Well established companies—and sometimes even those that are not so well established—often find it difficult to maintain the curiosity and flexibility required to respond quickly to market changes and new customer requirements. Internal start-ups can be one way to remedy this. One example of this is the “CA Accelerator” started by tech veteran CA Technologies.
The software company was founded in 1976 as Computer Associates International. It most recently reported around 4.2 billion US dollars in annual turnover. Having changed its course several times over the years, CA is now concentrating again on its B2B segment and has rediscovered its innovative vein.
How the CA Accelerator works
Otto Berkes has served as the company’s CTO since 2015 and heads the CA Accelerator, which was launched at the beginning of 2016. This would not be the first time Otto Berkes has helped an established company. He was part of the founding team of the Xbox project at Microsoft and brought the digital strategy of the US pay-TV broadcaster HBO up to speed.
“Transformation is a messy process. You need the right environment for ideation, discovery and experimentation,” the CTO is quoted as saying in a brochure about the Accelerator. He swears by the “Lean Start-up” concept to confront ideas with reality as early as possible. The company seeks to remove internal hurdles.
And, to this end, the CA Accelerator acts as an investor from Silicon Valley. This is probably the reason it’s not located at the company’s headquarters in New York. Instead, its offices are in the Menlo Park branch and thus right in the middle of the start-up scene.
CA employees who want to implement an idea first have to present it to the so-called Angel Team made up of representatives from numerous departments. They also get input from universities. CA consciously encourages its employees to try out new customer groups, business models, partnerships or third-party tools. The “intrapreneurs” are even given free range when it comes to branding their internal start-up.
Once the Angel Team finally gives its thumbs-up, the employees can focus on their project full-time. They continue to draw their salary and their position in the company remains intact as a safety net. In addition to this, the start-up-makers have access to CA’s resources—both in terms of finances and personnel.
During the process, the idea has to prove itself just like it would to a venture capitalist. Its progress is checked and reviewed every month. The internal start-up is developed step by step. A total of five rounds from “Seed 1” to “Series C” serve to check whether a change of course is necessary or whether the experiment should be stopped altogether. About a dozen ideas are currently in various phases of development.
Examples and lessons learned
One example is the tool Waffle.io. It helps developers keep track of their current projects on GitHub. And if you take a look at the website, you will need to look very closely to find the reference to CA in the fine print. Waffle.io presents itself like a start-up and that’s exactly how it should be seen.
The analytics platform Jarvis, on the other hand, left the Accelerator in October 2016 and has since been integrated into various other company products.
In the end, of course, the creators want to generate new business for the main company. But there are other aspects as well. “In many ways it’s a leadership and skills development program”, explained Otto Berkes in an interview with Venturebeat. Even if the idea doesn’t work in the end, the intrapreneurs will have learned a lot with the experiment and bring this knowledge back to their original job. CA also uses the lean start-up method to achieve a repeatable process, in which they can constantly develop new ideas and then incorporate the findings into their work.
Interestingly enough, money does not seem to be the primary motivation for the CA employees. When Waffle.io was launched, for example, no corresponding bonus had been defined. “What really attracts people is their passion,” says Otto Berkes.
By the way, DMEXCO’s Start-up Village provides established companies with a way to take an up-close and personal look at the entrepreneurial spirit and innovation processes. An abundance of ideas will be presented both here and on the main stages on both days of the conference. In addition to entrepreneurs like Amber Atherton (Zyper), Melanie Mohr (YEAY) and XY (YZ), presenters will include representatives from Deutsche Bahn and Daimler Investment.