Startups can be said to have numerous advantages over companies with legacy structures, among them much greater adaptability. For that reason, major MNCs are keen not only to learn from young, dynamic companies but also to partner with them. Hannah Blake, programme manager at BBC Worldwide Labs, spoke to three young serial entrepreneurs to present lessons for the broader marketing industry. The panelists included Vinnie Lauria, general partner at Golden Gate Ventures; Khailee Ng, managing partner of 500 Startups and co-founder of Says.com; and Christian Sugiono, co-founder and CEO of MBDC Media.
While the three share similarities, their starting points were quite different. Lauria started his career at IBM and became frustrated when he couldn’t implement his ideas within the “corporate structure”. “IBM hired someone just to be a mobile water cooler to make sure what others were doing,” said Lauria. “It wasn’t that I couldn’t talk to the top executives but it was hard to get real buy-in. That’s why I left IBM in the end.”
Sugiono was an Indonesian student in Germany and on a whim, made a website that told stories of Indonesians abroad, which turned into a fully fledged start-up. “Now I’m working with top influencers and sponsored content,” he said.
Ng’s path and intent was the most straightforward. “A lot of media make ‘startups’ out to be this disruptive thing but a lot of the time it’s simpler than that,” said Ng. “You just want to make money.”
Lauria shared similar thoughts on startup sensationalism. “I just see an opportunity that other people in the market don’t see and I’m going to go there,” he said. “I don’t go out with this mindset of wanting to be disruptive.”
Practical and often involving a pure business decision and investment, Lauria “looks at companies that are going to grow and puts money behind them.” Ng noted the interconnected world of start-ups, corporations and how money can be made in a single sentence.
“There are a few of you in the audience and other speakers today that are also angel investors,” Ng said. “There are also smaller companies out there that work with you, and they become bigger I guess.”
As the startup model takes hold of corporations and multinationals want to shake up their plateaus, more firms are making greater efforts to be “nimble and innovative” using accelerators, incubators and labs, despite their size.
“I think when companies have shitloads of money they can just have bit more fun,” said Ng. “For a media agency, it’s good to invest in start-ups because they’re essentially outsourcing their risk and if the start-up fails then life goes on for the agency.”
Ng outlined different degrees of start-up accelerators and that “not every innovation strategy is suitable for every organisation.” While some company’s invest “only 10 per cent” of a budget in innovation and have a “few people in a lab to develop micro ideas” others could invest a lot more.
“It depends on how much a company wants or needs to innovate or how aggressive they are,” said Ng. “True, a Telco in Thailand supports staff to come up with ideas and launch businesses. Accelerators are sexy and they get a lot of press but if corporations produce their own things that would be cool.”
Lauria said he believed that while externalising R&D is an option, there is a lot of potential for “in-house innovation” as it also impacts “talent retention” in this case of his IBM experience.
Highlighting that it’s definitely not all just buying and selling, Ng said that start-up founders need to deliver to the media agencies and companies that they work with.
“If you over-promise and under-deliver no one will want to work you — it’s important from day one,” said Ng. “Often the start-up founder has done everything from the company’s logo to marketing the product or service but if they screw up on a partnership, it has a big cost.”
Sugiono concluded on a final benefit of having a strong start-up brand from the context of his own business. “Having a respected and targeted audience on your platform allows you to charge premium prices compared to big media companies that have higher traffic.”