Ranking of 100 companies that have most Open Innovation deals with Startups in our program

Since 2016, the 100 Open Startups Ranking highlights annually, the most attractive startups for the corporate market. As of 2018, we also began to publish the ranking of leading open innovation companies with startups.

Initially, the category of such companies in the Ranking covered only 50 names but in the 2020 Edition, we had a higher density level large enough that we could extend the list to 100 and in the process were able to name it as the TOP 100 Open Corps.

The 100 Open Startups Ranking and their categories are built from the collection of primary data, validated by a process of verification and auditing of our teams. In other words, the Ranking measures objectively the volume and intensity of open innovation relationships established between startups and companies, allowing to mirror the points given to companies and startups.

In addition to recognizing the efforts and achievements of companies and startups that top the TOP 100 lists, the exercise of collecting data on the practice of open innovation with startups brings benefits to the entire market.

From the analysis of these data, we were able to identify the main innovation movements worldwide, their density and concentration. We are able to identify which are the most common types of relationships, the values ​​involved and we know which sectors bring the most opportunities.

Most startups market insight studies consider those that have already been identified and invested by venture capital funds. For the 100 Open Startups Ranking our focus is on startups in earlier stages, making their first institutional partnerships in the market and achieving their first results. After all, our focus is on the evolution of the innovation ecosystem as a whole. Our goal is to map the next innovation movements that define investment trends and convergence in the next stage. We try to identify: what comes next? What are the startups that will emerge in the industry scene in the coming years? Which companies are best prepared for the transformation of their sectors? What are the most intense innovation trends?

To seek answers to these questions, we focused on analyzing the data collected to build the 100 Open Startups Ranking over the past five years. Below, we present some relevant and hitherto unknown facts about Open Innovation & Startups in our program.

Methodology:

The methodology of the 100 Open Startups Ranking gives points to startups that generate the most interest in medium and large institutions each year and at the other end to medium and large companies that most establish business relationships with startups.

Startups validated as such by ecosystem specialists, company executives and investors are considered eligible for the Ranking, according to the methodology of 100 Open Startups. In addition, startups must have a turnover of less than $ 2.5 mn in the fiscal year prior to the publication of the Ranking and have received no more than $ 2.5 mn in direct investment and are not controlled by an economic group, but by entrepreneurs at front of the business.

For the TOP Open Corps category, companies with sales exceeding $ 100 million or more than 100 employees are considered eligible.

To compose the score, the number and intensity of declared relationships are considered, categorized into 16 types, divided into four large groups, with scores equivalent to 1, 5 or 10 points, as detailed in the following table:

The classification method is based on information formally sent through the 100 Open Startups platform. Startups and companies themselves inform when a relationship is established, what is the nature of that relationship and the verification data. Our role is to verify, with the other end, the consistency of the registered information and validate the score.

Summaries of the main lessons that the analysis of the data that make up the TOP 100 Open Corps category brings us and that will be discussed in more detail below:

  1. Companies increasingly rely on startups to innovate

MAIN INSIGHTS OF THE 100 OPEN CORPS RANKING

1- Companies increasingly rely on startups to innovate:

We have been through a recent revolution in innovation and entrepreneurship models. In 2003, Henry Chesbrough coined the term Open Innovation to denote the phenomenon of opening up the innovation process of large companies as opposed to the traditional closed Research & Development (R&D) model. In 2011, Eric Ries published the Lean Startup method, which, associated with the customer development methodology created by Steve Blank in 2007, became the new paradigm for the creation of startups.

Both phenomena altered, at an extremely fast pace, the behavior of the innovation and entrepreneurship ecosystem worldwide. As of 2015, the first international surveys on what started to be known as Corporate Startup Engagement (CSE) began to emerge with large companies opening up to the relationship with startups and vice versa in search of new interaction models for co-creating innovations.

After five years of data collection of the 100 Open Startups Ranking, among all the other possibilities of actors to do open innovation, the search for corporations for startups was so great that the term Open Innovation came to be used almost as a synonym for Corporate Startup Engagement . Hence our linguistic and terminological adjustment for Open Innovation with Startups to define the practice.

Panorama of Open Innovation & Startups| 2016–2020
Growth of Open Innovation practice with Startups

Source: Ranking 100 Open Startups 2020 • (data updated until 04/30/2020)
www.openstartups.net

Graph 1 — Growth of Open Innovation with Startups

The set of graphs above shows the number of startups with an open innovation relationship with a company, the number of companies with relationships with startups, the score in the Ranking, according to the classification that measures intensity in the relationship, and the number of relationships established year after year.

These numbers point to a growth of around 20 times in the practice of open innovation with startups in the program in 5 years and largely disagrees with most surveys done on the subject in other ecosystems. In general, these surveys point to an order of 100 companies doing open innovation with startups in a given country or region.

One explanation for this is that not all companies identified in the data collection of the Ranking 100 Open Corps have visible open innovation programs, with active websites and publicity campaigns. One of the major criticisms that limited the adoption of open innovation was the fear of companies to publish their strategic challenges in an open way and with this, the first platforms in the open innovation marketplace model did not prosper.

In the 100 Open Startups method, companies do not need to openly publish their specific open innovation demands, they can participate in major thematic challenges or disclose demands only to previously selected startups or filtered based on pre-established criteria. Thus, with the incentive to be highlighted in the Ranking, startups and companies actively register their contracts and relationships without fear of exposure of the process.

Another important explanation is the fact that the nature of the relationship with startups is much lighter and more flexible, when compared to other types of open innovation — for example, with universities or other larger companies. It was very common to see in the first years, startups carry out proofs of concept or technical demonstrations in the field, often without signing contracts or involving transfer of resources.

2- Company executives form the largest group of professionals who interact with startups:

Panorama of Open Innovation & Startups| 2016–2020
Groups that interact with startups

As part of the construction method of 100 Open Startups Ranking, the program provides a matchmaking, speed-dating and start-up assessment tool. Anyone participating in the ecosystem can access the digital platform for interacting with startups to establish new connections.

Five years ago, when we started collecting data for the 100 Open Startups Ranking, we ended the first year with 1,157 executives, representatives of companies with more than 100 employees, who effectively interacted with registered startups, seeking some type of relationship. This number represented 29% of the total number of participants. For the collection of data from the 2020 Ranking, we had a total of 9,346 executives from that same group, which represents about 34% of the total of people who interacted with startups.

The other groups are formed by entrepreneurs from startups (29%), consultants (21%), investors (6%), government (3%) and other actors of the ecosystem (7%), in a total of about 28 thousand people who interacted with registered startups.

Among the 9,346 company executives, the main reasons why they sought interaction with startups were: looking for innovative solutions for opportunities in their company (84.1%), learning about new ideas and innovations (71%), assisting entrepreneurs in the development of their businesses (40.6%) and look for investment opportunities (36.6%).

Panorama of Open Innovation & Startups| 2016–2020
Reasons why executives seek startups

Reasons why executives seek startups

3- Companies looking for startups most of the time, find them:

Panorama of Open Innovation & Startups| 2016–2020
Growth in the proportion of companies with OI relations with Startups

Growth in the proportion of companies with OI relationships with Startups

According to data from the 2016 Ranking, only 24% of the companies that interacted with startups established relationships with any startup. In 2020, this proportion rose to 58%. The graph shows the 20-fold growth in absolute numbers of companies with relationships with startups, rising from 82 to 1,635. While the number of companies that engaged in the search for startups grew from 337 to 2,825, that is, more than 8 times.

4- The number of companies with agreements with startups exceeds the number of startups with agreements with companies:

It is interesting to note that, according to the 2020 Ranking data, the number of companies with agreements with startups surpassed the number of startups with agreements with companies.

Since we started collecting the data in 2016, it was already curious that the number of companies with relationships with startups was very close to the number of startups (108 startups with 82 companies). But this was easily explained by the coordination effort carried out by the ecosystem in precisely bringing dozens of companies to each one of them to evaluate hundreds of curated startups. Year after year, the number of companies and startups with relationships grew in an almost equal proportion, but the difference gradually narrowed, from 24% in 2016 to 2% in 2019.

What could explain the bursting of the now 34% difference in favor of companies?

We formulate some hypotheses to be validated:

Hypothesis # 1:Boom of physical hubs, creating an overexposure effect of few startups to visit many companies.

Hypothesis # 2:The 100 Open Startups Ranking has as part of the method to give greater visibility to the ranked startups. As the limit to participate in the Ranking is sales or investment lower than $ 2.5 mn, many startups have maximum exposure for more than one year.

Hypothesis # 3:Many new companies enter the startup market and choose the most mature startups in their relationship with companies, without much sourcing effort, and rely on the recommendations of the ecosystem.

Hypothesis # 4:This is a natural convergence related to the increase in the maturity of startups and the intention of companies to work with more mature solutions, called scale-ups .

A group of hypotheses is related to the coordination of the startup ecosystem; on the otherhand, to the increase in maturity of startups.

In the analysis of the Ranking 2020 data, we mapped 33 sectors with a density of at least six companies that did open innovation with startups, so that this relationship between companies and startups is multi-sectoral and well distributed.

In the universe of 1,635 companies, the five sectors with the most density were:

  • Financial services

However, the sectors of greatest intensity among the TOP 100 were:

  • Financial services

6- Open Innovation with startups is less and less concentrated:

Panorama of Open Innovation & Startups| 2016–2020
Concentration of OI relations

The 100 companies that do the most open innovation represent 38% of the total relationships between companies and startups in our Program, which means that the other 1,535 account for the other 62%.

This result, as well as the increase in the number of companies between 2016 and 2020, is an indication that there are more and more companies entering the practice of open innovation with startups, albeit in a low volume of relationships, generating a long tail effect.