Large corporations need to explore outside their comfort zones, and working with startups is one way to do that quickly, cheaply, and with reduced risk to the corporate partner. You can make a big impact and learn a ton without putting too much time, treasure or brand value on the table.
We recently published a rich case study of Illumina for Startups that digs into the origins, challenges, strategic decisions and impact of the startup engagement work at Illumina, a $3.2 billion maker of genomic analysis technologies based in San Diego, Calif. We share some of the important lessons below. (The complete case study is available from the Journal of Commercial Biotechnology, or you may access a private copy here.)
Illumina for Startups accelerates innovation in the genomics entrepreneurial community through two arms. The first, Illumina Accelerator, is a company-creation engine co-located with Illumina R&D centers in the San Francisco Bay Area, and in Cambridge, UK. The second, Sequoia Capital China Intelligent Healthcare Genomics Incubator, Powered by Illumina, is based in Shanghai.
Illumina for Startups advances breakthrough applications in genomics, including therapeutics, diagnostics, agriculture, synthetic biology, software and direct-to-consumer applications. In seven years, Illumina for Startups has launched 54 startups who have collectively raised over $1 billion in venture capital from leading venture capital firms. Ninety-three percent of the Illumina Accelerator graduates to date have gone on to raise capital. Approximately 56 percent of Illumina Accelerator startups have a female co-founder, 22 percent are led by a female CEO, and 85 percent of the capital raised by Illumina Accelerator startups was secured by teams with female co-founder(s).
Three Ingredients for a High-Functioning Corporate Partnership Engine
1. Innovation Maturity
Be sure your approach is in line with what your organization is ready for. Does the champion have a C-level title, P&L responsibility, or both? Do they have entrepreneurial experience? Is someone in a line of business prepared to receive what will come out of your startup engagement work? Plan accordingly!
Illumina for Startups was conceived by Mostafa Ronaghi, a once-and-future entrepreneur who was Chief Technology Officer of Illumina. Then-CEO Jay Flatley was also an entrepreneur. Perhaps not coincidentally, Illumina’s leadership was poised for consensus around making the investment in time, treasure and attention.
Fear not! If your company doesn’t yet have this kind of entrepreneurial structure and culture, you can still engage with startups. We recommend starting with individual partnerships, each customized for the needs of a specific organizational leader. Use learnings from those partnerships to grow your company’s innovation maturity.
Is someone in a line of business prepared to receive what will come out of your startup engagement work?
2. Create the Right Team
You’ll want someone with both technical and ecosystem chops to make sure you’re designing a sensible approach and putting your resources in the right buckets. In the case of Illumina for Startups, the Illumina Accelerator design demanded someone with strong investment chops aligned with a technical eye: enter Amanda. Amanda was a trained PhD-level chemical biologist turned successful corporate investment leader. Her deep ties into the life science investment ecosystem and her entrepreneurial spirit brought her to Ronaghi’s attention. They first connected at an industry dinner where Ronaghi was struck by Amanda’s breadth of investment experience across life science therapeutics, diagnostics, and research tools as well as her track record of picking winning investments. Technical expertise, business expertise, track record, and network: Clearly Amanda was a great fit for the leadership role. But to persuade her to join, Illumina had to overcome Amanda’s skepticism – a reasonable stance given the rapidity with which some other corporate accelerators had disappeared. One key factor that made the case to Amanda was Illumina’s commitment to being founder-friendly.
If you can’t get the expertise in-house to begin with, many third parties offer support. Just be sure you have at least one full-time person who is hands on and can focus on making sure you are acquiring the lessons you need to learn.
3. Be Founder-Friendly
Your reputation is paramount. The startup world is small and word gets around quickly if you’re not a good partner. You need to:
Align on incentives – Illumina for Startups does this through equity: everyone shares the same definition of success, and a win for one is a win for all.
Keep market signals clean – Startup CEOs want to work with you when it’s clear that the partnership is good for them. Illumina for Startups does not generally accelerate Illumina’s acquisition targets. That could create confusing signals in the marketplace, both for companies that are eventually acquired (Illumina’s interest could be chilling to other potential acquirers), and for companies that are not eventually acquired (when Illumina declines, the market could interpret this as a negative for the startup, when it might not mean that at all).
If you ask your startup partners to meet with your internal stakeholders or to follow a curriculum, be absolutely certain that these activities are of direct benefit to the startup.
Enhance the partner’s brand – You want potential investors to be glad to see you in the mix. Illumina for Startups accelerates companies that are its customers. Since Illumina is a world-renowned top-brand in genomics, investors like genomics startups that are using Illumina tools and partnership.
Above all, respect founders’ time – If you ask your startup partners to meet with your internal stakeholders or to follow a curriculum, be absolutely certain that these activities are of direct benefit to the startup. They need to move really fast, so make room. Illumina schedules time with internal stakeholders only when that matters to the startup – for example, when Ronaghi invested his time as a coach and mentor. And in lieu of curriculum per se, Illumina provides access to experts on a just-in-time basis, so each team can focus on its own urgent next steps.
We would like to hear from you. Let us know how these lessons resonate with you.
Diana Joseph is CEO of the Corporate Accelerator Forum. Amanda Cashin is the Co-Founder and Global Head of Illumina for Startups. Cashin will be part of a discussion at the online event Unleashing Startup Innovation: Partnership Strategy for Corporates, December 7-9, 2021.