Retail Innovation Tech Alliance: how to properly apply for a pilot with a corporation

Retail Innovation Tech Alliance: how to properly apply for a pilot with a corporation

The Retail Innovation Tech Alliance (RITA) has carried out three selections of technological solutions for about a year of its work. Experts from X5 Retail Group, Beeline, M.Video-Eldorado Group and Hoff reviewed 680 applications from companies that are interested in joint pilots with these corporations.

RITA selection operator – GoTech Innovation – has collected useful tips on how to properly fill out an application for startups to get on a corporation's radar.

Be in focus

The application form is on the alliance website is available here. Before you start filling it out, you should study why the Retail Innovation Tech Alliance was created, which corporations are part of it, and what their goals are.

RITA is not an investment alliance. Its members did not come together to invest in startups. The main task of the four corporations is to find and implement new technological solutions and products to develop their business.

Before taking part in the selection, it is important for a startup to understand that it should not count on a “small victorious war”. Before starting work on a pilot project in a corporation, it can take about 6 months. The application is only the first step. Then, at the end of the selection, an individual assessment by the corporation is carried out, a discussion of the presented solution by all partners of the alliance, a startup’s presentation of its solution to experts within the Demo Day and individual meetings with representatives of corporations.

What signs of a technological solution become key for you when choosing a startup for cooperation and further pilot?

Denis Levchenko, Head of Innovation at X5 Retail Group:

“For 3,5 years, more than 2,500 startups got into the X5 innovation funnel, 1,100+ solutions underwent a deeper assessment with business experts, some of those entered the business modeling phase, more than 150 startups entered the prototyping/pilot phase, 26 projects reached roll-out. Many pilots moved on to implementation, they have become part of the business and are beginning to generate results. The main reasons why certain solutions do not move to the implementation stage are quite obvious:

  • the technology does not work as it should;
  • the business hypothesis is not confirmed or the impact on the process is below our expectations;
  • the cost of the technology during implementation is too high: for example, in terms of scaling risks or long payback periods (usually in infrastructure projects where a lot of hardware is required)".

Sergey Semenchenko, Lead Manager for IT Solutions Development at M.Video-Eldorado Group:

“RITA participants are leading players in their segments with a developed IT infrastructure and a clear plan for its further development. M.Video-Eldorado, within the framework of the alliance, is looking not so much for solutions for the already clear current business tasks, but for a new look at these tasks, whether it be customer services or the efficiency of business processes. And in this case, the frequent “we will do whatever you ask for you” approach does not work, since the basic needs are already covered. Over the past year, within the framework of RITA, M.Video-Eldorado reviewed several hundred applications, more than 30 projects are now in focus – from detailed negotiations to the implementation of the pilot. We are looking for new ideas, outstanding technologies, perhaps products for which there is no demand yet, and it is just being formed. Mutually useful and effective will be a clear description of the essence of the product, what is its innovation and how it can be integrated with current industrial solutions. It is very good if there are relevant implemented cases, even at the pilot stage." 

Important information

The key points in the application for a startup will be: a brief description of the product (Elevator Pitch), a story about previous pilot projects, if any, and a scenario of a potential pilot with one of RITA partners.

At the start of each selection, RITA formulates in which directions this time priority will be given in the search for technological solutions. It is important to understand this when filling out the application – you should provide information about the project that meets the tasks set by the organizers. If the data about your solution or product is under the NDA, then in no case put a "dash" in the corresponding column about the project description. Indicate this fact. 

Despite the fact that projects of various stages can participate in the selection, the partners of the alliance give priority to startups that have a working product and pilot experience. Less mature solutions can also be interesting for corporations, but they need to be bright to catch the attention. And the process of their consideration and further implementation will be much longer.

Among other characteristics of a startup, RITA partners often pay attention to previously attracted investments that characterize the maturity of the company, recognition of the professional community (various ratings, competitions or awards), and achievements. In the last point, it is important, first of all, to talk specifically about the startup, and then about what the people who are part of the team have achieved. At the further stages of selection, feedback from previous or existing clients of the company, as well as experts who collaborate with the startup, may be useful .

If a company has developed several products, then for each of them you can submit a separate application as part of the selection. But it is important to show the key differences between them so that experts do not think that you are talking about the same thing.

What qualities of a startup do you pay attention to when studying an application? What is especially important to you?

Denis Levchenko, Head of Innovation at X5 Retail Group:

“A startup should be organized as a valid legal entity and have its own product/service or technology that solves the client's current business problem. Of course, the readiness to go through the acceleration stage is important. Our main expectation from new solutions is to optimize the current business, increase the efficiency of business processes, reduce costs, and improve the customer experience. When selecting start-ups , we prioritize decisions that have a positive impact on P&L (for example, personnel costs, operating costs, logistics costs, shopping basket, which in turn will be reflected in an increase in RTO)".

Lev Samsonov, Innovation Manager at Hoff:

“In addition to important basic features, we pay attention to the level and quality of innovation applied in a startup. For example, when we see projects that are located in fairly saturated markets, where competition is due to dozens of additional features, a healthy desire arises to test the project within the framework of a linear business and understandable linear procedures. But often startups cannot describe in a qualitative way how they differ from other players or highlight a killer advantage worth paying attention to. I would recommend thinking about what you are changing with the help of technology in the existing processes of the company, which routines or processes you are replacing (faster, cheaper, better), and ideally formulate your value in the format “what was previously impossible but became possible with the use of your technology ", and this is the main focus".

Tatiana Vybornova, Senior expert on the development of new markets at Beeline:

In the current agenda of work with startups, Beeline focuses on finding new ideas and resources to expand our product line with new telecom-independent services that we can offer to our customers, both private and corporate.

For Beeline, an ideal startup is a combination of different parameters, for example, the uniqueness of the technology, the difference from competitors in the market, the value of the product, the level of involvement of the customer base in the product, the trust and willingness of the founders to be flexible and ready to work with us. And RITA is a very important source of this value inflow in startups for us.

A startup also benefits from a partnership with such a corporation as Beeline: rapid business scaling through our sales tools, promotion, infrastructure, expertise, customer knowledge.

Ekaterina Antonova, Head of the Center for Innovation and Partnerships at Beeline Business:

Within the framework of the alliance, Beeline Business is looking for solutions that:

  • are able to strengthen the existing product portfolio of Beeline Business;
  • create synergy with Beeline Business services;
  • we focus on cooperation with Partners/startups ready for joint commercial launch and product launch with Beeline.

The process of selecting startups for a joint project with Beeline Business is as follows: when considering a startup application, we assess the partner solution for compliance with the B2B strategy, compare it with the existing product portfolio and roadmap for the development of Beeline Business products, look at the existing product implementations or pilot experience. We evaluate the synergy – whether we can use our services and the capabilities of a large company (sales and service channels, recommendation engines, our own services) to make the product develop faster and become more competitive. Next, we are preparing for a commercial pilot to launch a partner solution to the market: we check the demand from our corporate clients and conduct CustDev, test the product, and agree with the Partner about cooperation. Then, within 1-2 months, we launch the most interesting and proven solutions into the market (for sale) and already at the stage of a commercial pilot we strengthen the partner's solution with our technological and administrative capabilities. Solutions tested with a pilot supplier in "field conditions" will be studied and implemented in production if the pilot is recognized as successful.

Errors

As already mentioned, there are a lot of applications in each selection. Therefore, a startup presenting a technological solution needs to distinguish itself favorably against the background of competitors, it is not worth overloading information. For example, experts will not be interested in what conferences founders or startup employees participated in as speakers. For the solution of their current task, this information does not make any practical sense.

It is better to avoid mistakes in fairly simple paragraphs of the application: indicate the number of customers, not users, revenue, and not some other financial indicators. In their turn, the organizers, when they doubt the information provided, try to clarify with the applicant the data that they consider to be incorrect. Sometimes in the applications there are factual errors from the biography of a startup - for example, it already had experience of cooperation with one of the corporations forming the RITA, but this is not mentioned. As a rule, such shortcomings occur when the application is not filled out by the founder or a top manager of the company who knows its history. In this case, it is better for the employee to consult with senior colleagues in order not to miss important details.

What errors or shortcomings in the application are especially unacceptable for you (after which you can immediately refuse the project)? 

Denis Levchenko, Head of Innovation at X5 Retail Group:

“We recommend that a startup put a lot of emphasis on the story of their technology. For example, pay special attention to a presentation that

- clearly describes the product with photos/videos/screenshots/sequence of user actions/description of the process before and after, etc.

- offers a specific use case (or several). It is very valuable when here we get new knowledge about how the technology can be applied and the rationale why and how it works on the market with references to already implemented projects

- contains information about the effects of implementation with other clients (or at least hypotheses) - the more detailed, the better – i.e., they reduced the cost of something by XX at the expense of ____, or the product pays off for XX in such and such conditions, etc."

Sergey Semenchenko, Lead Manager for IT Solutions Development at M.Video-Eldorado Group:

“When you look at a lot of applications, a kind of immunity is formed – the long description of the founders' experience and the desire to sell not the solution itself, but the value of its implementation becomes less impressive. Still, our task is to find new cool ideas, a clear structural description of the technology of the proposed product is the “main course” here, and the “side dish” in the form of experience and values can complement, but not replace it."

Feedback

Startups can always get in contact with the organizers by email: startup@rita.vc. All questions of the selection participants are promptly answered here. Be sure to indicate the working contacts of those employees of the company who have the competence to answer direct questions from experts or organizers. It is better not to create an intermediate link in communication.

After submitting the application, the startup receives a letter, which indicates the possibility of authorization and creating a personal account in the RITA system. This is necessary, among other things, to correct your application.

The organizers tried to make the applications as open as possible for all participants in the selection of RITA technological solutions. The TechScout platform, which is developed by specialists from GoTech Innovation, helps them in this. It is a tool for collecting applications by corporations for further evaluation and work with them.

Experts store information about startups here, keep their history, leave their comments. The platform allows organizing the joint work of employees of several corporations at once – all specialists who are interested in this or that product have access to it.

For a startup, TechScout is a profitable platform, since information about it remains here not only within the framework of a specific RITA selection, but also in the future. Thus, the corporation, having the relevant data about the young company, can contact it at any time, if necessary. At GoTech Innovation, we see connecting startups to the platform as the next step in the development of TechScout, which can already create a kind of social network that helps develop corporate innovation.

What advice can you give startups when interacting with a corporation after submitting an application? If a startup hasn't passed the selection, how can it try to go a second try to get your attention?

Denis Levchenko, Head of Innovation at X5 Retail Group:

“We can only recommend not to despair, but to build up competencies and refine the product. After all, it is always important not just to invent a technology or service, but to pack them into a business case with predicted performance indicators and the very value for the shareholder. Therefore, in the interaction of startups and big business, it is necessary not only to develop a solution, but to be flexible, ready to finalize the project and "implant" it into the existing business processes, to remember the economic effect that we want to achieve together. A startup needs to start thinking in terms of business. Admittedly, not all startups are ready for this format of cooperation. It takes patience and investment of time and resources. Often, using just a great idea, you have to create/redo a solution from scratch, turning it month after month into a full-fledged business product, testing with users, developing and integrating it into the organization. Although initially it seemed that it was only necessary to correctly conduct the pitch and "trick is in the bag."

Lev Samsonov, Innovation Manager at Hoff:

“Dive deeper into the current business of potential RITA partners, analyze the problem that your technology solves, but from the side of the corporation. Ask yourself what the corporation is already doing to resolve this issue, what funds are they spending? It is possible to conduct a Cust Dev with potential customers, validate the problem and its scale, and, based on the knowledge gained, structure a possible business case on one page in the “before and after” format. This approach will allow us to immediately see the value of the solution and will help you sell your technology internally. You must understand that the priority for making a decision depends directly on the size of the problem that you are solving with the help of a new technology or a new business model."

Sergey Semenchenko, Lead Manager for IT Solutions Development at M.Video-Eldorado Group:

“Always ask for feedback, we try to honestly tell you why this or that project did not fit. It will not hurt to "work on mistakes", for example, a deeper financial analysis in terms of the potential costs of the business and the final value that it can receive, or options for integrating with existing solutions. Cooperation with small companies on the implementation of specific cases will help to build more constructive work with big business in the future, as there will be specifics and results on hand.”

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