“Honda Innovations is a product of all our learnings, operating globally in different hubs around the world”
“Honda Innovations is a product of all our learnings, operating globally in different hubs around the world”
Turns out, I was wearing the right MTB T-shirt for my Mind-the-Chat with Dennis Clark, the Managing Director of Honda Innovations.
The one that says “Evolve or be Extinct“, usually used as our constant reminder to global corporations that yesterday is not always the best indicator of what tomorrow holds. However, in the case of Honda Innovations, the one-stop-shop where the Honda Group concentrates most of its Open Innovation activity, this seems to be well recognized.
The evolution of Honda’s presence in Silicon Valley should be looked at as exemplary for corporations that are considering expanding their footprint in the Bay Area. The different models they tested, assimilated and scaled over time are well in line with what we presented in our latest Report on Japanese corporate innovation outposts in Silicon Valley (available to download here).
Namely, started as Honda Research Institute, then added a CVC unit and R&D team in 2011, and finally morphed in 2017 into Honda Innovations, a separate ~50 people company running 2 major programs:
- Honda Xcelerator:
a co-development program that aims at collaborating with 20-30 startups per year, providing non-diluting funding, and, sometimes, off-balance equity investment. The core is to scale beyond a PoC.
SoundHound (now included in Honda-E model) and Drivemode (the “first ever tech startup acquisition in Honda history”) are 2 tangible success stories of the program - Honda Developer Studio:
an developer relation play, focused mainly in the CarPlay and Android Auto ecosystems
“Having Honda as a partner opens a lot of doors”
“Having Honda as a partner opens a lot of doors”
A few other highlights to treasure from the well spoken Dennis:
- It’s key to stay involved with the BUs: having roadshows with select startups @ the company HQs (15K+ in case of Honda R&D) can be costly but was key to establish credibility (inside and with startups). Aim for a “multifaceted approach”
- If you are planning to establish an innovation antenna in Silicon Valley: is paramount to hire local and commit for the long term (otherwise it’s a waste). You can do that while staying lean (“Genba” concept in Japanese)
- We are now in “finding mode” to reevaluate again what Honda Innovation value proposition should be (“evolve or be extinct”…)
Enjoy the chat!
“Corporate innovation units need to be flexible and with a multi-faceted synchronized approach with BUs to work at best”
“Corporate innovation units need to be flexible and with a multi-faceted synchronized approach with BUs to work at best”
TIMELINE:
0.55 An untraditional path: from Economic Development to Venture (and Honda)
3.31 Honda Group: 70 y.o. starting as motorcycle producer, now 5M vehicles but also Corporate Jets
5.40 From Honda Research Institute, to CVC unit and R&D team in 2011 -then 2017 Honda Innovations
9.27 Honda Excelerator
13.10 Size of investments: SoundHound (2018) and Drivemode (acquired, 2019)
18:40 Connections with the Business Units
21.50 Looking at “moon-shots”
22.03 Honda Developer Studio (CarPlay + Android Auto)
23.40 Startup Studio model
25.10 KPIs of Honda Innovations
28.13 Our roadshows with cool startups
30.02 Where is Mobility going?
37.15 Lessons learned: start lean, be committed for long term
41.30 What are the opportunities for SV startups with Japanese companies
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