Open innovation services: Where to get started

If you’re doing research on open innovation, you may find yourself in one of these situations:

• You’ve attempted multiple innovation programs in your company which haven’t led to the results you were hoping for.
• You want to experiment with new technologies but aren’t sure where to start.
• You don’t have the internal resources to get started with open innovation.

I started my career in innovation by working at the Swiss Stock Exchange, SIX, where I was in charge of leading the open innovation programs. Our work was a success, which is what led me to eventually start Tenity and help other corporations with their innovation. 

At Tenity, we help corporates and startups embrace open innovation and have supported companies like UBS, Julius Baer and SIX learn about, collaborate and invest in startups.

In this article, I’ll be exploring:

• How we define and think about open innovation at Tenity
• Where to get started with open innovation
• What are some open innovation challenges and what does success look like?
• How we help corporates with open innovation
• An example: how an Open Innovation program led to a collaboration between SIX and Deedster

Note: interested in learning about how to implement open innovation? Reach out to us to see how we can help you. 

How we define and think about open innovation at Tenity

Open innovation happens when you open up your strategy to a third party, whether it’s other companies, creatives, research professionals and other external sources.

Henry Chesbrough, a professor at University of California, Berkeley, coined the term “open innovation” and defined it as a more decentralised approach to innovation. The whole premise behind open innovation is that real innovation happens by opening your company to the outside world. Sharing more information and collaborating will lead to an increase in chances of success and additional opportunities that you wouldn’t get otherwise.

The idea of open innovation has become popular in the last few decades specifically because of the internet. The internet democratised access to information and has opened up a lot of new pathways to communication, technology and business growth. 

At Tenity, we define the open innovation methodology as opening up your company to startups. Why startups specifically? Because startups are made of people who are 100% dedicated to a specific business case, idea or problem to solve. 

Startups are also used to working with emerging technology, which larger companies are more likely to struggle with. Startups are also usually closer to the customer, are faster and can more easily see the perspective of the customer. 

We define a successful open innovation initiative as a situation where a corporate collaborates, establishes a partnership, acquires or invests into a startup. 

Where to get started with open innovation

In order for open innovation to work, your company needs to be open to as many of the right people as possible. This is usually via an ecosystem.

There are two main ways, as a corporate, you can follow through with open innovation: by building your ecosystem with partnerships, or by plugging into a separate, ready-made ecosystem.

The best, of course, is to do a bit of both. But here are the differences between each one.

Build your own ecosystem via partnerships

Traditionally, innovation happens through an in-house Research and Development department, which is a separate unit within the company dedicated to innovation. This is what we now call “closed innovation”, since it means you’re only involving company staff and are using internal resources to develop. 

If you’re looking for ways to transition away from a closed to open innovation process, one option is to start building your own partnerships. That could mean a lot of different activities:

• Reaching out to companies or institutions that you would like to get their perspective on.
• Collaborating with a university or school to get students to work on your company’s issues. This is what NASA did by collaboration with TopCoder and The Harvard Business School to help build mathematical algorithms to support future missions.
• Setting up a platform that allows people to collaborate and offering a prize for good ideas. GE did this with its First Build platform, with a focus on new home appliances.
• Crowdsourcing customer feedback. LEGO did this by allowing fans to design their own LEGO sets on the website. The best ones are then created as a new product and the fans are rewarded.

There are many different ways to start building your own innovation ecosystem, but there is one thing all of these have in common: you have to build these from scratch. 

When it comes to specifically working with startups, building your own relationships isn’t always straightforward. The best startups are often hard to get access to, and few startups are ready to work with the corporate business model. Also, you’ll need to spend a lot of resources on researching and understanding startups, as well as building up the skills internally to understand the critical factors to picking the right startup that can help with value creation.

Although it’s important to build your own relationships and talk to startups, we believe it makes sense to do this in conjunction with a third party ecosystem.

Use a startup scouting platform

Since a lot of open innovation comes down to increasing the number of people who work on your problem, another solution is to join a platform that puts you in touch with startups that you can vet and talk to.

Startup databases are platforms that you can subscribe to for a monthly fee. There are usually thousands of listed startups, and you can usually filter with criteria. But there are a few issues with these platforms:

• Startup databases have self-reported information. That means that the startup self selects the information it wants to submit. This makes it hard to get the full picture of the startup, since you’ll only find positive information. 
• You’ll need a lot more context. Via the database you might get a good overview of the startup. But to make a decision on whether to partner with them, you’ll need expert insight so you can validate their credentials and understand the context behind the information.
• You still need someone who enables the collaboration. Picking the startup is just the first step. You also want to make sure the startup is ready for collaboration, has the right mentality and tools in place.

Startup platforms can be good to get an overview of the market and see what type of startups may be interested in working with a corporate. But because of the drawbacks mentioned above, they can only serve for a small part of the process. You’ll still need to do a lot of the legwork to get a partnership going. 

Which brings us to the third approach…

Work with an ecosystem like Tenity

We set up Tenity partially because of the issues mentioned above. When we worked at SIX, we could tell that the corporate didn’t want to spend the resources building their own partnerships or using databases that only did part of the work. 

At Tenity, we operate as an ecosystem that specialises in helping corporates with innovation. How do we do it? We see innovation through the lens of three pillars:

Learn about innovation

We help corporates learn about the market, what innovation looks like and about specific technologies via:

• Community events.
• Conferences.
• Executive events.
• Startup database.

Collaborate with startups

We help corporates collaborate and work with startups by:

• Running our own corporate incubator programmes.
• Helping corporates run their own corporate accelerators.
• Deal flow sessions and co-creation workshops.

Invest in startups

We help corporates get results from innovation by helping them invest in the right startups. They can do this by:

1. Join our investor community and become part of the ecosystem.
2. Become a Limited Partner in our fund by investing in our early stage fintech fund

‍

There are a lot of different facets to what we do, but the key is that it’s all focused on enabling open innovation. A lot is happening in the background to help improve this ecosystem:

• We receive 2,500 applications from startups every year.
• 270 startups have graduated from our own programs so far and more graduate every year.
• We’re present in 6 countries.
• We’ve syndicated $370M across our startups.
• We have 200+ mentors.

Luigi Vignola, Head Markets at Julius Baer, explains it perfectly:

“It’s a bit of a laboratory for us. We can throw in questions and see if somebody can come up with a smart solution without using too much of our own resources, which are largely committed to the day-to-day processes.” 

We essentially operate as a playground where entrepreneurs and corporates can experiment and build tangible use cases. 

This model has the best of everything mentioned above: as a corporate you build relationships with high quality startups and partners without having to spend huge resources on finding them, and you also get access to a database with thousands of startups. 

Not only that, but you get to work with a Tenity team that has years of experience helping corporates collaborate with startups and who know what successful innovation management looks like.

If your aim is to enable true open innovation, then we believe it makes sense to partner with an ecosystem like Tenity, while also building your own relationships and ecosystem at the same time. 

What are some open innovation challenges and what does success look like?

There are two key challenges to implementing open innovation services successfully:

1. You have to be willing to open up your strategy to a certain extend.
2. You need to have the right culture in place.

The first challenge happens because in order to implement open innovation you will need to disclose certain private information about your company and be transparent about what you’re working on. You can’t keep the strategy secret. This can be challenging if your company has a culture that is very competitive and worried about competitors. 

But the fact is, if you want to benefit from an outside perspective, you will need to open up what you do internally.

The second challenge is culture. It’s common to see employees at large corporates believe that they have all the necessary capabilities internally, and that they don’t need outside support in order to run innovation programmes. But it’s especially important in a large corporate to have the right mentality of open mindedness. To truly benefit from open innovation, they need to have the right culture to bring people from the outside in. 

Open innovation may seem risky, but from our perspective the benefits outweigh the risks.

What we believe successful implementation of open innovation looks like

In order for open innovation initiatives to work, it’s important to have a playbook or framework so it’s part of your innovation system. In other words, it should not be opportunistic: it should be part of your every day. 

And in terms of what success looks like, we see open innovation as a success when:

• You create new business long term.
• Improve existing business with technology.
• You help create financial impact.

How Tenity helps corporates with open innovation

We’ve explained above what it is that we do in the world of open innovation. But what is it specifically that allows us to succeed and help corporates with innovation? 

There are two main factors in our work:

1. Our expertise and experience.
2. How we bridge the corporate and startup world.

You can rely on our expertise and experience to ensure you’re getting results

As mentioned above, Tenity was born from the world of corporate innovation. That means that we know how innovation works in a corporate and we’ve also experienced successful innovation firsthand when working with corporates like SIX, UBS and Julius Baer.

This experience and open services innovation over the years means we know what a good corporate and startup collaboration looks like. We run two of our own incubator programmes every year, in addition to bespoke accelerators focusing on open innovation challenges. We’re also constantly adding startups to our database since we’ve been scouting for startups for almost 10 years.

Finding the right startups is more of an art than a science, and we’ve been developing that art for years. This has allowed us to develop a gut instinct of whether a startup would work well with a corporate. We’ve seen many successes, including UBS collaborating with Yokoy, Julius Baer with vestr and SIX working with Deedster. 

Read more: Startup scouting: what's the right way to do it?

In addition to that, we have a strong focus on financial services. Whereas other innovation ecosystems will work across many verticals, we only do fintech and financial services. This means our expertise and experience is a lot more in-depth, and for example, when we do a fintech accelerator program for a financial institution, they can access 200+ fintech only applications – rather than 200 applications with a few fintechs. 

This level of experience and expertise means we’ve seen what a lot of the challenges are and know how to overcome them first hand. 

You get to work with startups that are ready to collaborate

One of the key challenges corporates face when collaborating with a startup is the clash of culture and mindset.

Often, startups aren’t ready to work with corporate and don’t have the right processes in place. For example, a corporate will have a lengthy procurement process, or will send through a contract with 300 pages – which a startup is not ready for.

These clashes lead to unsuccessful collaboration and open innovation that never happens.

At Tenity, we have the right tools in place to enable collaboration between startups and corporates:

1. With corporates, we’ll work closely with an internal champion who will help lead innovation and collaboration. We encourage the startup to start small: first a POC, then an MVP, and then collaboration. We also will talk to various stakeholders to help manage their different interests.

2. With startups, we do workshops and a lot of coaching on what to have prepared when partnering with a corporate. 

The best way to understand this is to see how we’ve done this with a real client:

An example: how an Open Innovation Program led to a collaboration between SIX and Deedster

We’ve been working with SIX since Tenity was first started. Now, whenever the corporate is looking to pursue any “outside in” initiatives they work with Tenity. 

In 2022, SIX bLink, the Swiss open banking platform from SIX, partnered with Deedster, a climate fintech company from Sweden. The partnership resulted in building an innovative CO2 footprint calculator for Swiss banking clients to offer their customers. Let’s look at how this innovative product was brought to market. 

bLink is an open banking platform that SIX developed to connect banks and fintech companies in Switzerland. With this platform, companies can get access to accounts, complete payments and do wealth management. 

Deedster is a startup that focuses on increasing the awareness of climate impact via specific technology, with employee engagement, SMEs and retail.

The objective of bLink was to bring innovation to their clients by integrating new API services. With ESG becoming more of a priority, it made sense for them to work with Deedster, allowing their clients to get a CO2 footprint based on their transaction data.

Deedster at this stage had already worked with nearly 80 banks and corporates across Europe. Partnering with bLink opened up a new market to them. 

Here’s how it worked in practice:

1. Selection: bLink, since it is part of SIX, worked with Tenity to scout and find startups that offered innovative solutions with APIs that would support SIX’s customer needs.

2. Facilitation: Deedster joined Tenity’s Open Innovation Program that we were running on behalf of SIX. This allowed bLink to explore Deedster’s product. After a first pitch event, Deedster was selected and the collaboration process started.

3. Collaboration: together, the two companies developed a CO2 footprint calculator for Swiss customers. The collaboration led to a successful Proof of Concept that used anonymous real time data.

As Sven Siat, Product Lead for bLink says:

"The cooperation with Deedster is a great example of how we want to incrementally set up a marketplace with innovative API services on bLink. With Tenity, we profit from their deep expertise in scouting attractive new providers.”

Fast forward a year, and bLink customers can now access their CO2 footprint just via their transactions. bLink is able to add value to their customers, and Deedster benefited from accelerated access entry. 

The collaboration between the corporate and startup is a great example of how being part of the same open innovation ecosystem can lead to innovative products that act as a win-win.  

You can read more about what each company learnt from this collaboration here: Driving sustainability through Open Banking​‍

Working with an ecosystem is a great way to enable open innovation initiatives

As we’ve explored in this article, the best way to develop your open innovation strategies is to be part of an ecosystem that can put you in touch with the right startups, enable collaboration and be constantly scouting for the right people.  

If you think working with an ecosystem would work for you, reach out to us to see how we can help you. 

‍

‍