Every media CEO worth his or her salt is thinking about fostering innovation in their company, but injecting spirit of nimble, agile technology startups into large corporations is far from easy.
So here’s an idea – why not take a leaf out of the Silicon Valley playbook and set up your own startup incubator?
That’s what Finnish publisher Sanoma decided to do a year and a half ago. Sanoma is huge – it employs 10,000 people across across Europe and last year had net sales of €2.4 billion (£2 billion) from its newspapers, magazines and other media properties.
But it faces the same need to adapt as other publishers, so when Lassi Kurkijärvi joined the company as director of innovation and development 18 months ago he was tasked with providing the company with new innovative digital products. He told us:
How could we innovate faster and get more people involved – that was at the core of what we wanted to do.
The first thing I realised (at the Founder Institute) was most of the people visiting were corporates like me working in different roles. I thought hey, why not take this model and use it to deploy something similar internally.
Taking inspiration from the Founder Institute, a global startup accelerator network started in the US, Kurkijärvi formed a partnership with Dutch digital production company MakerStreet to launch Sanoma’s own startup accelerator programme.
Sanoma has so far run two programmes covering mobile, content and has just launched a third on ecommerce. Each programme lasts three months and brings in 150 staff from across different roles within the company, including design, sales and editorial, to foster a multi-discipliniary approach.
— Launch: The programmes start with a “live kick-off” day held at Sanoma’s three digital hubs in Helsinki, Amsterdam and Budapest, where the participants come up with initial ideas. As Kurkijärvi describes it: “We introduce people to lean startup methodology, have them practice pitching their idea, and teach them how to identify the risky assumptions go about validating or invalidating those assumptions.”
— Webinars: Following the launch, seven live webinars are held, so far on Tuesday evenings, where experts in fields such as design thinking and business model innovation give talks. In between the participants are asked to put the lessons into practice by, for instance building their minimum viable product.
— Bootcamp: Following the webinars and weeks of development using input from teachers and other particpants, the ideas are cut down to five through a combination of voting across the programme and decisions by Sonoma executives. The staff who came up with the surviving ideas then pick two teammates, either from within the programme or outside, and are joined by a designer from MakerStreet to go on to an intensive four day bootcamp to polish and test their ideas.
At the end of the process, Sanoma executives choose those projects with the most promise and fund the team to continue developing the project for another year.
Cost-effective and less risky
The point of adopting the startup incubator model is to ensure ideas are thoroughly tested and tweaked before the product is built, rather than coming up with grand designs and Powerpoint presentations to justify why your proposed product should work. Kurkijärvi:
It’s all about taking the risk out of your business development. Most business ideas don’t fail because you can’t build them, it’s because there are no customers for it.
It’s only after you’ve invested your million that you find out what the customer thinks. We are making sure we aren’t building something before we’ve tested it.
The first three products to come out of the programme have been in development for the last quarter. They are:
— Beauty advisor service called Beauty Tale,
— A marketplace for linking up experts in leisure activites such as wine drinking with people who want to learn about them called ucourse, and…
— A children’s multimedia educational product currently going by the working title Mosiplay.
Though he isn’t able to reveal how much the programme has cost, Kurkijärvi says it compares favourably to past business development programmes he has worked on.
The three programmes, and new ones that emerge from the later programmes, will be treated as startups within the company. Kurkijärvi says this means providing constant support and a flexible approach to deciding how to assess whether the project is going to be sucessful, and how much finding to provide. He says:
We monitor them in the same way an investor might monitor a startup. Can they build a sustainable community around their project? Do they have any indication the business model will work? We can also be quite reasonable about the size of the investment.
And of course we don’t expect them all to succeed. I think the real results are going to come in three to five years, that’s the kind of patience we are looking at.