Maria Luisa Silva is global head of go-to-market at SAP Startups Focus, a startup acceleration program launched by the German software giant, which sells process running software to two-thirds of the world’s largest corporations. Her responsibilities include accelerating premium technology startups in the areas of Big Data, IoT, machine learning and artificial intelligence, blockchain, predictive and real-time analytics. Silva recently spoke with The Innovator about how to build an ecosystem of open innovation, one startup at a time.
Q: Until SAP purchased Business Objects in 2007 SAP was widely dependent on in-house innovation. Today it is actively working with many startups. Can you tell us a little about the company’s transformation?
MLS: We started later than Microsoft, earlier than IBM and way earlier than Oracle. The transformation really started with our first relevant acquisition — Business Objects — and then continued with the invention and release of Hana [a platform that delivers in-memory computing database technology to allow the processing of massive amounts of real-time data instantly.] It is the strategic direction of our company and board of directors to evolve our core solutions to run fully on Hana.
The SAP HANA technology, together with the cloud platform, represent key pillars to accelerate the journey of the digital transformation of our customers’ businesses. The possibilities to rethink existing businesses and create new businesses around the technology are nearly endless. SAP, aware of the infinite possibilities, took the decision to expand our reach, by creating Startup Focus as a programmatic approach to building a new ecosystem of startup innovation that can extend our company’s capability. This is why startups and partners are so important to SAP.
Q: So how do you build an ecosystem of open innovation, one startup at a time?
MLS: We started our program five years ago, in mid-2012, and within that time frame over 6,500 startups have registered to be in our program. Out of those, over 1000 have actively been accepted and have worked with the technology. We provide them technology and technical support and guidance in terms of a solution architecture but we don’t code for them. We supply them with assistance and guide them through, telling them about best practices for solutions according to the use case. Today, the program doesn’t offer office space, we work with the startups virtually. Our program works in main regional hubs, Europe, U.S. (Palo Alto) and APJ (Bangalore). The program is free for startups: no fees, no equity.
We mainly work with seed stage or and/or early stage companies that potentially might have done one or two pilots but have not yet found a strong technology platform to deploy and have not yet scaled up their companies. We know that failure rate of startups is high, not all will succeed ,so we are demanding upfront on the selection so we can dedicate our scarce resources to those we believe have a good chance.
There are three phases to our program: first we focus on finding the right startups to onboard. The startups that have been accepted enter the development acceleration phase, where a specific team subset provide the technology, keep track of their progress and guides them. Once they build a minimally viable product (MVP) there is a validation step phase and, when successful, they move into a the go-to-market phase. More than 300 startups in our program have completed an MVP and their solutions are commercially available in the market.
Q: Are these MVPs that have been developed into products bundled with SAP’s products and offered to some of your 320,000 clients?
MLS: Some of the program’s startups solutions are at a next level of collaboration with SAP offerings. For example, Celonis, a process mining company, has a solution that drove the creation of a new category in [analyst firm] Gartner’s market analysis. Process mining is the ability to apply a multilayer X-ray on the processes a business runs to provide real time insights about the company’s effective operations and execution, enabling performance analysis and anomaly detection, but also an impact analysis on desired changes, adding value to solutions that are being commercialized. The technology is complementary with SAP’s offerings so Celonis’ solutions are currently being resold directly by SAP, which has positively impacted their acceleration and growth path.
Q: Has SAP acquired some of the companies in its startup program?
MLS: Some of our startups have been been acquired by SAP, for example KXEN now fuels the predictive analytics suite of SAP. Many more have been acquired by customers, partners or competitors (Beyond Core, Weissbeerger, blackduck, etc). Nevertheless, acquisition is not the main goal of SAP, but rather the exception. The program aims to foster the growth and success of a fully blown ecosystem of open innovation that leverage SAP technology to accelerate and expand the reach of digital transformation beyond the boundaries of what SAP is doing directly. Together we deliver innovation with purpose.
Q: You won first prize in Europe’s Corporate Startup Stars awards in 2017. What was it about your program that impressed the judges?
The judges reasoning is not available in detail but we believe that we have diverse key strengths. We have an open innovation approach, together with a level of dedication and engagement with the startups, rarely seen in the corporate world. We go beyond the theory and the technical aspects, helping with business models and strategy to accelerate the startups, while exposing them to our installed base of customers. SAP has also created a dedicated enterprise market place where startups and other more mature independent software solutions can gain exposure called the SAP App Center. Lastly, we provide the startups we work with access to internal and external VC networks for funding opportunities appropriate to the maturity stage of the startup.
Q: What advice would you give other big companies who are attempting to work with startups?
MLS: Nurturing innovation requires the right mindset and open collaboration. Especially when it comes from the outside. It requires time. With startups, It’s not about pushing, it is about hand holding in order to get their innovations into your enterprise ecosystem and their target markets.Many corporates have started startup incubation and acceleration initiatives, to them I would say: Collaborate with peers and partners that have the experience (we exchange and collaborate with many of our customers’ startup initiatives), keep the initiative isolated from the influence of day to day business (so you can accelerate on innovation) and then act by taking swift steps forward to test/adopt the innovations you breed.