Maurizio Rossi is co-founder and co-CEO of H-FARM, a global innovation hub on the outskirts of Venice, Italy that combines innovation, entrepreneurship and education. The campus, which is built on farm land, fosters the creation of new business models and helps large corporations with digital transformation, strategies and open innovation. Over 600 people work and about 900 study at the H-FARM campus and related schools. An academic study program that ranges from pre-school to post-graduate masters is part of H- FARM, as are corporate training programs attended by executives from companies such as Henkel, Gucci and Generali. H-FARM claims to be among the first in the world to adopt a model that brings together investments, business consultancy and digitally augmented educational programs. Thanks to a network of partners and investors established in its first thirteen years of operation, every year H-FARM analyzes and evaluates over 1000 projects and selects the best ones to enter different programs.
Following careers as a ship captain and as a champion in power boat racing, Rossi worked at Rossi Group, a family business focused on luxury goods, sportswear and newspaper publishing. His role was to help internationalize the business through licensing deals and partnerships. After the footwear branch of the family business was sold to LVMH and the publishing arm was also sold off, Rossi, together with his partner Riccardo Donadon, co-founded the listed holding company that owns H-FARM. Rossi is also an executive member of the Vatican Art & Technology Council and a member of Northwestern University’s Kellogg Innovation Network, a global innovators community. He recently spoke to The Innovator about H-FARM’s role in helping European corporates embrace digital change.
Q: Why did you create H-FARM?
MR: I spent about 25 years in the fashion luxury and sport apparel industries, setting up companies supporting the distribution of the family business’ products to a bunch of brands internationally. My partner Riccardo founded in the late 1990s one of the first digital agencies. So, we are both entrepreneurs. We founded H-FARM based on three assumptions. The first assumption was the impact technology was going to have on all of our lives. The second assumption was that the speed of exponential change was going to be very disruptive. And the third assumption was the new digital generation of entrepreneurs, who can leverage technology in a very natural way, would be the driving force. The development of H-FARM has been an organic evolution that began with understanding the market, learning from the ecosystem, trying to adapt to the evolution of the overall ecosystem and also trying to understand how we could fit into a global ecosystem and what sort of model or positioning we should adopt. From the beginning the idea was to be much bigger than a farm house. The dream was to create a village.
Q: How has H-FARM evolved?
MR: In the first two years we acted as an incubator being supported by an investment arm. Then we shifted the way we work to cover the four stages of the startup: from seed to growth stage and we took equity stakes. Some €27 million euros was invested in 120 startups, some seed and others in growth stage. We have had seven exits, which has helped us recoup our investment. Today we have about 40 active companies in our portfolio. But we decided — back in 2014 — that the incubator and accelerator models alone do not fit with the promise to create a large infrastructure so we decided to revise everything and start the process to IPO [initial public offering]. We needed to be able to have H-FARM listed to make the dream come true and redesign the entire model. Prior to the IPO we had a stable revenue of a couple of million euros a year. Today three years after the IPO, we have revenues could reach a gross €65 million from innovation-as-a-service and education. We knew that all of the knowledge in dealing with the startups, in supporting the startups, could help corporations, especially because Europe is not a natural ecosystem for high tech like in Israel or Silicon Valley. The majority of the economy of Europe is based on traditional or low-tech corporations. These corporations need to embrace digital transformation and engage with startups. The big challenge is to start the transformation process and through new processes create the change. Most traditional corporations don’t have a CTO, they have a CIO, and they need to implement and integrate new technologies and embrace open source and open innovation. The C-Suite and middle management need to understand and adopt innovation culture. And they need to connect with startups but they cannot deal with startups if the people inside the corporation are all old-school. So three years after the IPO we decided to create a package that would help corporations with all phases of their digital transformation. Then we decided to add academic programs and students into the mix. This was the final box we ticked that brings all of the things together -entrepreneurship, innovation and education. Today the campus host over 600 employees and the plan is that by 2020 we will have 3,000 people on campus — about 55% students and 40% business. Already we have about 20,000 visitors per year attending workshops, conferences, private events and co-working spaces for corporates. The diversity of people on the campus is key. H-FARM’s main asset is people. The H in H-FARM stands for human. It is a platform which is driven by generational shift and technology impact and the outcome of this platform is innovation.
Q: What specifically does H-FARM offer corporates?
MR: We offer programs that address the different problems that corporates face with digital transformation. Some courses are for the C-Suite and board members and focus on strategic issues, other programs address open innovation and we offer some that focus on how to build accelerator programs and how you recruit startups and work with them on pilot projects.
Q: What advice do you have for big corporates?
MR: We tell corporates that they have to create an agenda for their transformation that spans five to ten years. It doesn’t matter if you are in insurance or luxury goods. You need to have a view of the ten years in front of you and draw a road map and an action plan. Corporates need to decide ‘I want to be a leading company in X within 10 to 15 years which means I have to change my product or market position.’ They need to have in mind — what is the long-term scenario — and from that they can decide on where to place their long-term investment. The CEOs of many big companies are focused on one year at a time. Gucci is a good example of a company with a long-term vision. They have become very innovative, they are extremely clear and open on everything digital can provide. They see it as an opportunity and they are using blockchain, crowdsourcing and the latest tech for manufacturing and retail.
But there has to be a link between the agenda and the action plan. It means getting everybody on the same page — production and services, marketing and sales all have to come together.
It is a long-term process to turn an old school company into an innovative platform. We worked with Generali, the insurance company, for one year before we introduced them to startups. We started first by creating private internal hackathons, just to foster a culture so they could see who in the company had the mindset to work with startups. Another thing that is extremely important is to start to give KPIs [key performance indicators] to people in HR. HR has to be less administrative in putting people in positions and act more like community builders, helping to identify the different people inside the company who have a different mindset and also to help find the right people from the outside. Then you can start having a real infusion of innovation inside the company. Every corporation at some point in the process also needs to create a co-working space where you can have startups and people who come from the outside coming together with corporate people in an environment that doesn’t come with 9 to 5 schedules and badges and all the restrictions that come along with that. There is a need to create a different kind of environment. Companies, such as Henkel, which as launched a special program called HenkelX , have co-working spaces here at H-FARM. Once this starts working then you need to get C-Level and top-level executives working inside the space. If you get board members and top executives to spend even one day working with startups it pushes people inside the company to say ‘lets do this project.’ But if the CEO doesn’t engage there is a big risk that the digital transformation process is treated like a hobby. A company can spend a lot of time and money and not get much in the way of results. A real digital transformation is a very delicate process which requires deep engagement from the top executives.
