Corporate business’ interest in coworking spaces has sparked innovation as to how they can best integrate into the new industry. Stephen Scott Head of International Airline Group (IAG) Innovation spoke with BCNewt, coworking in Barcelona, to talk about Hangar 51, IAG’s new coworking project dedicated to collaboration with small businesses and entrepreneurs.
Hangar 51 invites startups from around the world looking to enter the aviation industry a chance to partner with IAG in four different categories:
- Improving Airport Process
- Digitising Business Process
- Data Driven Decisions
If the startups have a compelling product or idea they are accepted into the program and have the chance to spend just over two months in the startup accelerator. Within Hangar 51 startups will have a chance to develop and demo a product in one of the four categories and if IAG is compelled they will invest in these companies. The potential financial investment is one of many perks startups stand to gain from the program, they also have the chance to learn from IAG executives how to better appeal to large corporations in the aviation industry, in addition to the Hangar 51 education program.
BCNewt: What sparked the creation of an entire program dedicated to collaborating with small businesses? A specific inspiration?
Stephen Scott: We’re keen to bring cutting edge innovation into the heart of our business, and it’s the tech sector’s startup scene that’s really at the forefront of this. That’s why we’ve been working with these small businesses over the last five years.
This startup accelerator programme is really about deepening our relationship with these businesses and collaborating with a wider audience of innovators.
BCNewt: Can you give an example of one startup or entrepreneur that had a particularly profound impact for IAG?
SS: We believe that innovation needs to be at the heart of our business. Since 2014 we have been working with a start-up called Sideways 6 which helps us to achieve that. Their collaborative innovation and idea management tool allows us to crowdsource ideas from across our businesses to drive great ideas and accelerated change.
BCNewt: What criteria need to be met for a startup to be accepted into the Hangar 51 program? Are there specific traits you look for more than others?
SS: In terms of eligibility, we’re open to all types of start-up, at any stage of their business. However, the structure of the programme will benefit early stage start-ups most, so we’re particularly keen to hear from these businesses.
Fundamentally, though, it’s all about the idea: if you think it has the potential to improve our business, the air travel industry, airports, the passenger experience, or even loyalty point schemes, we’re open to hearing from you.
BCNewt: For startups, what do you see as the primary benefits for them in entering into this program?
SS: As we’re one of the largest airline groups in the world, Hangar 51 offers startups a unique opportunity work with some of the best experts in our industry. They’ll receive mentorship, support and advice on everything from brand positioning and commercial modelling, through to product scaling and regulatory issues.
We’re also looking to provide investment and trial finalists’ products with our real world customers, should it be appropriate.
Through all of this, Hangar 51 is designed to help startups develop and grow at a faster rate than if they had entered a traditional accelerator or VC.
BCNewt: Have startups ever been wary of entering into a financial agreement with a large corporation early on?
SS: In our experience startups have generally been open and positive when it comes to these sorts of discussions. We work with all finalists upfront to agree a bespoke investment offer before they join the programme – we want them to feel confident we’re being completely upfront and open about any financial arrangements.
IAG’s large investment is one of many instances of big business taking their relationships with startups more seriously. With similar global companies like General Motors are willing to invest $1 billion in a startups, it is clear big business gets that some of the best innovation will come from startups. This is exactly what IAG is doing, and as of now there is no ceiling as to how far they can take Hangar 51.
BCNewt: How do you see the future of corporate-small business relations? Do you think we will see more of corporations catering to the needs of small businesses?
SS: Corporations need new thinking and talent to deliver their goals. Startups need brands and scale to test their products with real customers. We believe, as a result, there will be much more collaboration between corporates and small businesses to meet joint goals.
BCNewt: What motivated you to start searching for new innovators in the coworking industry?
SS: We’re looking for those businesses at the cutting edge of innovation who are, ideally, still at an early stage. The flexibility and modern environment of co-working spaces makes them an attractive home for companies of this description.
BCNewt: Do you plan to continue to use coworking offices as a talent pool for innovators and startups? Please explain why or why not.
SS: If Hangar 51 proves to be successful, we’d like to run it on an annual basis – and we’ll continue looking to coworking offices for the best in new talent!
BCNewt: Do you see IAG expanding its coworking presence? (Sending more of their employees or startups to work in these offices, opening more corporate sponsored coworking spaces?) Why?
SS: Hangar 51 is an internal coworking space within IAG’s head office. Subject to the outcomes of the programme we will explore coworking both internally in our international hubs and externally, where it makes sense for both the start-ups and IAG.
With an internal coworking space IAG is already ahead of many of its corporate competition. Coworking collaboration with startups and entrepreneurs is the new direction of the business world, and the benefits are immense for everyone involved. Other big business should take notice of the research that backs coworking space success, and see that ideas like IAG’s Hangar 51 are the new normal.