Translator: Aya Kaneta Reviewer: Cristina Bufi-Pöcksteiner
I am an entrepreneur.
And I want to talk about a big opportunity for start-ups.
I want to share my ideas on a phenomenon that's happening.
It's the mass adoption of a paradigm called
Open Innovation.
And I'm sure many of you have heard of this.
It promotes collaboration and, as the name says, openness.
And it essentially says
that corporations need to start looking externally
for ideas and innovation.
Now, this is where the opportunity lies.
But in order for us to understand the opportunity,
we need to know where we are right now.
Startups are innately innovative.
They're flat, they're lean, they're accessible, they're open.
They have direct access to the end users.
The end users, these are the innovators.
The users of the product.
In fact, in many cases of start-ups,
the founders themselves are the end users.
Where they lack is resources, customers and scalability.
Corporations, on the other hand, they're big.
They have resources, they have tools,
they're like locomotives, they move slowly.
But they have structure and hierarchy, and they have a lot of power.
Where they lack
is they don't have direct access to the end user.
The end user is the innovator.
They also lack agility.
And they have this tendency to be closed and territorial.
Probably the biggest shortfall
or the most difficult thing for a corporation
is their structure.
Because innovation is happening at the base level here.
These are everyday people, like you and me,
confronting a problem and coming up with a solution.
Now, there are a lot of examples here in India.
In fact, I see them every day.
I am truly amazed at the innovation skills of Indians.
In fact, I have to say,
I think Indians may be the most innovative people that I know.
I mean, I am truly amazed.
As I said, feedback does not travel upwards.
Corporates struggle because the innovator is at the base.
And that's just the way it is.
And that needs to be understood by everyone, in order to move forward.
Corporations know this.
They are starting to know this, more and more.
They come to me, they come to our company,
and they say,
"We know that we will fail, if we don't innovate.
We know that we'll become irrelevant.
It doesn't matter if we're a multi-billion dollar company.
If we can't innovate, we will fail."
And it's always funny to see
how they think they're supposed to innovate.
And I think this is where the problems happen.
I see these C-level executives,
and they say, "Well, how are we going to innovate?
Maybe, let's put some bean bags over here,
let's put some ping pong tables over here,
and maybe we can even have a sleeping pod,
you know, for our employees, we'll have a a sleeping pod.
Maybe we can even create a slide and some floral arrangements.
(Laughter)
You know, maybe this is going to foster innovation."
Well, I'm sorry, but this doesn't foster innovation at all.
What this does do is improving employee morale,
so that's a good thing.
Other corporations say,
"OK, let's get back to basics.
Let's get lean.
Let's change our structure.
Let's change it to a flat structure."
The problem with this is that -
and we don't tend to think this way -
corporate structure, hierarchy, command and control governance
is actually a really good thing for big companies.
It's how companies survive.
And so, this doesn't work either.
Now, the smart corporations are saying,
"OK, if end users are the innovators,
and start-ups have access to the end users,
or themselves are end users,
then let's partner with the start-ups."
This is the opportunity that I want to tell you about.
And this isn't a small opportunity.
This is a big opportunity.
Start-ups need to learn to work with corporations,
and it's hard.
They need to learn a new language, how to speak corporate.
I constantly have start-ups calling me and saying,
"Hey, can you connect me to C-level executive X
at ICICI Bank?"
And they think a phone call is going to generate some kind of innovation.
The truth is, it's going to take two months of planning
to create a pilot program to work with a corporate.
So there's this new talent that start-ups need to learn.
They need to learn how to speak corporate and work with corporates.
For corporates, though, it's more challenging.
They have to change their culture.
They need to become more open, and they need to be less territorial.
And after that, they need to provide tools,
and they need to empower start-ups.
Over the last three months,
I've been traveling across three continents
and I've met with about 100 start-ups.
And there's one notion that continuously surfaces,
and that is the notion that start-ups are at war with corporates.
And if there's one thing to take away from this,
I want you to take away that this is not the case.
This needs to not be the case.
There are the exceptions.
There's Airbnb taking on the hotel industry.
There's Uber taking on the taxi industry,
but these are the exceptions.
Start-ups need to think differently,
they need to be the enablers,
and they need to be the collaborators.
The corporates already have this appetite.
I met in South Africa with a young man named Brian.
And he said to me,
"Adrian, I'm going to provide crop insurance
for all the rural farmers in Africa."
And at first I thought, "OK, he's one of these guys."
"How are you going to do this, Brian?"
He said, "I actually already have a partnership
with the South African National Space Agency.
I have a partnership with three national insurance agencies.
The agent doesn't even have to go to the farm,
and the farmer doesn't even have to file a claim.
It's all handled by satellite imagery."
So this is a perfect example of how this new wave,
this new era of innovation will happen
and needs to happen.
So let me leave you with this.
Never before in history
have multi-billion dollar, global corporations said to start-ups,
"Come into our home.
Use our resources.
Access our data.
Trial your products on our clients."
This is an unprecedented opportunity.
Thank you.
(Applause)