Eugene Borukhovich is global head of digital health and innovation at Bayer, the German drug maker. He’s also an entrepreneur-in-residence at Personal Health Solutions (PHS), an investment firm located in Amsterdam with a focus in the emerging market space of consumer health and well-being. Borkhovich was a keynote speaker at a Digital Health & Medtech conference in Utrecht, one of seven conferences that took place during StartUpFest Europe in the Netherlands Sept. 25–28. The Innovator interviewed him after his talk.
Q: How do you work with startups?
EB: We pivot the program with the market. Grants4Apps was launched five years ago when we literally gave grants for apps. Year two we pivoted that into an accelerator program and invited startups to submit proposals. We were initially very focused on specific challenges but at the time did not yet have a trusted brand. We then widened our search to include novel software, hardware, technologies, or processes that can be applied to particular areas contributing to improved health outcomes or pharmaceutical processes. This past year we invited all to submit but gave a priority to our challenges and therapeutic areas. The only thing that is constant is change.
Q: What’s new this year?
EB: Every year we talk to many startups and they tell us it is not about the chase for capital but rather ‘how do we acquire Bayer as a customer?’ So we introduced a new program called Dealmaker. We have 30 plus different challenges that we outlined. We match pre-selected more mature startups with each challenge. We whittle it down to a few finalists and we fly those companies to Berlin to acquire Bayer as a customer. They present to the business units behind each challenge. Our goal is to get a letter of intent for the finalists the day of their presentation. It’s a stretch. We are trying this for the first time in a large organization. Under a worse case scenario there will be a solid follow-up after that day but in the best case some of the teams will get a letter of intent that same day.
Q: How do you get Bayer to innovate internally?
EB: We work closely with our corporate innovation team. We set up co-working spaces for people within the company and many of these individuals told us ‘we want to get involved.’ In parallel, about two years ago we launched an internal program called 5×5. The idea is to put out a challenge and have five people from different locations and different disciplines who think differently get together for a five week program and solve the challenge. Each time we publish a new challenge we get 20 to 50 applications from around the world within Bayer. We do about 10 of these a year. So think about this for a moment. Some 500 people in the organization apply annually to take part. After five weeks participants present a prototype or the model to the business unit sponsor. We have filed some patents that came out of this program as well as some new businesses being launched and commercialized.
Q: Have your innovation programs brought about real change?
EB: Startups is only a part of it. It is about a different way of working. This is not unique to Bayer but any large corporation is meant to execute on an existing business model, so change is hard. Companies like to hide behind the process, to say ‘we have always done it this way.’ So they need incentives and KPIs that show that change is going to improve things because any change is going to have an impact on existing KPIs. You also need commitment of the board and management to continue investing in innovation.
During the 15 months I have been here and the 153 years Bayer has been around, the company has continuously been innovating and moving and shaking so there is no concern, it is just working through that process where some of the bottlenecks are.
Q: How do you remove the bottlenecks?
EB: Just like a startup you have got to believe and to push and persevere by pressing the right buttons or sometimes the wrong buttons. The launch of the grants4apps program and everything included in the program today required climbing mountains, including the kickoff events.
Q: How do you measure success?
EB: Somebody approached me recently about setting up a corporate accelerator and said he was looking for a ROI within 18 months. I told the guy he might as well resign today. The point is that going into this you have to measure the ROI in terms of how many people do we touch within Bayer to get involved and engaged to become champions, to really push the envelope. The second part is how do we help these startups? Its not about our investment, it is about helping these passionate entrepreneurs to scale and hopefully make an impact to our end customers and Bayer.