19 01 30 poc workshop

Startup 
Proof of Concept
Best Practices multiplicitylabs.com
M u l t i p l i c i t y

Multiplicity is a Toronto based
startup lab & corporate
innovation consultancy
Multiplicity operates at the intersection of
helping enterprise build and execute
meaningful innovation strategies, as well
as enabling founders to build great startups.
M u l t i p l i c i t y
multiplicitylabs.com

Startups Corporates<LAB>

Challenge
Corporates and startups  
speak different languages, move
at different speeds, and make
decisions differently

What We’ve Learned
1.It’s lonely being an Innovation Manager
2.It’s frustrating
3.No best practices
4.Everyone is “just trying to figure it out”
5.What to “get wins on the board”

Outcomes
1.Codified Best Practices
2.Build a Community

Workshop Learning Outcomes
1. Benefits of adopting a Buy vs Build methodology
2. How to overcome common barriers to PoC efficiency and success
3. How to balance speed and risk exposure when experimenting with PoCs
4. Steps to adopting a ‘Startup Cadence’
5. Best practices in designing a PoC decision making process
6. Techniques to getting executive and functional team ‘buy-in’ on PoC projects
7. Process for sourcing PoC problem statements
8. How to use PoCs to influence cultural change
9. How to define clear KPI’s to measure success
10. Simple hacks to help streamline procurement, legal, finance and IT infrastructure

Failure comes part and parcel  
with invention. It’s not optional.
- Jeff Bezos
Buy vs Build: 
Portfolio of Experiments
Daring to do something new
means daring to be wrong.
Experiments lead to discoveries.
Do them fast, often, and economically.
Traditional approaches needs to
evolve from waterfall to agile.

Build
• Minimum of $1M Spend per project
• Validated by internal opinion
• Built by employees
• Concentrated projects
Buy
• Market validated
• Portfolio of projects
• Built by Entrepreneurs
• Risk is borne by the startup
VS
Buy vs Build

Levels of Value Capture
1.Client/Vendor  
(Pilot or Proof of Concept)
2.Joint Venture
3.Investment
4.Acquisition

Common Barriers to Partnering With Startups
1. No executive level buy-in or “air cover”
2. No department level buy-in (not my job).
3. No resources allocated or no clear budget definition
4. Process is often reactive and in consecutive order
5. No clear problem statements
6. No clear decision making
• go vs no-go process
• decision maker
• decision criteria
7. No clear IT or operations due diligence process
• 6 month process.
8. Waterfall approach to IT, Legal and Procurement
• 100 page contracts that take 6 months to negotiate
• 6 month procurement process
9. Startups pitch technology and not the problem

Hey, a startup,
come pitch us!

Principles of Partnering With Startups: Risk vs
Speed
Risk
Tolerance
Speed
• Quantify Risk
• What is the company's
exposure?
• Cost and resources of the
project?
• Riskiest assumption?
• Keep scope tight
• Lean Agile Procurement
• Bring people in early
• Defined decision process  
– less reactive
• Quantify risk & return  
– clear decision making
• Activities in parallel  
– shorter timeline
• Agile process
• Bring people in early to get buy-in
• Keep momentum

Basic Principles
1. Defined processes
2. Quantify risk & return
3. Activities in parallel
4. Agile process
5. Bring people in early

Decision Making
1. Quantify Risk
• What resources are being allocated (budget & time)?
• What is the downside risk/liability?
• What is the riskiest assumption?
2. Quantify Potential Return
• Cost savings
• New revenue
3. What is the threshold(s) for a “Yes” decision on a project?
• This should be a 1 pager for startups
4. Where is budget coming from?
5. Who is the final decision maker(s)?

Getting Buy-In:  
Define Your Objectives
Desired Brand: What the Corporation Values
Culture: How the Organization Gets Work Done
Realized
Brand: 
What
Customers
Say About
Your
Business
Product
Innovation:
Ability to
Create &
Foster New
Innovations

Getting Buy-In: ROI

Getting Buy-In:  
Short-Term ROI Case Study
2016 Nissan spent USD$28M on
television advertising directly for NCAA
March Madness* basketball alone,
making them the 9th largest spender
on advertising for all of March
Madness.
Smart Tones has secured a pilot with
INFINITI USA to provide attribution
and measurement on their television
advertising for the 2019 NCAA March
Madness.
Source: https://www.kantarmedia.com/us/newsroom/press-releases/march-madness-release

Getting Buy-In:  
Long-Term ROI
CFO Share Price
Earnings Per
Share 
- Revenue Growth 
- Reduce Costs
Price / Earnings
Ratio
Multiple Expansion
Market Share
Growth 
New Products
Sustainable
Innovation
“Our stock price is stuck at the low
end of the range because we can’t
get the markets to give us credit
for future growth.”
- The Startup Way, by Eric Ries
“Even if we have a good year, or an
individual breakthrough product, its
hard to convince analysts that it’s
was anything more than a fluke.”
- The Startup Way, by Eric Ries

Getting Department Buy-In: 
Sourcing Problem Statements
1. Bring them into the concept early
2. What are each department’s
strategic objectives?
3. What are each department’s
problems?
4. Use Lean Customer Development
• Ask opened questions
• 5 Whys
5. Frame the value into the
department’s terms (time, budget)
6. Make them part of the process  
(i.e. champions or mentors)

Cultural Change
2. Make them part of the process  
(i.e. champions or mentors)
3. Frame the value into the department’s
terms (time, budget)
4. Training and implementation 
(Agile & Design Thinking)
5. Acts as a catalyst get teams out of
their “day-to-day” work
6. Start-up presentations to teams to
highlight these innovations
INFINITI LAB Mentor Quotes
“Innovation is in our brand DNA, we
lost our way for a while, but now we’re
starting to come back with
innovations.”

“This Lab initiative is a perfect
example of innovation.”

KPIs: Wins On The Board
1. Level 1: Successful (Yes or No)
• Is there a pipeline of projects?
• Did the pilot convert?
2. Level 2: Value Creation
• Cost savings
• New revenue
3. Level 3: Sustainable P&L
• New products or divisions

Streamline Gatekeepers
• Increases understanding and context
• Lowers risk aversion
2. 10 page document outlining risk parameters for pre-approval
• Below X liability (customer affected)
• Below Y cost
3. Procurement:
• Predefined criteria for the startup (i.e. insurance, policies)
• Lower risk by shorten payments into stages
4. Legal: Standardize vendor agreement under $2M
5. IT: Defined data storage and transfer policy
6. Finance: defined budget account

Community:  
Innovation Assembly LinkedIn Group

19 01 30 poc workshop

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