The new formula of innovation for large companies

Successful innovation processes are those that achieve disruption within an industry as a whole rather than within a single company.

The concept of innovation has gained significant prominence in recent years in the corporate world, although it has always existed in various spheres. Today, due to new technologies, innovation is occurring at such an accelerated pace that companies are struggling to keep up with this rapid rhythm. A new innovation formula had to be sought, which is already being implemented by large companies. To delve deeper into this topic, we interviewed Gustavo Huerta, founder of BlueBox, the largest network of incubators, accelerators, and investment funds in Latin America. Gustavo explains that currently, successful innovation processes are those that achieve disruption within an industry as a whole rather than within a single company. This disruption within an industry entails an open innovation methodology where large companies do not internally carry out innovations. Instead, he elucidates, they utilize startup accelerators as a means to capture the value of entrepreneurs providing external innovation solutions. Thus, by investing in these innovative startups, large companies expand their service portfolios or make internal process changes. According to Gustavo, "having investments in startups allows us to be like a thermometer of what is happening in the industry and thus ensure not to be left behind."

One of the principles of open innovation and disruption is that changes created within one industry affect another distinct industry. An example illustrating this idea is Uber, a company that emerged as an option for generating extra income for those willing to transport people and ended up toppling the hegemony of the passenger mobility industry as it operated with taxis.

How does it work in practice? What BlueBox does is identify an industry, study it to find areas of opportunity, understand its growth and technological development, and assess the industry's current status in Mexico or Latin America to identify the possibility of adding value with startups. ("There are many industries that are quite behind compared to existing technology," Gustavo warns.) Then, together with industry leaders willing to work with this new innovation formula, they select startups that they believe can adequately respond to the challenge of innovating in the sector and begin the investment and training process.

The type of startups selected are those that have gone through an acceleration program, have their business idea operational, clearly understand the market and their target audience, and are capable of specializing in an industry to completely transform it. In exchange for receiving innovation, the commitment that large companies make is to provide the selected startup with an initial sponsorship of $10,000, accommodation, and 4 months of training. This training is essentially mentorship provided by both the sponsoring company, which shares all its knowledge with the entrepreneurs, and additional mentoring sessions with other companies in the industry.

Organizations that have participated in this innovation model in Mexico include Cinépolis, Axtel, Grupo Expansión, the National Agricultural Council, and Volaris, among others. In the case of Cinépolis, disruptive changes have been made in health and video games. This company sought to invest in adding value through services or utilities.