One of the most daunting things for startups and the reason they may choose to not pursue their idea is the force of the enterprise. The immense power enterprises seem to possess – more specifically, the seemingly endless supply of winning ideas they produce time after time can be intimidating. Fortunately for startups, we’re here to break the myth that enterprises get it right every time.
How do we plan on doing this? By shedding light on some of the (not so) secret startups behind the biggest enterprises out there.
Snapchat Sneaks Startup Innovations Into App
Back in 2013, Snapchat turned down a $3 billion cash offer (and didn’t balk at the scare tactic Mark Zuckerberg used on CEO, Evan Spiegel), showing that Snap had big plans. Fast forward to 2017, and it seems they were onto something – building a business for the long run. Today, Snapchat has one of the most loyal user bases, with 2017 showing a 36% increase of Snapchatters, bringing them to over 166 million daily active users. Part of Snapchat’s ability to remain at the forefront of communication innovations relies on their continual release of new tools and features – and that is best done by (you guessed it) tapping into the strength of innovative startups and bringing them in-house to further propel their company.
In August 2016, Snapchat purchased Vurb for $114.5 million – while not their costliest acquisition, it is certainly one of the more interesting ones. Vurb is a mobile search and recommendation solution that solves the biggest problem Snapchat users face – discoverability. Integrating powerful search and recommendation capabilities, alongside the talent behind the technology, is a quick leap in the direction of paid recommendation campaigns within Snapchat.
The December 2016 purchase of Israeli Augmented Reality platform, Cimagine, further strengthens the belief that Snapchat is on their way to unveiling a new advertising platform. Cimagine allows consumers to visualize products within their home using AR technology and would be a huge boost for eCommerce brands looking to increase conversion and sales through the Snapchat app.
The Ones Behind Mobile Assistants – Siri, Google, and Alexa
Today everyone knows that saying “Hey, Google” or “So, Siri” can provide anything from restaurant recommendations to traffic updates, however these powerful mobile assistants we so frequently rely on would probably not be where they are today without a few secret startups.
In 2010, Google already recognized the need to bring in external power to boost their mobile assistant feature and purchased Aardvark for $50 million. The startup, which boasted a powerful search volume, was based on socially generated answers to questions, however, within a year, the project was closed, leaving Google in need of a solution that would propel their AI assistant. In 2012, Google found their solution and bought University of Toronto based startup DNNresearch Inc, that improves voice and image recognition and later in 2015, Google took a stake in Mobvoi, Chinese voice recognition startup, showing that sometimes, the secret startup is actually a combination of innovations.
Not to be outdone by Google, Apple knew they needed to push their AI assistant forward and fast – and luckily for them, a small startup called Siri just happened to be in the right place at the right time. In 2010, as Google was struggling with Aardvark, Apple was on the way to revolutionizing the mobile assistant world with the integration of Siri in their operating system. While the exact price tag on Siri was never revealed, it is estimated that Apple paid between $100-$200 million for the early stage startup, and considering the frequency with which we hear “Hey Siri” today, it seems like it was a good deal!
While talking about mobile assistants, one can’t leave out Alexa – even though not a mobile assistant, the Amazon AI speaker has come a long way in terms of innovation and has definitely given Google a run for its money with Google Home. Much like Google and Apple, Alexa was not entirely a home-run-hitter from the home team. Alexa purchased voice recognition software Ivona in 2013 from a Polish startup and quickly integrated the technology within the Kindle Fire before undoubtedly using it to propel Alexa forward to the AI powerhouse it is today.
Monetization Innovations Propelling Companies Forward
Since digital success relies on a company’s ability to generate revenue, it’s important that enterprises have strong advertising platforms to promote and increase their value. While it is very difficult to create an in-house revenue generation platform, it’s a lot easier to purchase one, integrate it, and scale it up – and we’re not the only ones who say so. Many startups in the field of mobile and desktop ad generation have been snatched up by big enterprises looking to improve their ability to deliver highly targeted ads across all devices that increase conversion and therefore desirability by customers.
Facebook, the undisputed king of monetization, almost lost their footing when video became the biggest thing in mobile advertisements, so of course, they looked for a quick solution that could secretly take them forward; and they found it with Liverail. The startup, which connects publishers to video ad targeting technology, offers powerful real-time bidding solutions for companies looking to improve their video campaign ROI. The innovation was so desperately needed by Facebook that they purchased it for a reported $400-$500 million!
Twitter, also recognizing their need to offer a proprietary advertising platform, turned to MoPub in 2013 and purchased the company for $350 million with the hopes of changing the way companies use Twitter to boost their business.
Being the Secret Behind a Larger Company
As was made clear above, enterprises are continually searching for ways to stay at the forefront technologically. Startups that build solutions that are simple to integrate and scale have a high probability of appealing to enterprises. Ultimately, creating a win-win solution in which the startup is acquired and the enterprise is elevated in value or market share position is the desired goal.
What startups can do to continue being the go-to-guys for enterprises is continue building solutions with future collaborations in mind and try to gain validation that their innovations or features work. How can one do this? Through PoC’s with large scale enterprises.
If neither party wants to spend time shooting arrows in the dark, it’s best to find a digital platform that brings together enterprises in need of innovations and startups with unique solutions… and if you’re here you already know – prooV is the PoC platform to help you do exactly that!