Insights into running our second corporate accelerator
By David Parfett, Head of Group Innovation and Ventures, Qantas Group
David Parfett is one of Australia’s leading innovation and venture capital executives with over 15 years’ experience in leading execution of creative strategies that enable businesses to grow and optimise their performance. He has established and lead Qantas’ corporate venture capital arm, designing and incubating digitally-led greenfield business ventures, driving product and business model innovation, forging business alliances, executing complex M&A and capital raising deals and devising strategic plans. David shares some insights on running the AVRO Accelerator, now in its second year.
Why did Qantas commission the second AVRO accelerator?
For us, the AVRO accelerator is all about finding new technologies, products and services for our customers, our people and operations. It’s about finding answers to questions we haven’t even asked. Given the success of the inaugural program last year, we wanted to continue the momentum as both a program and brand in the Startup ecosystem. We understand that a consistent, reiterated process is important in any transformational journey.
What were your expectations in terms of outcomes before launching the program?
We absolutely knew that to deliver on innovation outcomes, we needed a process to look outside of the organisation. We expected that AVRO would help us increase our breadth of thinking by gaining early insights on trends and emerging tech, allow us to leverage the external ecosystem to increase capacity and speed to market, and over time, deliver attractive returns to the business.
How does the accelerator support the broader strategy for innovation at Qantas?
My team is principally responsible for supporting the broader Qantas Group across three main activities.
- Supporting the core business design, to validate and deliver “incremental” innovation initiatives
- Lead the sourcing and incubation of new greenfield plays – we call that “incubation”
- And thirdly, we also have a venture team responsible for our early stage investment activities
Our stage focus is primarily Series A & beyond but having said that, programs like AVRO allow us to make smaller investments in seed stage companies. So, it’s the accelerator’s ability to source and the development those businesses that makes sense. Having a disciplined process, which an accelerator offers, to support this strategy allows my team to focus on a broad range of activities.
What insights or learnings can you share with other corporates who are looking to innovate?
Australia is definitely not as mature as other markets in the northern hemisphere when it comes to corporate innovation. Culturally, corporate Australia sits back and waits to be nudged to look beyond the horizon on where their growth is going to come from. Ownership for corporate innovation must be a board directive and measurable against not only long-term growth, but the cultural impacts inside an organisation. Having a strategy and process is fundamental to drive change. It’s not a one-size fits all approach for everyone and your industry, timing and customers will dictate your strategy. Education and knowing what your options are is the best starting point. Whether that be a fund, an incubator or accelerator, there are merits for all these things.
What do you foresee to be the biggest challenge during the program this year?
We learnt last year that an accelerator has lots of moving parts and mobilising an organisation our size takes extensive planning. We are on the front foot but it will likely be challenging again to lead swift change and decision making. My team is better equipped now to act on the key day to day requirements of AVRO to ensure internal traction and quick outcomes. Without this, we couldn’t deliver on our value proposition to Startups and Scaleups.
What do you foresee to be the biggest benefit (expected or unexpected) this year?
This year, we had a fantastic response from later stage business (Scaleups) who already have market fit and traction so we are working towards delivering a solution to the Qantas Group within three months of commencing the program. Working with such great founders and teams where agility, frugality and pace are second nature also creates great learnings for Qantas. It’s all about these outcomes.
What are the outcomes delivered (e.g. customer deal, investment, trials, etc) by the program to date?
Given the aim of the AVRO is to find the next generation of businesses to help us grow, the 2017 cohort discovered ideas that we would never have developed off our own back like Mad Paws and Volantio.
The other thing that AVRO has done is accelerated strategic conversations that were otherwise on the backburner and challenged our internal processes (forcing our procurement, legal and IT teams to think differently) and engage with partners.
What’s next for AVRO?
We are in the process of selecting the 2018 cohort. All the founders who pitched were screened by relevant business units, but for an organisation our size, now that we have seen the pitches, we need to think again on where we may invest, what parts of the Qantas Group could use this product or service and how to drive engagement. So it’s quite a process around business unit engagement and getting that buy in across the different layers of management. The program kicks off on 17 July so we will announce the cohort around that time.