Why Coke is Hiring Founders & Holding Failure Conferences

By Scott Kirsner |  October 28, 2013

David Butler works for one of the world’s best-known peddlers of a consumer product: Atlanta-based Coca-Cola. The designer and entrepreneur joined Coke in 2004, he explains, because “I love big, complex systems. Coke is a giant system.” Just how giant? Revenues in 2012 were $48 billion, and there are just two countries in which Coca-Cola doesn’t have shelf space: Cuba and North Korea.

David Butler

In 2012, Butler, who had been vice president of global design, took on a new title: vice president of innovation and entrepreneurship. On LinkedIn, he describes his mandate this way: “My role is to build our capability in business model innovation and to build a more entrepreneurial culture. Simply put, we’re adopting ‘Lean Startup‘ methods across a 127 year-old company with 17 billion-dollar brands, 1.8 billion daily users, and operations in 207 countries.” (Below is a photo from a recent Silicon Valley hackathon that invited techies to reimagine the soda fountain, with a $10,000 prize.)

Butler offered a glimpse of some of the experiments he’s trying — and considering — at last month’s Business Innovation Factory conference in Providence, Rhode Island. Here’s an edited transcript of his talk. Brackets [ ] indicate where we’ve condensed or rephrased his original wording.

About a year and a half ago, senior management came to me and said, we want you to focus on innovation and entrepreneurship. At the time I said, what do you mean by innovation? I wanted to know what was underneath that.

[People outside of Coke, when they hear what we’re doing with our innovation initiatives, and that we want to participate in the startup ecosystem, they sometimes ask,] “What’s the point? Aren’t you big enough? Aren’t you in enough countries?” And if you’re inside of a large organization, and you’re trying to create change, you ask yourself that daily. Sometimes it’s really hard.

[The confluence of the lean startup model, Startup Weekends, Kickstarter, co-working spaces, accelerators, and incubators] has led to a global startup ecosystem. It’s much bigger than Silicon Valley. It’s the planet. Startups are everywhere. TechStars even had a reality show. Some of that is silly, but most of it is a great thing. I was in Denver recently, and they told me a new startup is launched every 72 hours.

Is this what it’s really about — starting a lot of new things around the world? I’d suggest, no. Ninety-five percent of all startups fail.Startups know how to start, but most struggle with scale. Big companies know how to scale, but don’t know how to start.

Starting is about developing assets. You have no brand, no product, no relationships. It’s about rapid learning, exploration, pivoting, being lean.Scaling is all about leveraging assets, network effects, execution, and planning. Everything is big. At Coke, we think in millions and billions, not thousands. We have 500 brands in our portfolio. Seventeen of those are billion-dollar brands, in terms of annual sales. We’re local in 207 countries. The two countries we’re not in? North Korea and Cuba.

What if we could make it easier for starters to be scalers and scalers to be starters?How do you do that? We’re learning by doing, we’re failing all over the place, we’re trying new things.

We learned right away we needed to hire some professional starters. So we’ve been hiring co-founders, people who had started startups. Some had failed, some had been successful. We’re launching eight or nine startups with them in different cities around the world, using the lean startup process. One of them is an app to help people find jobs. Youth unemployment is a huge problem.We’re going right into the startup community. Coke has a space in WeWork San Francisco, [a coworking facility] with 300 startups all around us.

Coke has all these assets, like a huge fleet. We have more vehicles than DHL, UPS, and FedEx combined. What if you could open that up to the startup community, not just our co-founders inside of Coke?We went to the organizers of Startup Weekend and said, “We don’t want to just write you a check. How can we really help you?” They told us that we’re the first non-tech company they’d ever worked with. There’s a whole community of hardware startups, makers, who haven’t been given the accessibility to all these new [design and rapid prototyping tools.] We’re sponsoring ten maker-themed Startup Weekends, and we did the first in August in Seattle. Our people are also going to Maker Faires to help people make stuff, because that’s what we do. In November, we’re doing the first Startup Weekend in Myanmar.

And what if we could apply some of that to the inside of Coke?We’ve started doing our own internal version of Startup Weekends. [The first one was held in June 2013; a video overview is below.] At first, I didn’t know how many people would show up. I asked the Startup Weekend founders what the minimum was for an event. They said 40. One hundred and twenty people showed up.

We created a co-working space inside of Coke, so we could get people to have some collisions inside [the company, with] different functions coming there to work. We’re doing unconferences in that space, unstructured meetings. We don’t have unstructured meetings in big companies; that’s a very foreign concept. Next week, we’re having our first Failure Conference. We’ve asked people to come and talk about their failures and the learnings they got out of them. [We’re working on] hackathons, where we open up data sets and open up factories, not just for people inside [the company], but people outside and students. This is all new, but this is the way we’re regenerating the culture.

What’s the point, not just from the Coke perspective, but for every other large corporation? If we get into the startup ecosystem, we can create more scale, more diversity, and hopefully more revolutions.We all win when we make it easier for startups to be scalers, and scalers to be starters.

More: Here’s a post from Butler on Coke’s blog, and an interview with him on the Business Innovation Factory site. Below is a two-minute video, produced by Coke, that captures the first internal Startup Weekend event the company held in June 2013.