Behind-the-scenes at Adidas’ startup accelerator
To celebrate the Digital Transformation Festival, The Drum is revisiting some of the best writing we’ve published on marketing innovation. Here, we drop in on Platform A, the newly launched accelerator from Adidas at Station F in Paris's 13th arrondissement, to glean insight into how the sports brand is working with startups to better drive its global growth.
A year on from its launch, Adidas opened the doors to its Paris startup accelerator for the day to showcase the work it has packed into one turn around the sun. Still a work in progress, Platform A is an ideas generator that would enable it to unlock capabilities to fulfill customers' needs while creating better brand desirability.
"We know we don't have all the answers," says Emilie Petit, director of Platform A, of Adidas's decision to invest €1m into the incubator. "We know we needed to partner with the best talents to develop technology that can be plugged into the Adidas ecosystem. Focusing on women empowerment, digital ecommerce and sustainability, we want to transform our company digitally and to accelerate."
With accelerating growth as its main objective, the incubator was engaged to facilitate Adidas’s five-year strategic business plan to implement a growth strategy with a clear focus on cities, open source and speed.
Over in the 13th arrondissement of Paris, the former rail freight depot known as la Halle Freyssinet has been transformed into Station F – the world’s largest startup facility.
A concrete cathedral to the god of entrepreneurs, the open space is jutted by cargo containers that are layered in bright bean bags. The only fossil of its former life are two old trains, succumbed to overgrown plants, that stand over Persian rugs in the quirky La Felicità restaurant.
Covering 51,000 sq meters, it functions just like a university campus; only it is scattered with works by Ai Wei Wei and Jeff Koons, and houses tech royalty Facebook, Microsoft and Ubisoft as well as beauty giant L’Oreal.
And, as of January last year, it is home to Adidas's Platform A, which sits on the sideline of the epic hall.
Given brands have been running accelerator programmes for years, Adidas’s Platform A was rather late to the startup party.
“When Station F opened in 2017, we thought a lot about joining it as we’d seen a lot of brands doing things in incubators,” explains Brice Lefevre, general manager at Adidas France. "We noticed that while Station F had everything from social media to artificial intelligence, it didn’t have an incubator specifically focused on sports."
What drew Adidas in the end was the resources a concentrated area of major brands can provide. “You have every corporation that you’re looking for. When we have a question on artificial intelligence, we can just tap on the door of Microsoft, or if we’ve got a question on esport we can just go to Ubisoft,” Lefevre says. “It’s so easy. We’re a family of people who are close to each other and support each other, as we face the same challenges.”
In December 2018, 28 startups pitched for entry into the program at the headquarters in Herzogenaurach in Germany, and 13 startups were chosen on the strategic direction of the company to have innovation potential and promise a high return on investment.
"We'd been focusing on three main things as part of our five-year brand strategy," explains Petit. "Key cities, open source and speed."
Given 80% of global GDP generated in cities and global trends being increasingly shaped in metropolitan areas, Paris is one of its six global key cities Adidas intends to focus on, alongside LA, New York, London, Shanghai and Tokyo.
“Business opportunities in megacities are the highest; its where we can grow our brand desire, and ultimately our top line,” Lefevre says on opening in Paris. “If we’re winning in cities like Paris, it will be easier for us to win in France and to influence on other cities in Europe. Cities house a rich concentration of creation, diversity and way of thinking, so being really avant-garde is so important.”
“Open source is a mindset, its a way of seeing things,” explains Lefevre on Adidas’s commitment to strengthen its ties with customers by increasing desire in how the group creates, designs and presents products. “It’s a way to admit we don’t have all the answer, but startups are there to find a solution to our problems and help us look at the world a different way.”
Speed is how we can accelerate and be faster in everything we do, from production to our go-to-market strategy," says Lefevre of the role of the incubator in helping Adidas be more efficient.
The way it works is Adidas hosts the startups in Platform A, and commits to developing a pilot in six or nine months with them, depending on the project. The companies sit among each other, hot desking throughout the year.
The program spotlights innovation based on women empowerment, sustainability alongside retail and ecommerce opportunities.
All pilots are managed by the global Adidas group team to ensure they are not isolated in the French market, but globally relevant. "We didn't want to keep it small and basic, we want to make sure there is an opportunity to get to the next level" says Lefevre.
Based on the success of the pilot, Adidas decides whether to continue the support or to pull the plug. Against the thought that 90% of startups are doomed to fail, Lefevre says that so far the scheme has had a 90% success rate.
"If we're happy, we'll move ahead, and whenever possible, we will integrate them," Lefevre confirms. One example is Running Care, a health app dedicated to runners that still has desk space at Platform A. The startup has now been embedded on Adidas's app, which Lefevre offers as an example of a perfect fit. "It was a pilot that was tested in France, then went out to other countries in the world."
After the first wave of pilots, there are now 10 startups currently working at Platform A. Platform A is also the headquarters of Global Sports Week Paris, an annual gathering of the global sports economy that takes place in Paris next month.
As the incubator reaches its first birthday, it's certainly still a work in progress. Historically, the biggest issue facing startups accelerators have been scaling quickly. Platform A is no different.
"The reason we brought in the second generation after six months was from learnings we had from generation one," says Lefevre about the issues of providing an all-encompassing programme, irrelevant of the level of maturity the startup begins with.
Learning from its mistakes, Adidas has now introduced two track system to its programme; the 'campus' track for businesses that need to be incubated, and the 'focus' track for those that need to be accelerated, which it will help scale their solution.
An example of focus track startup is Stuffstr, a company hailing all the way from Seattle that makes it more convenient and attractive for people to re-circulate their garments. The app allows people to sell back their apparel and receive e-vouchers in return, and is an attempt from Adidas to do something about the $400bn worth of perfectly useful stuff that ends up in landfill every year.
When the app arrived at Platform A, it had already been picked up by John Lewis and featured in Fashion for Good in Amsterdam – where the Adidas team first came across it.
Arriving at an advanced level, it was ready to test upon arrival, with no need to be incubated. It now sits on Adidas's Creator Club app for fans to resell their old Adidas goods.
The campus track startups are those with great, disruptive ideas that are in their early stages. The team decided this early track should focus specifically in Paris.
One example is Yoyo, a company that wants to tackle France's recycling issue. On average, only 20% of plastic products are recycled in France each year. By 2025, by incentivizing plastic recycling, Yoyo hopes to increase that percentage to 100%.
The way it works is Yoyo provides orange bags to those who want to collect waste. Working on a point system, each bag of plastic collected gains 25 points, with the sorter getting 125 points. Those participating can then use the points to buy rewards on Yoyo's platform, where they can get tickets to the cinema, concert tickets, museum admissions, among other fun activities.
The Fabricant is another campus track taking up desk space in Platform A. It is the first sustainable fashion house that wastes nothing but data, as the clothes it sells are always digital - never physical. Why? The boom in Instagram personas means the way people present themselves online, matters more to them to how they perceived in the flesh, and people will spend money on superimposing fashion on photos of themselves.
Lefevre sees a KPI for success is the amount of pilot they can test, which he said isn't as easy as it sounds due to the complexity of the projects. Going from there, another KPI is how they can scale it to other cities.
He admits that challenges are always existing, and there is a struggle sometimes to connect Adidas to the startups. "We're a €22bn company. We're far more complex that startups in that we make longer decisions," he says of the struggle to align with each other. "We're not all located in Paris, so we need to speak with people in Amsterdam and Germany too."
"This programme helps to simplify and to streamline the relationship between the startups with the rest of the Adidas organisation, so we guide them and facilitate the information flowing system, but it isn't always easy," he says.
And looking forward, Petit says that their bigger vision is to "ultimately transform Adidas by building on its digital and innovation culture."
"We want to increase the rate of our innovation. We want to push as far as we can on what a corporation like Adidas can benefit from Platform A's entrepreneurs," she concludes.