Coca-Cola is getting into the startup accelerator/incubator business. The sugar-water firm is launching 9 accelerators – Mexico City is up and running, with others to come in Berlin, Bangalore, Istanbul, Singapore and elsewhere.
This news made me sigh. Two years have passed since my former colleague Bobbie Johnson was bemoaning the profusion of accelerators (particularly in Europe) and the trend shows no sign of letting up. There’s a strong case for saying there are simply too many of these things now, and David Knight of Berlin blog Silicon Allee put it quite well on Friday:
“If the number of places available on accelerator programs in Berlin continues to grow, then there could be the danger that the overall standard of team accepted will necessarily have to decrease as those in charge of the programs fill them up with the best they can find. And that can’t be a good thing for anyone – teams graduating without the right ingredients for success.”
But the thing that gets me about the Coca-Cola Accelerator Program is its apparent lack of focus.
Coke has actually done the incubator thing before, with a program more than a decade ago called Fizzion. Thankfully that name isn’t being revived, but the scheme in question was targeting startups that were doing things Coke might want to integrate into its business — software, bottling methods and so on.
That’s the sort of motivation that lies behind a lot of accelerators and incubators today. With Telefónica’s Wayra and Deutsche Telekom’s hub:raum, although the focus isn’t entirely exclusive, these legacy telcos are trying to stimulate and take advantage of innovative ideas in the mobile space. Same goes for Volkswagen’s accelerator in Silicon Valley — the car company wants better automotive technologies.
So what does Coke want? Good question.
The company has not yet revealed much detail about its accelerator plans. It’s promising some kind of new funding model that doesn’t involve actually investing in startups, but rather “co-designing, collaborating and building with startups.” Coke says it wants to bring its “ability to scale” and its “amazing assets” to the party.
Now, don’t get me wrong. Coke has a lot of assets, including one of the best distribution networks in the world. It would make a great partner for, say, a startup making solar panel kits for the developing world. But we’re talking about 9 accelerators – that’s a lot of startups, and we still don’t know what Coke wants to get out of it.
Actually, that’s not quite true. We do have this indicator from Coca-Cola’s innovation chief, David Butler, who told the startup community in Sydney, Australia:
“The thing that every big company faces is irrelevance… the only way to stay relevant is to get in front of that and go where everybody else is going.”
Butler subsequently wrote:
“The weird thing is that big, established companies know how to scale, but don’t know how to start. At Coke, we think the big idea, or the next wave of innovation, will be all about building scaleups. We believe if we can get the starters of the world to build with the scalers of the world, then we’ll see a much larger percentage of startups move to scaleups. We believe that we all win when startups move to scaleups.”
We do, do we? Until Coca-Cola shows its hand a bit more clearly, we’re left with the distinct impression that what the company really wants is to bask in the reflected glow of the trendy tech startup scene.
So what, you might ask, look at all those resources! But those telcos and automotive firms mentioned above aren’t just offering cash and generalized business savvy; they’re offering quite specific expertise and contacts within their industries.
If you’re a mobile services company, Deutsche Telekom can make you better-networked and more of an expert in your chosen field. Coca-Cola can teach you how to scale, but those lessons could come from a variety of sources. (And, if you think I’m picking on Coke, same goes for Pepsi, which seems to be leaning heavily on its brand marketing skills.)
I may be proved wrong when Coca-Cola outlines its model a bit more clearly, but for now it looks like a sign of the accelerator boom getting diluted into meaninglessness.