When rivals team up

business strategy business people business dealIt may be trite but it’s true, says Karen Lawson, chief executive of corporate startup accelerator Slingshot: “If you work together, what you can achieve is incredible.”

The Australian tech company two weeks ago launched CoVentured, a kind of dating app to help large corporations and startups connect around innovative projects. 

Slingshot itself has been providing this service since 2013. Most recently, it helped Qantas develop an in-house startup accelerator program to innovate across the business.

The launch of CoVentured introduces the concept to many more organisations. Slingshot has invited any startup to create a profile on the platform for free, while Woolworths, Australia Post, Westpac, Accenture, Optus, Spotless and Salmat are among the large corporations already on board.

“They’re perfectly yin and yang, what one side has, the other lacks,” Lawson told IRW, explaining why she thinks large corporations and startups have so much to gain from working together.

“It’s like a good marriage – opposites attract. Harnessing and celebrating differences actually makes you stronger.”

Slingshot is not the first company to back collaboration in the face of a challenging business environment, and with retail insolvencies stacking up, some leaders say the approach is the only way forward.

“I think the Mexican billionaire Carlos Slim said it best. ‘In this new wave of technology, you can’t do it all yourself. You have to form alliances,’” Paul Greenberg, chief executive of the National Online Retailers Association, told IRW.

Greenberg sees a variety of partnership models occurring in the retail landscape today: big and small companies teaming up, ‘friends’ forming alliances and traditional competitors – or ‘frenemies’ – coming together for the benefit of the customer.

“Zappos is an example of the ‘frenemies model’. If you search for a pair of shoes that they don’t stock, they’ll refer you to a competitor that does,” Greenberg said.

“It’s the ultimate leap of faith to break all the rules and put the customer at the centre. Other retailers are preaching customer-centricity from the pulpit, but they’re not living it.”

According to Greenberg, the internet and social media have opened the floodgates to an unprecedented amount of information, which consumers are grabbing with both hands. This has shifted the balance of power away from retailers.

“Consumers are well and truly king, and retailers are in a position where it’s more about service,” he said.

A new way of thinking

This is the idea behind Innit, a Silicon Valley-based company that helps people plan meals, shop for ingredients and prepare food all in one place.

Set to launch in the United States later this year, the platform will bring together grocery retailers, food manufacturers, whitegoods manufacturers, meal kit providers and others to create an “operating system for the kitchen”.

Speaking at Inside Retail Live in March, Innit chief operating officer, Josh Sigel, said the food industry is ripe for cooperative disruption, since no single player offers everything an at-home cook wants: recipe inspiration, ingredients, cooking tips, nutritional information and more.

But Sigel recently told IRW that some sectors have been more open to this idea than others.

“Early on, there was a lot of concern from whitegoods manufacturers that we would control the entire customer experience and they would just be a black box to heat and cool things,” he said.

In contrast, meal kit providers, which struggle to maintain visibility after the delivery has been made, have been quick to sign up to the platform.
“We can actually connect the information in the meal kit with the connected appliance. Because we know exactly when a package with a chicken breast is going to show up, we can develop algorithms and cooking methods to be pre-programmed into the appliance to ensure an optimal result,” he said.

Sigel likens the Innit platform to an online marketplace, where retail companies and brands have learned to sit side-by-side with competitors because that’s where their customers are.

“When it comes to ‘co-opetition’, there’s value in retailers indirectly working together so consumers get the best experience possible. I believe consumers will see that and reward those that are trying to enhance their experience the most,” he said.

“The best example I can give is Instacart in the US, which works with most of the grocery retailers. If you’re on the Instacart platform, consumers are exposed to your brand in a way they weren’t before.”

Sigel said he could not share the details of specific retailer and manufacturer partnerships yet, but IRW understands Innit is positioning itself as a global platform and targeting overseas markets, including Australia, in addition to the United States.

Sigel said the company is working with ThoughtWorks to help bridge the gap for partners that don’t have the tools or technology in place to make use of the platform.

But even though companies like Slingshot and Innit see corporate cooperation as an opportunity, Greenberg said many retailers still resist the idea.

“We have a very siloed mentality across a lot of industry sectors in Australia,” he said. “My intuitive sense is that it’s because prior to these connected technologies, we were an island and we felt we didn’t have to share because we had things to ourselves.

“We’re getting into the swing of things, but we’ve got to break old habits. It’s not really about technology, it’s about new ways of thinking.”

 

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