Professional article
From the Innovation Challenge to Venture Clienting. A current practical example from the textile and clothing industry.
Open Innovation, Venture Clienting, Innovation Challenges
In a world with ever more and ever faster technical developments, which result in exponential changes in applications and markets, no company can act on its own and must open up its innovation processes.
Venture clienting - the collaboration between an established company (the “client”) and a start-up (the “venture”) to pilot a new technical solution or application - which is currently much talked about in the context of open innovation, requires careful preparation and systematic implementation.
Careful preparation of venture clienting means carrying out a comprehensive, in-depth needs analysis within the company, where new solutions are sought for internal efficiency and sustainability improvements or for new products and business models.
Systematic implementation of venture clienting means considering the identified solution options as a portfolio and selecting those solutions for pilot projects that promise the greatest return on investment, the lowest risk and the most trustworthy external partner (startup, university spin-off or R&D institute team).
Innovation Challenge: Perfect trial run for venture clienting
And this is precisely where the Innovation Challenge comes into play as a preliminary stage to venture clienting. The Innovation Challenge of one or more companies pursues the same goal as Venture Clienting, but is initially limited in time “to one round”. This means that innovation search fields, specific tasks and desired technical use cases are defined once, suitable solutions from start-ups, university spin-offs of R&D institute teams are searched for once worldwide and it is matched and checked once where cooperation for joint pilot tests should be initiated.
A one-off Innovation Challenge is therefore the perfect trial run for permanent venture clienting and for setting up a dedicated venture client unit as a coordination center within the company.
Excursus: Innovation Challenge or Innovation Hackathon?
A hackathon is an event in which teams work on innovative solutions to specific problems within a relatively short period of time, often 24 to 48 hours. Hackathons are strongly geared towards the rapid development of prototypes and technical solutions, usually with a focus on software or hardware development:
- Limited time: Usually 1-3 days, often non-stop or in intensive blocks.
- Focus on implementation: Teams develop prototypes or functioning MVPs (Minimum Viable Products).
- Technical focus: Many hackathons have a technological focus, e.g. software, hardware, Ni, etc.
- Teams and collaboration: Teams are made up of different disciplines (e.g. developers, designers, business people).
- Competitive nature: There are often prizes for the best solutions.
- Results-oriented: The aim is to present a working solution in a short space of time.
Offers the advantage of quick, creative solutions and an intensive team feeling, but is more suitable for short-term, superficial innovations.
A challenge is a broader form of competition in which participants can work on a solution over a longer period of time. Challenges often have a wider thematic scope and can include social, economic or ecological innovations in addition to technical aspects:
- Longer duration: The time span ranges from a few weeks to several months.
- Broad range of topics: Challenges can go beyond purely technical solutions and also include business models, process innovations or social issues, for example.
- Individual or team work: Participation can take place individually or in teams.
- Phased structure: There are often several phases (brainstorming, concept development, prototyping).
- Evaluation processes: Solutions are evaluated on the basis of specific criteria, and there are often interim evaluations.
- Target group: Challenges often appeal not only to tech talent, but also to industry experts, designers and entrepreneurs.
Enables deeper, sustainable solutions and a broader range of topics, but can be more complex and less dynamic.
Conclusion: Only an Innovation Challenge can be considered as a preliminary stage for venture clienting, as paid pilot tests by companies with start-ups generally require solutions that have already been developed and tested.
Textile and clothing companies in Mönchengladbach have also recognized the opportunities of an Innovation Challenge as the perfect preparation for venture clienting and have joined an Innovation Challenge financed by the city and carried out by 1stMOVER on behalf of the economic development agency, running from December 2024 to April 2025 with a grand challenge finale.
At the finale, not only can the previously identified potential “pairs” of companies and startups discuss the new solutions in 1:1 deep dives and initiate paid pilot projects. All startups, university spin-offs and R&D institute teams can also present their solutions to all companies again, so that further ad-hoc matches and deep dive sessions can be generated on site. The challenge will be rounded off with peer-to-peer sessions for the startups to exchange experiences on the topics of market & product, tech, fund raising and team/recruiting and with VC talks for the startups selected in advance. Finally, there will be the grand finale, where the successful “pairs” of companies and start-ups will present themselves once again and report on their joint plans for pilot projects.
The TexTech Innovation Challenge of the Mönchengladbach-based companies for venture clienting with start-ups has produced more than 20 innovation challenges, from which a great deal can be learned about the current challenges and trends in the textile and clothing industry:
- AI is everywhere:
From purchasing to production and energy management to distribution planning, machine learning, generative AI and agent systems in combination with IOT will be used everywhere in the future for greater efficiency and sustainability. - Sustainability:
Of course, the second, very big topic to finally make the textile and clothing industry more friendly to people, resources and the environment. There are so many promising approaches, now it's time for broad implementation. - Technical textiles:
Germany, including the growing TexTech site in Mönchengladbach, is well on the way to becoming a major textile nation again, with German engineering and technical textiles for a wide range of industries.
All TexTech Innovation Challenges, more information on the challenge format and the opportunity for interested companies, start-ups, university spin-offs and R&D teams to participate until February 28, 2025 can be found here: https://textech-startup-hub.de/
Excursus: Practical experience from the Innovation Challenge
- Medium-sized companies initially reserved to helpless…
- “No time for day-to-day business, we're already innovative enough, what's the point?”
- Help is absolutely essential for the precise formulation of an innovation challenge:
search field > specific task > technical use case
- …but then good at it
- 3-5 very specific, demanding, sometimes very technical challenges per company
- Curious and open to input "what's happening out there”
- Not only start-ups but also university spin-offs, R&D teams and competitors are of interest
- Challenges in startup scouting
- Very few to no directly suitable candidates for special challenges
- Mix of different scouting paths required, with high visualization & qualification effort
- Often requires “thinking outside the box” (e.g. analogy between textile fiber chemistry and hair washing chemistry)
Conclusion: The success of an innovation challenge depends on the many small but crucial details in its implementation, from the start of the individual challenge to the identification of suitable potential external partners for a company.
The TexTech Innovation Challenge in Mönchengladbach is part of a series of other measures and formats aimed at developing the city of Mönchengladbach into an international start-up hub.
If you as a company or as an economic development agency or state ministry of economics are also interested in organizing an Innovation Challenge to drive and grow your company or your economic region, please contact us for a non-binding exchange of experiences.
Are you interested in working with us? Get in contact with us!
