Transcript

00:00:05:16 - 00:00:22:14

Sarah

Hello and welcome to a very special episode of the IAA Mobility Visionary Club. Today we are talking about the importance of startup fueled innovation for the automotive industry. I have two special guests here to break it down for me. Let me introduce them or better yet, you guys introduce yourselves. Stefan, you start.

00:00:22:20 - 00:00:34:14

Stefan

Great idea. Thanks, Sarah. My name is Stefan. I'm working at CARIAD. That's a software daughter of Volkswagen. And there I'm responsible for the startup scouting and collaboration system.

00:00:34:19 - 00:00:38:13

Sarah

All right, the perfect guy to talk to you about the importance of collaboration. Jürgen, tell us about yourself.

00:00:39:07 - 00:00:49:21

Jürgen

Yeah. My name is Jürgen Bilo. I'm heading the startup organization of Continental, which we call co-pace. And we are taking care of partnering and investments into startups.

00:00:50:00 - 00:01:09:23

Sarah

Okay, very good. Well, it's going to be a great talk today. I do want to set a couple of ground rules. This is YouTube. We're all living busy lives. We're only going to give you guys 30 seconds for your answers. And I do mean 30 seconds. We've got a clock here. We're going to put the clock on. And when we get to 30 seconds, there's going to be a loud noise that will tell you to stop.

00:01:10:09 - 00:01:17:01

Sarah

I know this doesn't happen in your meetings, but that's how we're going to do it today. So who is feeling brave and who wants to go first?

00:01:17:12 - 00:01:18:08

Stefan

I guess I can do that.

00:01:18:09 - 00:01:26:08

Sarah

I love your enthusiasm, Stefan. Okay, let's get 30 seconds on the clock for Stefan. Tell me, what does CARIAD currently do to collaborate with startups?

00:01:26:18 - 00:01:49:20

Stefan

Well, the thing is, corporates often tend to collaborate with startups just for the sake of collaboration. And the problem with that is that they don't solve any purpose, they don't solve any problem. So that's why we at CARIAD, we built up this venture client unit called CARIAD Next, where we focus on identifying problems in our company and solve it with startup solutions and becomes a customer of the startup.

00:01:50:07 - 00:02:03:21

Sarah

All right. So you have to actually be solving a problem. You solve the first problem answering in 30 seconds. Well done. No pressure working. But now this question is to you Why did Continental build their own startup organization and what benefits does that actually bring?

00:02:03:21 - 00:02:21:06

Jürgen

New technologies are essential as well as new business models are essential for the future of mobility. And that is basically the reason why we built up that startup organization. You could say we are kind of catalyst to working with startups and external partners. We make it happen.

00:02:21:24 - 00:02:32:19

Sarah

You make it happen, and you made it happen under 30 seconds. Very well done. Nice, nice. But still another round of questions to go. Stefan, what could CARIAD in general learn from startups?

00:02:33:09 - 00:02:59:03

Stefan

Well, the thing is, one of the biggest problem of the industry is digital transformation. I mean, CARIAD itself. It was founded to enable the Volkswagen Group to become a software driven company and startups by themselves they have it from the beginning. They have it in their DNA, it's their purpose. So in my opinion, we can learn a lot from that by just seeing how they approach problems and how they solve it.

00:02:59:17 - 00:03:11:06

Sarah

Right, right on the money. Here we go. And next question to you, Jürgen. What freedom does co-pace have within your organization and how does the collaboration actually work?

00:03:12:24 - 00:03:35:07

Jürgen

I think we have a lot of freedom. We are a separate legal entity. So we are a little bit free in that what we do. And with this we can act very fast. Also, we do have the mission of co-pace aligned with top executives. We have an advisory board with the board members every three months. And in between that we are more or less free.

00:03:35:07 - 00:03:39:03

Jürgen

How we do what we do and in which fields we work.

00:03:39:11 - 00:03:41:01

Sarah

That's 30 seconds. Okay.

00:03:41:01 - 00:03:41:13

Stefan

Still counts.

00:03:41:14 - 00:03:50:21

Sarah

You guys are doing pretty good keeping to time. I'm impressed, but still a ways more to go. Stefan, what benefit does CARIAD offer to startups? Why should they partner with you?

00:03:51:16 - 00:04:16:18

Stefan

Well, the thing is, there's a lot of we see money around already. And what was lacking was that there was like no point where startups could find a good customer in the corporate environment. And I think becoming this good customer and enabling CARIAD to be this good customer is a big benefit because having this name on your list as a customer can also attract

00:04:16:18 - 00:04:17:24

Stefan

very good VC again.

00:04:18:06 - 00:04:32:04

Sarah

All right, final question and then we'll move into sort of a more open discussion where I promise you'll get a little bit more than 30 seconds. But last question to you, Jürgen. There's a lot of incubators. What is co-pace offering that others aren't?

00:04:33:15 - 00:05:00:08

Jürgen

You have to think about why do startups come to corporate? Startups come to corporates because we can scale, we can proof the technology, and we have access to a huge market. So what we offer is basically we are kind of gearbox between the startup and the corporate. We basically bring the startup to the corporate and make it work within the departments and basically find a solution which we bring to the roadmap.

00:05:00:19 - 00:05:23:19

Sarah

Oh, just under the money. All right. We'll let that slide, we'll let that slide. So now we can all relax a little bit. The 30 seconds part is over for now, but it's coming back. That clock is coming back. Let's have a little bit more of an open discussion. What could large corporates do to foster a more collaborative environment and see innovation really successfully implemented and accepted?

00:05:24:12 - 00:05:25:09

Stefan

That goes to me again.

00:05:25:09 - 00:05:27:13

Sarah

I think we can all jump in. It's free form now.

00:05:28:18 - 00:05:50:20

Stefan

All right. One thing is what I've experienced was this not invented here syndrome. When you work with with your departments, with your technical problems, everybody thinks they can solve it by themselves. And when we started this collaboration, there was kind of an eye opener within the technical departments like, well, I don't have to do this all on my own.

00:05:51:13 - 00:06:05:19

Stefan

I can I can ask for help. And what happened is that after the first collaborations, they came back with their own ideas and saying, like, Wow, I have this exact idea. Is there a way we could do it? Maybe found a company or collaborate with startups? So kind of hits the spark there.

00:06:05:22 - 00:06:09:00

Sarah

Okay. What about you? What do you think large corporates should be doing?

00:06:09:02 - 00:06:36:24

Jürgen

I mean, first of all, you have to have the right mindset and you have it's a leadership task basically to implement startups and startup solutions into your company. That's one thing. And then you basically have to have the room and the resources in the R&D departments and in the departments basically to allow that this startup is really happening.

00:06:38:00 - 00:06:48:14

Sarah

How do you make space for those resources and how do you check as a startup to see are they actually there? Because sometimes when you're signing up like it's all well and good, how do you know what you're actually getting yourself into?

00:06:50:06 - 00:07:18:09

Stefan

Well, it's to be honest, it was the first task we had to do because, like, there's always a lot of regress in working with startups in general because the startup itself was kind of sexy for the, for the technical departments, but setting kind of criterias and ground rules so that we always have this problem first was kind of a good start to leverage success.

00:07:18:09 - 00:07:19:08

Sarah

So, start with the problem.

00:07:19:09 - 00:07:20:20

Stefan

Start with the problem. Absolutely.

00:07:21:09 - 00:07:24:00

Sarah

What about you? Start with a problem or is there another approach?

00:07:24:06 - 00:07:50:01

Jürgen

We basically, when we see a startup, first of all, we are looking at do they solve a problem first of all, but also long term, can they bring value to the company? And can we bring that startup finally to the roadmap of our business units? Yeah. Is that really possible? And saying that we are doing also a kind of little due diligence.

00:07:50:01 - 00:07:56:20

Jürgen

Also, we do not invest, we just do a proof of concept or partnering. We do a kind of due diligence of the startup.

00:07:56:24 - 00:08:05:13

Sarah

All right. Quick lightning answer. One piece of advice for large corporates. What do they have to do to become more innovative?

00:08:08:00 - 00:08:14:10

Stefan

I would say open up for partnership in general. It doesn't have to be startups, but like.

00:08:14:16 - 00:08:15:07

Sarah

Partnerships in general?

00:08:15:07 - 00:08:18:15

Stefan

Be open for a partner. It could be your biggest customer and learn from him. Yeah.

00:08:19:08 - 00:08:20:07

Sarah

Partnership. What would you say?

00:08:21:03 - 00:08:41:11

Jürgen

I can only really mentioned that already. Mindset and leadership is key. Yeah. And we have to be curious. You have to be also we have to be fast in execution and we somehow have to gear to the speed of the startup, to the speed of the outside world. That's very important.

00:08:41:15 - 00:08:55:22

Sarah

All right. Speed is essential. Guys, I feel like you've gotten too comfortable now with these long answers. We're going to move back in to another lightning round, 30 seconds. And Stefan, you went first last time. So Jürgen, I think you should go first this time. Are you ready? Can we get 30 seconds on the clock?

00:08:55:23 - 00:08:56:24

Jürgen

Sure, sure, sure.

00:08:57:12 - 00:09:00:06

Sarah

What is the ideal startup for co-pace? What's your dream startup?

00:09:01:05 - 00:09:22:10

Jürgen

We have high expectations to the startup. We are looking on one side to the technology or the business model. So what is the IP? How profound is it? What is the USP? What's the differentiator? And on the other side we look to the entrepreneur and the technical people. Are they really competent? Can they discuss on eye-level with the corporate?

00:09:22:14 - 00:09:29:19

Jürgen

Yeah. And again, can that lead this whole set up this whole cocktail? Can that lead to real product?

00:09:30:04 - 00:09:44:24

Sarah

I let you continue because you said cocktail, which is one of my favorite words. Something I think we're all entitled to after this lightning round. Okay, so you're saying it's a cocktail. Stefan, tell me, what role do startups play in developing new technologies and give me tangible examples here.

00:09:45:21 - 00:10:09:05

Stefan

Well, like you can see it in the automotive industry all along. To start with with Mobileye, for example, right. They started as a small startup. Now they are like one of the biggest suppliers to many OEMs around the world and enabling this autonomous driving solution and also you can see like Tesla who bought DeepScale to enrich their autopilot, you can see this all around.

00:10:09:05 - 00:10:13:18

Stefan

And even in Germany we have Isar Aerospace.

00:10:15:21 - 00:10:16:22

Stefan

I guess I'm over it.

00:10:16:23 - 00:10:31:14

Sarah

I think we're done. Sorry, we have to leave it there. What does co-pace and Continental as a whole hope to get out of the collaboration? Is it to eventually take the startup in and make it part of Continental? What's the endgame here?

00:10:32:19 - 00:11:01:12

Jürgen

I mean, I think I said that before. The end game is I mean, we are looking for strategic and operational, relevant topics and relevant startups and companies. And we want to bring these companies to the road map of the business units. We basically want to create new product. We also are looking to even a new product portfolio or new, new new new strategies.

00:11:01:16 - 00:11:09:13

Sarah

Strategies. We'll have to leave it there. Speaking of strategies, what advantages do startups have over some of the established players in the industry?

00:11:09:23 - 00:11:36:21

Stefan

Oh, that's an easy one to be honest, like if you look at startups, they are focusing like crystal clear on one niche, on one problem and regular suppliers they have to go to a broad audience. Right, and solve everybody's problem. And startups don't do that. They have this one thing and also on the other side they are accessing this billions of billions of dollars venture capital market and just imagining and department accessing this kind of R&D money.

00:11:37:18 - 00:11:38:05

Stefan

That's awesome.

00:11:38:13 - 00:11:45:14

Sarah

All right. Give us a tangible example of a success story that's come out of co-pace. Brag a bit.

00:11:46:04 - 00:12:14:03

Jürgen

Let's talk numbers first. We looked at round about 200 startups over the last five years, which we really validated and look to. Out of that, we generated round about 25 partnerships and invested into 17 startups. That's what we did. Tangible examples. We are here today at the VDA Future Tech Day and what we see here, two startups out of our portfolio.

00:12:14:23 - 00:12:18:24

Sarah

Nearly, nearly, nearly. But since you were talking about startups, we'll give you two more seconds.

00:12:19:07 - 00:12:45:21

Jürgen

Yeah. Today here at the VDA Future Tech Day, we do have two startups out of our portfolio, our investment portfolio here at stage this is Autobrains and it's Apex.AI and we for example Autobrains, you asked for a tangible example. 2018 we started with Autobrains. We did several POCs and we are now working on products with Autobrains.

00:12:45:21 - 00:12:50:18

Jürgen

With camera perception products. And we also invested into that company.

00:12:50:20 - 00:12:51:24

Sarah

All right. Very cool.

00:12:52:05 - 00:12:54:21

Stefan

Awesome companies. Absolutely. Can't wait to see them in action.

00:12:54:22 - 00:13:11:10

Sarah

Yeah. Apex.AI is also doing some really interesting stuff. I was speaking to their founder last week. That's an exciting one as well. I think we've come to our very last question and it goes to you, Stefan. When you're scouting out startups, what's your geographic focus? Are you looking Europe? Are you looking globally? Where is your attention?

00:13:11:20 - 00:13:35:00

Stefan

I mean, the pandemic has shown like there is no more borders. Right. And that also calls for us. We are looking globally, not just Europe. Could be like in some case it makes sense to do as POC in Germany and not in the US or in Asia, but in general we have like no borders on this one. Also CARIAD is around the globe if placed in India, China or everywhere.

00:13:35:11 - 00:13:56:24

Sarah

All right. Everywhere there are startups, there will CARIAD be. We have a few more minutes now for a discussion. We will not use the clock. You can just relax a little bit. You are great sports about that, by the way. Thank you. Let's put on our thinking caps and maybe get out our wish list and talk about what does the ideal ecosystem look like? In a perfect world

00:13:57:07 - 00:14:02:06

Sarah

how would startups and corporates collaborate?

00:14:02:06 - 00:14:27:21

Jürgen

I mean, I would say it pretty simple. You know, the ideal ecosystem is for me, you know, you have universities, you have venture capitalists, you have accelerators, you have corporates, but you also have thought leaders around. So people who think over and beyond the "today". And you also need some industry veterans, I think, because they can really judge what does it take to scale?

00:14:27:21 - 00:14:57:09

Jürgen

What does it take to industrialize? Yeah, and that's that's truly important. And last but not least, it's important that you have different verticals which you look to in an ecosystem, for example, insurance tech and auto tech and finance tech, etc. For us, we are generating data with the cars here at Volkswagen, Continental and other companies. And and suddenly insurance tech is important for us.

00:14:58:23 - 00:15:02:01

Sarah

I heard you nodding along with verticals. Is that something you agree with?

00:15:02:03 - 00:15:18:00

Stefan

No, I would agree with everything, to be honest. Like the synergies with all these vehicles, you have to be honest. It's the most important and something I wish to see more. How do you say it like, what is the song, Ebony and Ivory in perfect harmony? Is this something similar.

00:15:18:00 - 00:15:18:22

Sarah

Are you gonna sing for us?

00:15:18:22 - 00:15:19:21

Stefan

Not now, not today.

00:15:19:21 - 00:15:22:20

Sarah

You'll get an extra point if you sing. - After the cocktails, maybe. - All right, that's a deal.

00:15:23:15 - 00:15:41:04

Stefan

But yeah, I mean, I would love to to see more big corporates having in mind becoming customer and giving this customer feedback back to start ups. Because I think what they what they need to be honest and we see our fostering all this innovation that create.

00:15:41:11 - 00:15:43:24

Sarah

So you feel some feedback element is missing.

00:15:44:14 - 00:15:46:14

Stefan

Yeah about I think it's growing to be honest.

00:15:47:12 - 00:16:18:24

Jürgen

I mean for me the question is how do we bring things to the next level? You know, we are talking about incremental innovation. We also want to talk about, you know, disruptive innovation. So and for that, it's really important that you outside in a get impulses and all that. And of course, if you have a super ecosystem like, let's say in Israel, but also here in Munich where we are today, you can get that.

00:16:18:24 - 00:16:39:18

Jürgen

And then the artwork is how do I bring that into the corporate and how do I get the corporate up and running and, you know, engaged in that and get the top executives engaged in that. And that is very important. And that is our major task beside investing and all the formal stuff.

00:16:40:21 - 00:17:00:14

Stefan

What I would add to that is: Let the people do their job, to be honest, because what I see very often is that few corporate VCs, they invest in startups and now they're things they can kind of talk into their product and want to change that and something, to be honest, that kills the startup and innovation. So let each pillar do their job.