What started off as a seemingly simple online platform to connect buyers and sellers (read eBay), has reframed the form and function of business as usual. Ebay not only provided support to individual craft-makers, home-sewers and hobbyists, but support and space for small businesses to thrive. Today, the notion of big supporting small has progressed into the realm of crowdfunding, social intrapreneurship, and more recently, incubation.
A contingent of socially-minded, global organizations have developed incubation programs, competitions, and investments in effort to support the next generation of social enterprises. Distinct from social intrapreneurship, which focuses on fostering internal innovations to address social and environmental challenges of particular interest to one organization, incubating small, external brands reach and impact across different markets, issues and ultimately, segments. And the benefits, for both big and small, are many.
Let’s first look at how big brands are incubating small brands, ‘for good’:
Investment & Venture Funds
Corporations are allocating significant capital in venture funds and investments for innovative start-ups which can in-turn, extend (and speed up) their own innovation programs. In 2012, Johnson & Johnson and GlaxoSmithKline contributed $50 million each into a venture fund supporting early-stage biotech firms. Not only are these corporations benefiting from the firms’ proprietary research, but they are also organically tapping exciting new offerings, business models, and thought leadership.
Beyond financial support, big brands recognize that start-ups’ needs span a host of services, tools, and resources to succeed. Aside from more formal incubation programs, corporations are launching competitions for social entrepreneurs to compete for coveted prizes. IBM’s A New Way to Startup Competition documents the journey of 10 startups rooted in social good as they compete for software, mentorship, services and a trip to TED@IBM. Where incubators can oftentimes be isolated, competitions such as IBM’s engage the broader public and subsequently, extend the awareness, reach and story beyond company walls.
Charity Charge, one of the finalists in IBM’s competition, is a new type of credit card that lets people earn tax-deductible donations to their favorite charities, and also track and view their donations. For the next stage of the competition, Charity Charge’s founder, Stephen Garten, will join founders from the four other finalists to live in a house and progress through a one-week accelerator, complete with daily challenges by IBM. With fans watching along the way, they will be able to vote for their favorite team, leading up to a winner announced this July. While the concept of a competition is not new, IBM’s fresh approach is.
A third way big brands support start-ups is through dedicated incubation or accelerator programs. From offering up dedicated workspace and mentoring, to access to invaluable (and perhaps cost-prohibitive) resources, large corporations are enabling the next generation to move the needle on our most pressing environmental and social issues. In the tech world, accelerator Techstars has engaged industry heavyweights from Microsoft to Nike, in providing mentorship, training, and even an opportunity to pitch. Nike’s investment in accelerators extends beyond the tech space to addressing girls living in poverty with The Girl Effect Accelerator. Long-time advocate for advancing opportunity for girls, Nike joined forces with The Unreasonable Group to create an intensive program for ‘wildly innovative startups that are positioned to benefit millions of girls in poverty’. The inaugural program launched November 2014, connecting ten ventures to mentorship, a global support network, and strategic financing. Programs like these are proving critical to achieving rapid advancement of solutions to addressing our global challenges in ways that single companies, even large global corporations, could not achieve alone.
So, what is in it for big brands?
Our 21st century world today looks very different than those of industry’s past. Corporations must be actively responding to changing culture norms, and in turn, a changing appetite for engagement and traditional marketing. We live in an ever-connected world where once segregated issues remained so. By recognizing this shift, and investing in or supporting the next generation of leaders, big brands can maintain an authentic voice in the conversations happening globally.
Having an authentic voice and stake in the issues that matter not only to the corporation, but to their stakeholders, gives opportunity (and reach) for highly engaging, meaningful brand storytelling. Brands who turn the tables from themselves onto celebrating the achievements of small brands, carve a new scope for conversation and reputation building capacity.
Internally, incubation provides employers a new range of opportunities to engage their employees. From one-on-one mentorship to volunteer trips, bringing employees into the fold expands the conversation, and impact. The Kering Foundation brings to life, facilitating different ways for its staff to actively take-part in the corporation’s mission-driven programs and investments.
The open-source nature of today’s society affords large corporations the opportunity to return to their roots, tap into a innovation set, and invest in solutions to global challenges that not only impact stakeholders, but their business as usual.