US drinks goliath Coca-Cola has revealed that it didn’t actively promote one of its key startup programmes in case it was a failure.
David Butler, VP of innovation and entrepreneurship at The Coca-Cola Company, told Techworld that the multinational beverage firm chose to launch its “Founders” programme “very quietly” to avoid hyping it up in case it flopped.
“You haven’t heard about it because we didn’t want to announce it and then it turn to vapour,” he admitted at the Web Summit conference in Dublin.
Through the Founders programme, which has its own website but has received limited media coverage, Coca-Cola is aiming to capitalise on the innovative ideas that entrepreneurs have.
“We partner with founders before they have an idea. We expose them to the challenges we have but also what gives us scale and the power of coke,” said Butler. “Once they know that they can design things and create value that flows back to us.”
Commenting on the calibre of the founders that Coca-Cola is partnering with, Butler said: “All the founders we partner with have significant exits or mini failures. There are no first-time founders or MBA students. We find them, partner with them and immerse them in the company.”
In order to support entrepreneurs on the Founders programme, Coca-Cola offers them up to $250,000 (£156,000) in seed capital. However, Butler said it’s up to them if they decide to take it and many may choose not to as any investment made by Coca-Cola is converted into equity as soon as the company has a “sustainable business model”.
Butler added: “If it’s something we really want at that stage we can go in and buy the thing, depending on the value.”
The Founders programme is currently in operation in: San Francisco, Berlin, Tel Aviv, Singapore, Mexico City, Buenos Aires, Rio de Janeiro, London and Sydney.
Butler said there are 10 Founders teams around the world, with two to three co-founders on each.
The teams are asked to develop solutions that will help Coca-Cola overcome particular challenges.
For example, Winnin, a Founders team in Rio de Janeiro, Brazil, was asked to look at how Coca-Cola can engage with teenagers, or the next-generation of Coca-Cola customers.
The team behind Winnin developed an algorithm that allows teenagers to view video content across multiple platforms in one place.
Butler said: “What does that do? It creates another channel for us to reach teens that didn’t exist before. It’s a huge market and they can bring in advertisers into that platform.”
Since launching four months ago, Winnin has attracted over 1.5 million users.
Beyond the Founders programme, Coca-Cola also launched a more traditional accelerator programme in Tel Aviv.
The vast majority of large enterprises now have a strategy when it comes to working with startups but Butler believes there is still more to be done.
"I don’t think we’ve seen the power that large established companies can provide to this community," he said. "I think we’re just starting to see that but we’re all in on it."