Coca-Cola has been around for 130 years. Coca-Cola has a market cap of $US179 billion. Coca-Cola has 129,000 employees. And Coca-Cola is very, very good at what it does.
But making the soda is only part of the story. Getting the fizzy stuff into stores and restaurants all over the globe requires a massive supply chain of shipment, bottling, stocking, and staffing — not to mention sales and marketing.
Each of those are giant, sometimes independent, businesses related to the Coca-Cola empire.
And at a time when little startups are disrupting big businesses left and right, Coke knows that it cannot afford to ignore technology, says Coca-Cola VP of Innovation and Entrepreneurship David Butler.
Enter the Coca Cola Founders “platform,” the soda giant’s startup accelerator program, where startup founders are given seed funding, matched with the resources they need to solve Coke’s “billion-dollar challenges,” and hopefully grow into self-sustaining businesses of their own. And no, they don’t all have to be in the soda business.
Right now, there are 11 startups in the program, half of whom are looking to raise venture capital rounds (of those 11 startups, only two currently have female founders).
Coca-Cola Founders is actually the third version of a corporate initiative to come up with new ways of doing business. The first initiative failed because it was just a bunch of executives and managers in a boardroom, trying to come up with innovative startup ideas, Butler says.
“The room was filled with managers, not explorers,” he says.
The second version brought entrepreneurs on board as internal employees, tasked with solving hard problems. But without equity in their own startups a motivating factor (the startups were part of Coca — Cola), the founders just weren’t hungry enough, and results were mixed, Butler says.
And so, late last year, Coca-Cola Founders was formed in its current incarnation. The internal startups, like Wonolo, were spun off into their own independent companies, with Coke keeping a share.
Butler insists on calling the current iteration of Coca-Cola Founders a “platform,” not an “accelerator.” Similar to traditional startup accelerators such as Y Combinators and 500 Startups, Coca-Cola Founders offers funding and a network of fellow founders.
But unlike traditional accelerators, Coca-Cola is in it for the long haul, Butler says. There’s no limit on how many startups can enroll, or how long they get to stay in the program, or how much money they could theoretically receive, so long as the founders keep plugging away at these big platforms.
In fact, it’s called the “Founders Program” because Coke is looking more for proven entrepreneurs (the program currently includes one Y Combinator alum, Butler says) than for slick pitch decks or catchy names. The rest comes in time.
Coca-Cola generally takes a 20% equity stake in the startups. And given that these startups are selected because their big ideas could help Coke’s business, entering the program effectively means potentially landing a first big customer.
Take, for example, Winnin, a Brazil-based, Coke-backed video app that lets users “battle” videos against each other, voting on which one is better.
No marketing person at Coca-Cola headquarters would ever have thought of this, and even if it did, making it a Coke product would have ensured that people were turned off. But now, Coke has a stake in an autonomous app that’s helping it reach a crucial younger demographic.
“We need teen engagement in our brands or we’re done,” Butler says.
When Winnin recently wanted to get a celebrity involved in making and voting on videos, Butler’s team delivered a heavyweight: pop singer Taylor Swift, who’s currently a celebrity spokesperson for Diet Coke in North America. Corporate synergy in action.
On a less glamorous side of the business, Coke-based startup Wonolo has helped address the problem of stores running out of its soda.
By riding with Coke delivery trucks, going out with maintenance repairmen, and visiting with Coke-partnered hotels and restaurants, Wonolo discovered that stores often still have Coke in stock but lack humans to physically move the product.
Wonolo now focuses on providing on-demand temporary workers for business. It was designed to solve a Coke problem, but it can be used by anybody.
“We wouldn’t have gone down this route” if not for Coke, says Wonolo co-founder AJ Brustein says.
In the end, by connecting founders to capital and resources, there could be a few more unicorn startups in the world, or so Coca-Cola hopes.