A sizeable US-based energy company sought ways to do innovation scouting that attracts the best start-ups. But, they wanted to keep the number of candidates manageable.
They were considering three methods:
- Publish their needs on challenge listing sites and open it up to anyone and everyone. The problem is that they still surely miss start-ups. And they have to sort through a ton of applications, many of which are not relevant or attractive.
- Hire a consultant to do research and narrow applications down. It might solve the problem, but it can be time-intensive and expensive.
- Curb the list themself. Unfortunately, the energy company has a small innovation team, and they don't know how to best do it?
They asked us how we would solve this puzzle?
Our answer: Do the work yourself but use a filter.
What do we mean by that?
The aim is to make quick yes/no decisions on start-up candidates with imperfect information. And filter out the startups that really deserve consideration.
There might be three different situations. See the above picture.
Let’s assume you seek a start-up to solve a problem for you. And you want to buy their solution.
If you can define the problem, you can also set the solution requirements.
The initial filter is straightforward: Does the start-up’s solution match your requirements for at least 80%?
So, you screen start-up candidates on solution proof.
Let’s now assume you want to tackle a use case or a challenge through, for example, joint NPD.
You know where you are today, and you have a pretty good idea of where you want to go, but you recognize it’s uncertain. And so you’re ignorant of the best solution.
The discriminating factor for challenges is to look for domain knowledge.
So from the long start-up list, choose the ones you believe demonstrate that.
Explore new routes
Let’s now assume that you want to build resilience as the outlook of your company or industry is unclear. And you seek access to new technology, products, IP, or talent that would be too slow to grow organically.
You know where you are today, you might have a vision, and you anticipate many decision points that will change your path.
The initial filter then is to look for compatibility.
So, select those that stand out based on stamina, the founders’ backgrounds, and the company’s reason for existence.
The above characteristics make the common wisdom about start-up scouting both incomplete and misleading.
Matching start-ups is two-sided. It cannot be gauged from a spreadsheet alone.
To speed up the selection process, companies are advised to first focus on what is really important and make an initial choice. And then build relationships with the selected start-ups one on one to find out more about them. And ascertain the possible fit.
With Scoutely’s templates, you can do just that at scale.
We’d love to show you how it works. Contact us for a demo. No strings attached.