Christian Suttner

Fast 5: How To Leverage The Right Startup Ecosystem

Christian Suttner, co-founder and managing partner of Starburst, explains how the aviation industry’s appetite for finding and benefiting from startups is accelerating greatly.

Since Starbust started in 2012 in Paris, how has the aviation industry changed in its approach to startups and finding new technologies?

The key change was that many players who previously did not engage started to become active, and those already active intensified their efforts. As a consequence, the number of success stories has grown, with many examples of corporations creating substantial value through their engagement with startups.

Do you see the pace of change speeding up?

The engagement of aviation businesses with startups has significantly accelerated. Everybody is trying to figure out how to best leverage the startup ecosystem, with huge differences in terms of money they put behind it and the seriousness of attempting to integrate startups in some way into the internal business. Those two are not always in sync, and frequently the startup activities still run more or less separately from the business. When that happens, the innovation marketing impact is there but limited business value is created. And it is no surprise that corporates struggle with this: setting up an effective framework for engaging with and benefiting from startups is not a simple task. It needs a company-specific approach that matches the culture, organizational structure, processes, as well as incentive system and power play within a corporation. Numerous hurdles exist: the classical not-invented-here syndrome, the different expectations in terms of speed and flexibility between corporates and startups, the avoidance of risk at corporates versus the need to take risk at startups, etc. Balancing these to come up with a suitable engagement model takes a lot of experience on both sides, and this is where we try to help our corporate clients succeed.

On its website, Starbust Ventures’ states “the next billion-dollar startup will be in aerospace.” What’s the insight behind that?

To create a billion-dollar startup first requires the promise of a fast growing, multi-billion-dollar market. In the aerospace industry, several such markets exist or are at the verge to come into existence. The most fascinating one is certainly urban air mobility (UAM), with the potential to change our intra-city and short range inter-city air traffic in a profound way. The long-term success of urban air mobility depends on three core technologies: VTOL (vertical take-off and landing), electric flight and autonomous flight. More than 100 players are trying to bring it all together (most of them focusing on eVTOL as a first step). And beyond UAM, electric flight may change air travel dramatically by connecting numerous small airports with small electric passenger planes to other small airports or larger hubs—multiplying the number of destinations that can be reached with planes and substantially shortening end-to-end travel times.

As another example, the space industry sees unprecedented disruption. For decades, launchers were in the hands of nations and satellites exclusively built by large corporations (typically backed by nations as well). Now there are startups everywhere across the value chain, from new launcher concepts to small and cheap satellites with short lifespans as opposed to the traditional large, long lifetime satellites—and of course all the services associated with using satellite capabilities: earth observation, communication, etc. Winners in fast growing and potentially very large markets become unicorns, and thus we should expect a few of them in aerospace.

How does the Accelerator work?

Our program focuses on accelerating the revenue growth of our startups by connecting them to the right people at prospective aerospace customers. To do this successfully, two ingredients are necessary: first, you need to operate globally. It's a global industry and sometimes there only may be a few target customers for a startup in any given country. Second, you need to have a great network that startups can tap into (and which we use to provide the best mentors to our startups). By helping startups find the right people to talk with, we also help corporates find the right startups that can create value for them. To do this matchmaking right, we have to know our corporate clients’ businesses and their challenges very well, which only works when you are really focused on a single industry, as we are.

I'd like to add that we do not stop with matchmaking in our innovation support for corporations. We have built a management consulting arm that focuses on creating value from innovation: from evaluating and entering new markets, optimizing product-market fit, innovation strategy and innovation performance assessment, to analyzing and redesigning manufacturing processes for implementing innovative solutions to boost productivity and reduce cost. This includes new ways of working, such as agile collaboration.

What enabling technologies are aviation companies most seeking today?

Industry 4.0, Internet of Things, artificial intelligence, robotics and cybersecurity have the highest demand. Within Industry 4.0, the lead is taken by additive manufacturing, followed by augmented reality/virtual reality and digital factory topics. And generally, data analytics is very important: the aviation industry is producing a wealth of information every day, and only a fraction is really leveraged. We segment the technologies relevant to aerospace into 18 verticals, some of which have multiple sub-segments. There really is a breadth of solutions available—we have identified and analyzed more than 4.000 relevant startups by now.

Christian Suttner is speaking at MRO Europe on "Leveraging The Startup Ecosystem" on Oct. 16.

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