Lab Box – Corporate Startup Studio of D’Ieteren Automotive
D’Ieteren Group is a Belgian family owned business conglomerate created in 1805 which seeks growth and value creation by pursuing a strategy on the long term for its businesses internationally and actively encouraging and supporting them to develop their position as a leader in their industry or in their geographies.
Early 2017 D’Ieteren Auto, a subsidiary of D’Ieteren Holding, created Lab Box, a corporate startup studio, as part of the D’Ieteren Auto 2025 vision to become the natural choice for mobility by improving such mobility for people and goods.
Lab Box was set up to create companies the way factories create high-priced widgets: efficiently, systematically, and for the greatest monetary upside. Lab Box leads this problem/solution process within the parameters of the corporate goals while D’Ieteren Auto offers powerful assets, i.e. car leasing, being an early customer, sector expertise, network and financing of Lab Box.
In a first phase the Lab Box team identifies opportunities and tests solutions, benefiting from a high focus and agility in the mobility sector.
In a second phase Lab Box attracts top tier external talent and partnerships.
Finally, in a third phase it scales the created businesses. Lab Box gradually evolves from an inside-out creator of businesses to a sounding board investor role, creating the opportunity for certain portfolio companies to obtain external funding.
In 2.5 years, Lab Box has launched or acquired 7 projects/companies with the goal to move towards the 2025 D’Ieteren Auto Vision to become the natural choice for mobility.
Michaël Grandfils, Managing Director, and David Millan, Chief of Staff, shared the following insights regarding the establishment of corporate incubation labs:
• Program design: if well designed, corporates can greatly benefit from the creation of inside-out innovation labs for the creation of new innovative businesses which are core or adjacent to their main businesses. It is very important that the startup studios treat both their corporate parents as the created businesses on at arm’s length basis.
• Deep expertise: only providing a co-working space is not sufficient. To establish a successful program the corporate needs to also provide subject matter expertise, industry knowledge, mentoring, access to its business network and a strong financial position, allowing for the generated ideas to be properly funded and bloom into profitable, stand-alone businesses.
• Strong teams: good entrepreneurs are hard to find and are crucial to ensure the success of a new innovative business. They need to be incentivized as if the start-up is created outside of the corporate realm, providing in appropriate and customary equity packages for retention purposes as well as well thought through internal or external liquidity strategies.
• Long-term strategy: a corporate needs to have a very clear strategy as regards its long-term intentions in respect of the created businesses for all stakeholders involved. Absolutely core initiatives are unlikely to ever be sold by the corporate, thus requiring full integration strategies to be implemented, while non-core initiatives are likely to be funded externally and ultimately sold to a third party.
• Commercial collaborations: in order to maximize the potential benefits of the inside-out incubation program, the corporate should be ready and willing to really engage with the startups in the program and open its entire commercial network and opportunities to the startup.
• Incentives Startup Studio: not only do the entrepreneurs need to be properly rewarded and retained, the same applies to the Startup Studio team which should be highly competent and thus be appropriately rewarded on the basis of the success of the startup studio and its portfolio companies.