Can Porsche launch startups, and should they?
Porsche is doing something interesting in the market. While most automakers dabbed into startups with hackathons (#killmenow), mostly failed or underappreciated intrapreneurship programs, and plain venture investment, Porsche is getting to the next step. They aim to launch six real startups within the next three years in partnership with the U.S. venture fund UP Partners.
If you're unfamiliar with how the industry interacts with startups, this probably sounds like business as usual. It's not, though. Despite all the bravado, very few corporations managed to excubate profitable and scalable startups out of their core business (as I write this, zero examples come to mind). Now, I can see quite a few things that could go wrong with all this, starting with the fact this will be a first for UP Labs – the branch of UP Partners that is kicking off this design studio approach.
But most importantly, I find the final step of the program curiously... wishful.
You see, the partnership between UP and Porsche is about finding a few innovation hot spots in the mobility market (easy), onboarding entrepreneurs to solve the problems in a startup format (tricky), and acquiring back the startup within Porsche (what?).
And again, if you're unfamiliar etc. What seems quite complicated is that if a startup succeeds at solving key problems that a corporation currently has, it becomes an overnight direct competitor of the automaker. Or at least of one of the automaker's main business units. What do you think happens when the automaker buys back the startup? Corporate antibodies kick in and dissolve the foreign body – this is real business as usual.
In a perfect world, this kind of issue can be solved in many ways. What makes me cringe a little bit is that UP Partners is a very US-centric platform. Their motto: "Investing in companies that make you say Hell Yes!" (sic). Usually, a consistent recipe for critical misalignments when dealing with EU executives. My daily reminder that as competent and powerful as you can be (both UP and Porsche being rockstars in their own field) when dealing with innovation, culture is always a bitch.
In contrast, I find the way the DB (Deutsche Bahn) manages its open innovation program way more practical. They just set their different departments as internal customers of their startup program from day one, reducing as much as possible the culture gap. Of course, I'm probably reading into all this way too much. But at least it's a good way to share with you how much I've learned to be extremely cautious about cultural gaps and planning for them from the get-go.
