Coca-Cola's Chief Innovation Officer "Cracks The Code" On Startup Success: Storytelling
Alan Boehme, CIO and Chief Innovation Officer at Coca-Cola Company, spoke at IDG's CIO Perspectives conference in San Francisco. Maryfran Johnson, Editor-in-Chief of CIO Magazine, introduced him by saying he had "cracked the code" on startups.
I was skeptical there would be much from Coca-Cola after the fallout from the innovation of "New Coke" in 1985 but I was wrong. It was a surprisingly interesting presentation and refreshingly frank in places.
Boehme spoke about his company's recent quest for innovation in Israel, where it planned to launch an incubator, then changed its mind and decided to set up an accelerator, but pivoted once more to become a "Bridge" that connects startups with US markets, and with top US execs such as John Cambers, CEO of Cisco Systems; plus 200 of Coca-Cola's top marketing experts.
Startups are as terrible at marketing as large companies are at innovation but, "Coca-Cola is great at storytelling. We've been doing it for a long time," said Boehme."Startups are terrible at marketing. Coca-Cola is great at storytelling, we've been doing it for a long time," said Boehme. Coca-Cola is 129 years old and its iconic bottle is 100. [Helping startups tell their stories sounds like Coca-Cola is moving into the PR business!]
Here's some of my notes from his talk:
- Corporations are terrible at innovation because they have so many processes in place and those processes are designed to protect against any changes to the business.
- As CIO he is always looking for enterprise technologies that can provide his company with a competitive advantage. It won't come from traditional enterprise IT vendors.
- There's no competitive advantage from IT such as ERP systems.
- CIOs are like lemmings, they follow each other, there's no advantage in doing the same as everyone.
- Software is changing everything inside the corporation, it is a competitive differentiator. Being the first to find innovative software is key.
- Boehme wants to find key innovations first, so that Coca-Cola can have at least a six-month advantage. [Why not buy the startup? and keep the advantage for longer?]
- He looks for very small teams, less than a dozen or so, maybe just a year or so old but with a reasonably well developed product, so that Coca-Cola can become the exclusive launch customer. [It's a very narrow window of qualifying startups and with barely tested technologies— it'll require a lot of patience from his IT teams in deployment.]
- Coca-Cola looked at more than 130 startups and whittled them down to several dozen for its training programs, which involved flying the startup teams to Paris, and Atlanta, and meetings with top US execs, Coca-Cola marketing experts, etc.
- Its goal with the Bridge program is to end up with at least one startup that becomes hugely successful, just as VC firms make many investments but just expect one to be big.
-He spoke about some innovative ideas such as the use of high frequency sounds to transmit payments between a soft drinks vending machine and a smartphone. "Only your dog will be able to run off with your credit card info."
- Every smartphone, even if it is in airplane mode, is listening and can be turned on by the right frequencies. Sound could be used instead of Wi-Fi radios to transmit Internet data. Coca-Cola isn't using this technology, yet.
- Coca-Cola came up with a self-disposing bottle after seeing the trash that people left on beaches in Rio de Janeiro. The bottle was made from ice.
- When Dennis Rodman visited N. Korea he was seen on TV drinking a Coke. The State Department wanted to know how he got it. "There's many ways to get a Coke."