“Partnerships between incumbent players and start ups are the way forward for the fourth industrial revolution to be sustainable in the long term. I’m talking about a model where start-ups use technology to add value to existing players without necessarily disrupting them. Deliveroo does exactly this with restaurants, Gett with taxis and Opportunity Network with corporates and banks”
To talk on the most hot topic AIC Raise had a fireside chat with Mr. Varad Rajan Krishnan, Founder of 100 open startups on 20th May 2020.
Varadarajan Krishna (Varad) is an Executive turned serial tech Entrepreneur and Angel Investor with a track record in a career spanning over 25 years. As an entrepreneur he has been through 5 exits including two IPOs. He is part of a start-up community that has developed products and IP ranging from Embedded Software, BPM, Telecom and Cleantech.
Varad is currently engaged in building open innovation communities worldwide through Induct. He is also involved in a few global Startup programs. Notable among them is the 100 Open StartUps. He is involved in various startups initiatives in India and worldwide as a mentor and Jury as a way to give back to the global entrepreneurial ecosystem.The discussion highlighted the preparation for months or years ahead during this challenging situation to maximise your efforts and increase your output.
Varad has been a hands on practitioner and a pioneer in Open Innovation in India through his organization, Induct AS based in Norway which is a world leader in building connected innovation communities for the past 13 years. Induct AS listed in the Oslo Bourse in Jan 2016 marking the 5th exit and the 2nd IPO for Varad. The Chairman of Induct’s Advisory board is Dr. Henry Chesbrough who is the Father of Open Innovation.
Varad said that for large companies and SMEs the first step to engagement and collaboration with outside of the boundaries of their respective organizations is termed as open innovation. This includes both ideas and IPs coming from outside to inside and from inside to outside. Prior to that organizations followed closed innovation paradigm- which was primarily internal investigation, research, development and engineering.
The logic behind open innovation is that good ideas are widely distributed today and to manage R&D efforts efficiently, organizations should manage their internal as well as latent IPs and leverage what is available outside to fuel the business growth and to get profit out of others.
The biggest hurdle faced by entrepreneurs is the funding from investors as its marks the end of the cycle of validation of the idea or the problem being solved by them said Mr. Varad Krishna.
As the chance of getting funded by an investor is very low – about 1 in 3000 startups get funding, he suggested that instead of meeting with investors; the entrepreneurs can build and grow their startup through customer revenues and to move to next level. Their chance of becoming successful is much higher compared to the investor driven approach and this is the thesis behind the 100 Open Startups Global Movement.
The biggest challenge for entrepreneurs is to build their startup in a effectual manner. As there are many challenges and uncertainties, the best way to grow and succeed is to collaborate with key stakeholders and co-create the future.
He defines the power of collaboration greatly by saying it is not incremental or linear but exponential.
Effectuation as – ”Work with what’s already within your control to co-create the future.”
For more elaborate studies about both the above topics, many books are published by the respective authors and they are available on amazon as well as in other stores.
In between the discussion he introduced a great lady- Saras Sarasvathy who teaches Effectuation at the Darden School of Business, University of Virginia. She was invited as a chief guest for the 12th Annual Oiweek Event to give awards to the Top 100 Ranked startups.
Continuing to the session he effectively elaborated the steps for a successful startup:
- Brilliant idea
- Large market for it
- Business plan
- Raise money
- Build and grow the venture
- Go public or sell
- Go off to the bahamas
He believes in the power of collaboration and co-creation, such that even if we know we have small scale, by teaming up with a big company, we can reach new dimensions. Another, he believes in Innovation which brings you scalability, one needs to create their blue ocean strategy which makes them unique in the market.
One of the best examples of collaboration and co-creation according to him is, Google in 2008 acquired Andy Rubin’s idea of Android OS which was used by him in Cameras. But we all know today that it is the most widely used OS for handhelds – in almost every 8th device out of 10th in the world.
In closing, he listed 4 networks /programs that are part of the Open Startups Global Movement. They are 100 Open Startups for Top 100 Annual Ranking, 100 Open Techs for Ranking the University Tech and IPs, 100 Open Corps Network for Ranking Corporations, and the 100 Open Angels Network. All these could be leveraged by innovation ecosystems worldwide like the incubators, accelerators and other Govt initiatives for startups that can lead to sustainability.
Later on while questioning, he said that adopting a disruptive technology is difficult at times, but for one to be an expert one needs to constantly look out of the latest developments in technology.
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