The Founders portfolio for startups was created in 2012 so that Coca Cola Company can develop a “repeatable and scalable model for disruptive innovation.” The Founders portfolio was able to generate more than three times returns on investment for the giant drinks company for the past two and a half years.
Coca Cola is now dissolving the unit that has resulted into the successful creation of startup Wonolo, an on-demand staffing platform and Weex, a mobile network designed for millennials. Coca Cola will merge the companies that were funded through the Founder’s portfolio into other areas of the business and it will maintain relationships with the startups through its Venturing and Emerging Brands (VEB) units.
According to a spokesman from Coca Cola, the company is focused on marketing innovation resources particularly around the core innovation projects within the beverage portfolio. Relationships with startups have been funded through the Founder’s portfolio that will transition to be managed by corporate mergers and acquisition teams. Coca Cola knows that the startups continue to generate certain benefits for the company; however, Founder will no longer fund new startups or provide additional funding.
The decision of Coca Cola does not in any way change its holistic approach to innovation. In fact, the company will imbed innovations across its functions and global business units. Coca Cola hopes to continue working with entrepreneurial startups through Bridge program and the current investments through VEB.
In recent years, many brands and agencies like Unilever, Pernod Richard and John Lewis have realized the importance of startups which led them to create their own incubators. Coca Cola is not the first brand that has stopped funding for startups because in August last year, Ogilvy Group UK turned its back on Ogilvy Labs when the company voted to leave Europe.
Making the decision to outsource marketing innovation for your company can be an important one because you have to hire someone outside the company to do the job. However, innovations are difficult to undertake without the proper experience. Marketing is not as simple as sending out a few advertisements; it requires managing the marketing campaigns in different markets to reach the target audience.