Welcome to the 36th episode of Deep Tech Catalyst, the channel by
where science meets venture!Today, I'm thrilled to host Julien Fredonie, Head of Strategic Partnerships and Corporate Venturing Europe & Africa at Honda Xcelerator Ventures!
In this episode, we dive into the mechanics of corporate venturing, offering practical advice on navigating partnerships and strategies to succeed in the deep tech ecosystem.
Key Themes Covered:
🏢 Understanding the Corporate Landscape
🚀 What is Corporate Venturing?
🔬 Should Founders Engage Corporate Venturing Units at Early TRLs?
🧠 Navigating the Complex Shift from Research to Entrepreneurship in Deep Tech
🔄 The Power of a Complementary Team in Driving Deep Tech Innovation
🎧 Prefer to Listen?
KEY INSIGHTS FROM THE EPISODE
🏢 Understanding the Corporate Landscape
Every corporation is unique, having different strategies, capabilities, and contexts, making innovation highly specific to each scenario. What’s particularly interesting for Deep Tech founders when considering corporations are several factors.
Corporations often have robust technical capabilities, which means they generally understand the scientific intricacies.
They can engage in various roles throughout a project, whether as a customer, supplier, technology partner, or joint developer. The nature of this collaboration can evolve over time.
Corporates are typically a good match for Deep Tech because of their patience. When considering technologies like quantum or fusion, which might have a horizon of about 10 years, this timeline isn’t daunting to a corporation.
Challenges For Founders
On the other hand, working with corporations involves its own set of complexities and challenges. One major issue is the pace of operations.
While corporations are patient, this can sometimes translate into slow decision-making processes. Due to their large size, startup founders can find it difficult to navigate their decision-making processes or predict the outcomes of partnerships or investments.
So, for large corporations with substantial resources and capital, it’s crucial to be mindful of the time and focus required from founders.
Establish Strong Relationships, Add Value.
Simultaneously, from the startup perspective, it’s crucial to maintain professionalism and perform the necessary groundwork. Startups must not be overly dazzled by the prospect of partnering with a company they admire, potentially as a customer.
It's vital to ensure that any partnership is logical, adds value, and aligns with the startup's strategic roadmap.
Understanding the decision-making process and potential timelines, which can sometimes be exceedingly lengthy, is essential.
Additionally, founders should cultivate their own networks within the organization.
While they may primarily interact with the open innovation team, who often act as their primary contact, it’s advantageous to connect with other individuals within the corporation.
This is particularly important because of the notable turnover in corporate investment sectors, which tends to be higher than in traditional financial investment. This turnover introduces a degree of risk for founders, making these broader connections within the corporation even more critical.
🚀 What is Corporate Venturing?
Corporate venturing is essentially the branch of a corporation that deals with investments, partnerships, and growth opportunities specifically involving innovative startups and technological breakthroughs.
For Deep Tech founders, identifying the right person or department within a large corporation to initiate discussions can be challenging. Corporate venturing departments serve as a valuable starting point for these conversations.
For instance, Honda Xcelerator Ventures has a team dedicated to external relations. This team scouts for exceptional founders, stays in touch with investors and keeps abreast of upcoming trends, technological advancements, and fundraising events.
The role of our corporate venturing teams extends beyond just facilitating introductions: they help translate and navigate between different corporate and startup cultures, and sometimes even between various international cultures.
When Does Corporate Venturing Come Into Play?
Corporations generally aren’t looking to take on scientific risk, they are more oriented toward addressing engineering or market risks associated with scaling a technology.
So, corporate venturing units get involved when there is some kind of demonstrable proof point, such as a prototype, MVP, or even a rudimentary lab-scale demo.
This refers to any stage from a lab-scale prototype onwards, which could be suitable for advancing to an initial pilot phase. The exact requirements might vary, but generally, anything from a lab-scale prototype is a potential starting point.
Before this stage, other stakeholders like tech transfer or R&D teams might be more appropriate contacts within the corporation. When something tangible can be demonstrated, that’s when corporate venturing departments are most likely to engage.
🔬 Should Founders Engage Corporate Venturing Units at Early TRLs?
Additionally, for founders who are at the stage of applied research and are exploring the validation of their intellectual property and potential market validation in a B2B context, approaching the corporate venturing office can be beneficial.
It’s an opportunity to gauge whether there might be future interest in collaboration.
Founders can inquire whether their current focus aligns commercially with the corporation's goals or if there are other specific departments to engage with for a more suitable alignment.
Generally, for those who are early in their journey, it’s better to leverage existing infrastructures within universities or research institutes. These organizations often provide incubation, accelerator programs, and venturing opportunities, which can offer access to industry experts, mentors, and a variety of perspectives.
The risk for very early-stage founders trying to connect directly with large corporations is that it might lead to considerable time spent with minimal results and insufficient feedback.
This underscores why having something demonstrable, like a prototype, is crucial.
🧠 Navigating the Complex Shift from Research to Entrepreneurship in Deep Tech
Scientists often make excellent entrepreneurs because they are skilled at identifying the essential questions that need to be addressed, which is crucial when navigating the myriad uncertainties of starting a new venture.
Often, scientists express disinterest in becoming founders because they are not motivated by the prospect of financial returns. The conversation frequently revolves around those who are exceptionally successful, but for most, it is more about the impact.
The potential to see one's scientific work translate into solutions for real-world problems—like those in climate change, health, or environmental issues—is usually more compelling than financial gain.
Moreover, there is a common misconception that great science automatically leads to a great product, which is not necessarily true.
A critical question is whether people will pay for it. In today’s world, there is an overload of technology, more than the market can absorb, so it is essential to ensure that the problems being solved are valued and financially viable.
Moreover, the concern about leaving science behind is prevalent. However, when involved in deep tech as a founder or part of a founding team, one does not have to abandon science.
Instead, it is about staying engaged with scientific pursuits while developing additional skills.
While not everyone needs to become adept at sales, being self-aware and surrounding oneself with the right team can enhance the ability to succeed without sacrificing scientific integrity.
🔄 The Power of a Complementary Team in Driving Deep Tech Innovation
Successful teams often exemplify a dynamic combination of expertise.
Typically, they are composed by:
A seasoned professor or researcher who's been in the field for 10 to 25 years.
Then there's usually a younger individual with a business or consulting background who brings skills in business development and fundraising.
The third crucial element is engineering—this role acts as a bridge, translating scientific research into tangible products.
The specific focus of a team can vary significantly depending on the project. However, the most effective teams blend various skills and areas of expertise, and both visible and non-visible diversity are key drivers of performance.
A team composed solely of PhDs from the same academic background may have a strong mutual understanding, but introducing diverse experiences—whether that’s industry experience or different academic disciplines—can significantly enhance a team's capability and perspective.
Before you go, don’t miss our latest Deep Tech Briefing! 💡
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