Most large companies have no trouble finding startups to work with. The challenge is getting real value out of the collaboration.
Since its inception in May 2014, an incubator at Unilever, the $59 billion Anglo-Dutch consumer packaged goods company, has employed a simple three-stage process — pitch, pilot, partner — that has led to the launch of more than 90 pilots with 90 different startups. The company has subsequently decided to scale about half of those. It’s a model that pushes startups hardest and gets results for the multinational company the quickest, says Jeremy Basset, head of the incubator, known as Unilever Foundry.
“In a world that is changing so fast, experimentation and failure are actually the key ingredients to making sure you are leading the agenda and learning as you go,” says Basset, who has been with Unilever since 2003 and is based in London. “As an organization, we have to become much more comfortable with the idea of failure and seeing that as part of the journey to actually getting something that is scalable.” Some of Unilever’s best-known brands include Axe, Dove, Lipton, Ben & Jerry’s, and Marmite.
The Foundry’s Mission
The Foundry’s website describes its goals as creating “sustainable growth and an intense sense of social purpose” within Unilever. It also spells out the company’s reason for wanting to collaborate with startups: “Our objective is to build and cultivate strategic partners for the future, with Unilever as a partner of choice.” The Foundry site invites entrepreneurs to create a profile and share what they’re up to; attend hackathons and other events; respond to challenges posted by various Unilever brands; or learn more about landing an investment from Unilever Ventures, the company’s venture capital arm.
What Unilever Brings to the Table
As the Foundry was being created, company executives put a lot of thought into what the company could contribute to the startup ecosystem, Basset says. It came up with four key opportunities to offer startups and entrepreneurs:
- Marketing mentors. Over a three-month period, Unilever mentors work directly with startups and entrepreneurs on brand vision, marketing strategy and product roadmap.
- Challenges. Unilever brands and functional teams post briefs seeking innovative solutions. Companies with proven technology are invited to pitch their solution and, if selected, pilot their technology.
- Investment. Startups have the option of applying for funding through Unilever Ventures, the venture capital arm of Unilever.
- Networking events. The North America launch event saw more than 150 Unilever marketers mingling with leaders from the startup community to network, see pitches from leading startups, and explore opportunities for collaboration.
Unilever has more than 7,000 marketers worldwide, Basset says, all of whom have expertise in a variety of areas, and sharing that expertise can help develop both startups’ technologies and the company’s brands.
“Basically, we offer opportunities for startups to scale up,” he says. “For a relatively small startup to work with one our brands — we can very quickly take them to multiple countries and translate them into multiple languages. That’s fantastic for the startups – and for us.”
Case Studies: Market Research and Social Media
One example of a recent collaboration is Unilever’s partnership with Discuss.io, a Seattle-based market research firm that has reinvented focus groups with a virtual, on-demand research platform. The focus group approach has changed very little since the Mad Men era of the mid-20th century, Basset says, and Discuss.io has brought it into today’s interactive culture, connecting people from across the globe in real time – often targeting specific demographics – and doing it far more quickly.
“And because it’s all done virtually, you can apply a whole range of technologies to synthesize that focus group,” Basset explains. “You can automatically transfer a conversation so that it is easily searchable, and then you can very quickly recall specific parts of that focus group because it is searchable. So it’s not only an asset that’s more efficient, it’s also enduring.”
Basset says the Foundry has helped Discuss.io grow from a small market research firm to having a global reach with offices in 20 countries around the world and its platform being translated into 40 languages.
Another Foundry success story Basset referenced involves startup social network Olapic, which collects consumers’ social media images of themselves or others using Unilever products. Olapic’s technology will identify such images and send the user a note saying, “We love your image; do you mind if we share it on our network?” If the user approves, Basset says, Olapic will compare it against other images containing the same brand and then hunt for the best imagse to use in upcoming promotions and campaigns.
“What we’re finding is that the engagement rates [with images created by other consumers] are much higher than what we’re seeing from our traditional agency partners because the users are often rejecting ad brand-generated content in their newspapers,” he explains. “They’ve begun accepting user-generated content.”
When Olapic first applied with the Foundry last year, it had one brand activation live in the marketplace. Today, it is working with more than a dozen Unilever brands globally.
Benefits
Unilever’s more than 400 brands collectively have put about $20 million into startups from around the world through the Foundry’s piloting and experimentation process, Basset says, and many of the tests are already delivering tangible benefits back to the business. (The $20 million represents brands’ investment to pilot and scale the startup technology; it doesn’t include equity investments into startups, which are made through Unilever Ventures.) The solutions they’re bringing, he says, often are about half the cost of the company’s traditional suppliers, and are resulting in buyer engagement levels that are about one-third higher than usual.
The Foundry is also helping to change the culture within Unilever, Basset says, helping shift the company from internally-focused to externally-oriented. It has gone from a place where executives are comfortable with a model of planning and perfecting everything, to being willing to launch and learn. And the Foundry has nudged Unilever to figure out how to accelerate its standard 36-month innovation cycle, so that its efforts aren’t outmoded by the time a project launches in the market.
“Our job is to continue to look at how we can stay relevant, and to be honest, the best way to do that is to partner with the people who are reinventing the future,” Basset says. “That’s why we needed a model that would enable us to innovate through cooperation, to partner with others and to find a platform for that partnership.”
Lessons Learned
What did Basset and his team learn in the earliest stages of the Foundry? One lesson was that Unilever’s business leaders and brand chiefs were being too specific with their challenges, which limited the pool of potential solutions. When they bring a broader challenge, he says, startups come back with a variety of different angles and an array of different solutions.
Another evolution for the Foundry was honing the type of companies it wants to partner with. There’s no strict criteria, Basset says, but the startups that fit best with the program are those that aren’t too small, yet are still young enough to want to work with Unilever to expand their reach. “Generally, the best startups we work with have a proven pitch, have perhaps 10 or more people working on their team, they’ve received a round of funding, which enables them to support a client like Unilever, and they can easily allocate one or two people to be working on the pilot without us being a massive distraction,” he says. “We find that works well for us, because we can effectively work with them, and it works well for them because they can be working with Unilever and not be overly distracted from the core of their business.”
Of course, even if only the best startups in the pitch-pilot-partner process make it through to that crucial third phase, the final result is still only about a 50 percent success rate. But being willing to experiment and fail is the only path to growth, as far as Basset is concerned. It may sound risky to some, but it’s exactly how he would advise others to get their corporate innovation programs going.
“You can start with one pilot, see how it works, and develop the program from there. [Corporate] innovators might spend twelve months developing a model of what’s the right program for their company and then try to align stakeholders around that. The much better thing to do would be to start to engage with the startup community in a small way very quickly. Get a pilot off the ground, and then look at how you do that more systematically… You can learn a lot by doing in this space.”
A video overview produced by the Foundry is below.
