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From Startup to Scaleup: The Next Wave of Innovation

By:  David Butler Aug 6, 2013
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From Startup to Scaleup

I grew up surfing. And if you’ve ever been surfing, you know it’s all about positioning – getting in the right place at the right time to catch the best wave.

That’s what we’re doing at Coca-Cola. We see a new wave of innovation coming, and we’re going for it.

Big companies have a lot to learn from startups. We’ve spent the last year or so learning everything we could about lean startups: how they work, how they’re funded, what it takes to be a great founder, how startups work with mentors, what tools they use, etc.

My own personal entrepreneurial journey began in 1996 when I started a company way back in the Web 1.0 days. This was before Steve went back to Apple and before Google. Netscape was the browser of choice, and most people used dial-up services to connect to the Web. At the time, there were only about 100,000 sites on the Internet (two years later, there were more than 100 million).

My startup didn’t make it, and I joined a design firm who worked with big companies trying to start “e-businesses” – what companies called spin-off versions of their businesses as they tried to integrate new, Web-based technologies.

This was also when new “dotcom” companies began to take off. These businesses differed greatly from today’s startups; most spent their time focusing on raising huge capital investments and less on their actual business model. Soon after that came the “dot bomb” – the meltdown of the so-called new economy.

In 2004, a University of California professor named Steve Blank and a student named Eric Ries began codifying what would later be called “The Lean Startup.” This process of searching for a business model would quickly become the blueprint for how entrepreneurs around the world built startups.

So, the “first wave” was about moving from dotcom to startup.

Let’s fast forward to today. Where are we in 2013? We’ve come a long way, right? Founders are no longer geeks behind the scenes. Mark Zuckerburg, Jack Dorsey and others are global celebrities who have created iconic, billion-dollar brands. TechStars, once a small startup based in Boulder, Colorado, now has its own reality TV show. Startups are now mainstream.

And it’s never been easier to start a startup. Startup Weekend is in more than 100 countries. Today, if you don’t know how to start a company, you can learn in just 54 hours and 100 bucks almost anywhere in the world. And you don’t have to buy a building or work out of your kitchen. There are co-working spaces from New York to Nairobi to Nepal. You also don’t need a rich uncle or a student loan to fund your startup. Most large corporations and universities have some kind of incubator, or you can simply pitch your idea on a crowd-funding site like Kickstarter.

We believe this second wave, from about 2004 to today, has been about building a global startup ecosystem. But have we arrived? Is that it? Are we at the end of the journey?

We don’t think so.

It’s estimated that about 50 million new businesses were started globally last year. Most of them failed. Why? Because starting up is easier than ever. But scaling isn’t.

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.

Coca-Cola Accelerator Sydney

We believe that we all win when startups move to scaleups.

And we’re all in. We’ve created what we call the Coca-Cola Accelerator Program. But it’s not a traditional accelerator program. Most corporate incubator or accelerator programs focus on investing in promising startups. We’re focused on co-designing, collaborating and building with startups, and bringing our ability to scale and our amazing assets together to unlock new ways to create value on a global basis.

But we’re not sitting back planning our way forward – we’re learning by doing. This year, we’re launching nine Coca-Cola Accelerators around the world. We’re hiring two founders to lead each Accelerator and connect with the startup ecosystem. We’ve designed a new process based on the “lean startup process,” a new funding model, new hiring models – new everything – to make this happen. 

We’re just getting started in our journey and hope to have more to share in the coming weeks and months. We’re excited about playing an active role in the ever-expanding ecosystem and advancing the movement from startup to scaleup. Join us!

David Butler (pictured above) is vice president of innovation at The Coca-Cola Company. He spoke recently at Fishburners, a co-working space and entrepreneur community in Sydney, Australia, about how Coke is learning from startups and partnering with organizations like UP Global. Watch his speech here.