Jonathan Hammond is the global head of Unilever Foundry, a program that helps startups link up with the global consumer goods company’s 400 plus brands. He recently spoke with The Innovator about what Unilever has learned from working with startups.
Q: Tell us about Unilever Foundry.
JH: It’s an open doorway for startups to connect with Unilever and for Unilever to be more entrepreneurial and experiment with new ways of generating revenues. The program will be four years old in May. We have launched around 150 pilots with startups during this time in a number of verticals. These pilots have helped us to learn how to better communicate with clients and understand disruptive business models as well.
Q: How does Unilever structure relationships with startups in the program?
JH: We operate under a ‘pitch, pilot, partner’ model. We scout for innovative tech and startups, then we pilot to get to a MVP (minimally viable product ) and try to get to market as quickly as possible. This removes a layer of bureaucracy traditional corporate have and really allows us to experience how the startup ecosystem works. It is a win-win relationship for both. Unilever brings scale, budget and marketing while the startups bring innovation and new go- to-market approaches. These partnerships lead to a great outcome for both parties.
Q: What are the terms? What type of startups do you look for, what is the process for being accepted into the program and do the startups have to give up equity?
JH: Those that are accepted into the program receive $50,000 and the possibility of working in our partnership space but remain separate entities. We have a venture arm — Unilever Ventures — but taking equity or buying startups is not the goal for Unliver Foundry. We are focused on finding long-term partners we can scale across the organization. These are typically stable startups that have raised a round or two of funding and already have a go-to market strategy.
Q: Is the program only about pilots or have you permanently integrated any of the startups’ offerings into your global offerings?
JH: We have gone on to continue relationships with startups in about half of the pilots. In the case of 30 we are looking to actively scale.
Q: What do you mean by “actively scale”?
JH: There is no one size fits all formula. It can mean investment, a continued supplier -client relationship on a global scale, a contractual relationship that will enable the startup to move more successfully across a number of markets or it can mean more heavy lifting. One example is Olapic( a visual content market engine which collects consumer photos and videos from social media sites such as Instagram, Vine, Twitter, Pinterest and Tumblr to help brands and retailers increase sales and marketing campaign performance ). Olapic is now part of the roster for Unilever and we are looking at how we can scale them across our businesses.
Q: Can you go into specifics on a few of the other pilots?
JH: One pilot, which took place in Bangladesh, involved a startup called NextBillion located in our Level 3 250-desk co-working space in Singapore. NextBillion addressed the challenge of reaching rural consumers in Bangladesh. It brings people together via a pop-up movie theatre that shows entertaining mobile content and uses these gatherings to also screen educational videos about good health and personal hygiene and distribute product samples from LifeBuoy and Pepsodent. It is a great way to tap into a market and we are now doing similar pilots in Myanmar and a few other places in Southeast Asia.
Another example is Discuss.io, a startup that connects brands with consumers globally through a video conferencing platform built for conducting market research and gathering insights. We have rolled this out extensively across Unilever because it allows you to form virtual focus groups via webcams and get feedback from consumers in a matter of weeks versus months. This enables to get much quicker local insights than was possible previously, which is hugely important and relevant to Unilever’s brands.
Q: What are some of the key things Unilever has learned about what works and what doesn’t when engaging with startups?
JH: It is important to make sure we are answering a business challenge rather than getting caught up in a particular technology.
As a big organization you have to be sure that to make it easy for a startup to navigate your organization by clearly identifying an entry point.
We have learned that startups can be a complementary to ad agencies and media buyers but they are singularly focused on the technology so we need to use both- in other words we can’t work with a startup in the same way we do an ad agency.
Some pilots involve working in collaboration with ad agencies, a product division and a startup with a different go-to-market approach. For example in France we are working with Skip, one of our laundry detergent brands and Cowash, a sharing economy laundry app. What we have learned from this pilot is there needs to be buy-in from both sides and an understanding from the ad agency partner side as well. There also needs to be a transparent and streamlined processes to onboard the startup.
You need to be clear on the components the startup is expected to deliver, set really clear objectives and describe what success looks like.
It is also important to inspire the internal organization and make it clear that working with startups is tied to a real opportunity.
Q: What are your recommendations to other big corporates?
JH: There is no right model for this. Unilever Foundry is only one part of our external innovation strategy. For us it is about creating a framework that can help these startups to scale so we can demonstrate that their way of doing things really is more efficient and more sustainable than our current ways of doing things in the core part of the business. If we can prove that with an MVP, that is a clear indication that we should engage with these startups on a larger scale.
