’s The Startup Owner’s Manual, according to which they’re “a temporary organisation designed to create a repeatable and scalable business model”. We can then add, quoting Eric Reis, that a startup is also “designed to create a new product or service in conditions of extreme uncertainty” and, of course, to do so in the shortest possible time.
Startups are located in physical or virtual places, such as:
• Public or private incubators, where they are supported as they take their first steps, for example when drafting a business plan, building a team, designing a service or product, basically everything needed to enter the reference market. That’s why almost none of them require equity (participation in the share capital) and the programme lasts around 2 to 3 years.
• Accelerators (especially private ones) which, in most cases, require equity (around 7% to 10% of the share capital, on average), while others charge a fixed fee. They facilitate the consolidation of a startup in the reference market and the collection of funds (specifically from Venture Capital and Business Angels). Acceleration programmes have a shorter duration of around 3 to 6 months, on average, from depending on level of development or maturity of the startup.
In both cases, very strict selections must be overcome to access the incubation and acceleration programmes, given that one in ten startups fails (source: www.ice.it/it/settori/startup-innovazione/monitoraggio-startup), while about 90% – 95% do not survive more than 3 years.
What do I know about a Startup Studio? That its main business is producing companies. It doesn’t recommend them, doesn’t accelerate them, but builds them from scratch, starting with an in-depth analysis of market trends and real needs that have not yet been fulfilled. A Startup Studio is designed to lower the failure rate of a startup as much as possible and, at the same time, increase its success rate thanks to the experience and network of the organisation. The name Startup Studio was coined by Bill Gross, who founded IdeaLab in 1996. Company Creator, Startup Studio and Venture Studio, Company Builder and Startup Foundry are synonymous. They’re still not very widespread in Italy, but we’ll see what happens in the future.
I often attend the pitching days and demo days organised by Incubators and Accelerators because it gives me the opportunity to meet startups that could be useful to the company from different points of view, for example filling a “gap” in terms of skills, learning about a new way of doing “old” things, devising a new project for the ecosystem that I work on, partnering with companies other than mine that are interested in the same issues and approaching new markets that are complementary to traditional business.
The Innovation Hub concept was conceived and implemented by the European Commission, which in 2008 established the European Institute of Innovation & Technology to strengthen Europe’s ability to innovate. The EIT is a unique initiative that drives European innovation by integrating businesses, institutions and research to find a solution to pressing global challenges. To date, there are eight Innovation Hubs in total, each of which focusses on a specific global challenge: climate, digital, food, health, renewable energy, manufacturing, raw materials and urban mobility. These eight have been joined by others through local and system partnerships.
The Innovation Hub model has been replicated by public and trade organisations such as Confindustria, CNA, Confcommercio and other private organisations, as well as by medium and large companies interested in promoting innovation. In order to stay in touch with new technological discoveries, which are used increasingly quickly and frequently in business, companies have built their own hubs. Therefore, an Innovation Hub provides an ecosystem of startups, companies, research centres and freelancers at the service of sustainable development and business objectives. Innovation is closely related to the concept of risk: there’s a risk of wasting time and resources, as well as money. Basically, an Innovation Hub is a community in which there is mutual support to create greater value and drive the evolution of a specific area, while reducing risk.
Next to an Innovation Hub there is often an Innovation Lab, a real physical laboratory where the solutions identified take shape and form, are tested and, in the best cases, a prototype is created.
I believe the important role that Innovation Hubs have in implementing discoveries such as Quantum Computing, Edge-AI and many more and making them into something tangible is clear to see. The value they generate is very significant in terms of knowledge, skills and applications that aim to improve processes and products, reducing environmental impacts and making technology increasingly sustainable and of use to humanity.
I think it’s equally obvious that the complexity of these places of innovation, where collaboration and cooperation, which are essential for the success of a process, can run into issues concerning intellectual property, industrial secrets and competition.
To manage all of the above, I firmly believe in the Open Innovation model, which provides guidelines for managing the complexity of Innovation Hubs and the relational maturity of people and companies that decide to be part of it and conduct important business therein.