W4: How Corporates Co-innovate with Startups: The BMW Startup Garage (INSEAD)

Question 1

Automotive industry

Answer 1

Undergoing rapid transformation (paradigm shift) due to various factors such as the rise of digital natives, global connectivity, urbanisation, and stricter regulations. These changes are shifting the focus from traditional manufacturing to customer experience, connectivity, and mobility possibilities

Question 2

“Smart” cars

Answer 2

Equipped with advanced technology and connectivity features. They are reshaping the industry landscape

Question 3

Traditional manufacturing

Answer 3

Giving way to a focus on customer experience, connectivity, and mobility possibilities

Question 4

Digital technology

Answer 4

Revolutionising the manufacturing process through Industry 4.0 initiatives. AI, automation, and data analytics are optimising the shop floor, leading to higher productivity, quality, and cost-effectiveness. The convergence of digital and physical worlds enables improved process synchronisation and real-time decision-making

Question 5

Non-conventional players

Answer 5

E.g. Tesla, Google, and Apple. Their entry along with the rise of car-sharing services is disrupting the automotive industry. These players challenge traditional automakers by introducing innovative business models and technologies

Question 6

Traditional automakers

Answer 6

Face challenges in competing with deep-pocketed tech giants and adapting to rapid technological advancements. To stay relevant, they are forming alliances with technology companies, investing in R&D, and exploring new collaboration models

Question 7

Corporate venture capital funds and accelerators

Answer 7

Used by traditional automakers to tap into the innovation potential of startups and external sources of knowledge

Question 8

BMW

Answer 8

A leading luxury car manufacturer. Has a history of innovation, but must adapt to the changing automotive landscape. Initiatives like BMW i Ventures (BiV) demonstrate BMW’s commitment to embracing innovation through partnerships with startups

Question 9

BMW i Ventures (BiV)

Answer 9

Focuses on investing in companies related to auto tech, smart production, mobility, and customer digital life

Question 10

Gregor Gimmy

Answer 10

Joined BMW’s R&D department with a mandate to create an “internal IDEO.” He used his diverse background to embark on a mission to infuse innovation into BMW’s culture. Recognising the untapped potential of startup technologies, he proposed a radical shift in BMW’s approach to engaging with startups. This led to the inception of VCL

Question 11

Venture Client Model (VCL)

Answer 11

Aimed to synergise with BMW’s existing innovation strategies. Introduced a paradigm shift in BMW’s interaction with startups. Instead of seeking equity, BMW acted as a “venture client”, purchasing technology from startups in early stages. This allowed BMW to validate startup solutions through collaboration projects, enabling startups to become bona fide vendors from the outset

Question 12

BMW Startup Garage (BSG)

Answer 12

Launched as a dedicated unit to implement the VCL mode. Served as the operational hub for implementing the VCL model. Leveraging BMW’s internal network, the Garage connected startups with relevant experts across business units. Upon approval of the startup’s solution, joint projects were initiated with startups receiving purchase orders from BSG

Question 13

27pilots

Answer 13

An external consulting firm set up by Gimmy to assis other corporations in adopting the VCL model