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Amid shaky integrations, flat returns and often high costs, incubators and accelerators are experiencing a period “backlash,” analysts said. Amid shaky integrations, flat returns and often high costs,
As many marketers fall behind in the digital mediascape, a number of brands with budgets to spare are exploring, not just ways to keep up with the channel, but to innovate and ultimately lead the charge in a rapidly evolving space. However, a series of recent announcements suggests this strategy is hitting some bumps in the road.
Taking a cue from the world of Silicon Valley, many decidedly non-technology-oriented marketers, especially in the retail space, have established their own startup incubators and accelerator programs, hoping to produce the next cutting edge successes. After all, how cool would it be to be the creator of a “unicorn” app or service that everyone else tries to copy?
“What’s happening right now is, because of digital disruption — because of startups coming into markets — these large companies think, ‘Well, we’ve got to beat the startups at their own game,'” said Ted Schadler, VP and principal analyst serving application development and delivery professionals at Forrester. “And that is impossible.”
Late last year and into the first few months of 2017, several of these initiatives have faltered if not shuttered entirely. Target’s mysterious Goldfish project, part of a broader “innovation portfolio,” sunk without producing much of note; Wal-Mart cut hundreds from its Silicon Valley workforce amid a shaky integration of the online retailer Jet; and Coca-Cola powered down its own startup accelerator, called Founders, in January, after barely three years of operation.
“This is just a backlash,” said Schadler. “It’s executives going, ‘You know what, it’s not really working, so why am I spending all this money? Let’s dial it back.'”
That’s not to say brands are backing off digital innovation entirely — not by a long shot. The International Data Corporation (IDC) forecasts all business’ spend on digital transformation technology will hit $1.2 trillion this year — a 17.8% increase over 2016 — with a focus on tools that better support omni-experience innovations.
However, the reality of non-technology centered brands building out their own, in-house startup initiatives and essentially replicating a Silicon Valley framework appears far slimmer than it once did.
“My work indicates very clearly that you need an innovation process,” said Schadler. “But that innovation process is as much about assessing about what’s going on in the real world, the outside world, as it is about shepherding projects internally.”
The biggest issue is a fundamental split in how the two sides of the industry operate, according to Sean Brown, chief technology officer at the digital…