Goodyear – a 124-year old company – continues to evolve its business and adapt to the changing expectations of customers in the new mobility space.
Within its lab, Goodyear’s innovators build strategic relationships with startups aimed at creating knowledge and ultimately digitizing the existing assets to develop successful innovations like AndGo. On its side, the CVC arm is committed to investing in promising startups to align incentives with the mother company further. Thanks to these new ventures entities, Goodyear sources deals, invests in visionary technologies, launches its own new ventures, and leads the revolution of the future of mobility.
At our recent Innov8rs Connect on Startup Collaboration & Ecosystem Engagement, Erin Spring, Senior Director, New Ventures at The Goodyear Tire & Rubber Company, spoke with Kevin Ye, Partner at Mach49, to discuss how the company sources deals, collaborates with startups effectively, and launches its own new ventures through its Innovation Labs and the Corporate Venture Capital arm. Here's a summary of what they covered.
Make The Most Of Your Industry's Reflection Points
Founded in 1898, Goodyear Tire and Rubber Company today employs over 70,000 people and is the fourth largest tire manufacturer in the world. Goodyear evolves its business by leveraging new advancements in technology and adapting to its customers' changing behaviors and expectations. Since the beginning, their products have been closely tied to milestones in human history – from the first transport fleets to intelligent tires.
The mobility sector is experiencing many inflection points due to the drastic changes caused by the shift to different transportation systems. These trends are also known as “new mobility” and span from the electrification of vehicles and connectivity to shared models and more autonomous driving.
As an industry-leading company, Goodyear is constantly working to establish new standards for mobility. And to achieve that, the company needs to be aware of what's happening in the market– which startups are disrupting the industry and what the new pain points of consumers are – and invest in new technologies and knowledge accordingly.
Today Goodyear manufactures and produces tires that are delivering a great value proposition. And the company firmly believes tires are going to be used in the future as well – that’s why Goodyear keeps differentiating in that marketplace. Yet the corporation also recognizes that opportunities beyond the core business rise continually. And they want to lead these inflection points.
“After all” – says Erin – “we’ve always been aware of our industry’s inflection points. Goodyears used to make tires and wheels for carriages. In the early 1900s, our leaders at the time recognized a rising industry inflection point – the horseless carriages, i.e., automobiles. And they doubled down and joined the automotive market”.
In order to keep delivering a great value proposition and differentiating in the marketplace in the years to come, Goodyear wants to know what opportunities are beyond the core business. As such, it launched two new venture organizations: on one side, an open innovation platform, called the Goodyear Innovation Lab; on the other, a CVC arm, Goodyear Ventures.
Innovation Lab: Building Strategic Partnerships to Learn
Along with two R&D Centres in Akron and Luxembourg, Goodyear has set up two Innovation Labs, one in San Francisco and one in Shanghai. Within these labs, innovators build to learn and build to earn. They incubate new ventures from scratch next to partnering with startups that may already exist in the ecosystem.
Together with startups, they look at framing up new opportunities to identify the problem to solve for a specific customer segment and understand how to create more value. The startups they work with must be active in the new mobility area and have their priorities aligned with Goodyear's, to be potential partners. Furthermore, their activities must accelerate the strategies Goodyear already has in place. Size and proven ability to scale are not crucial prerequisites for startups to collaborate with Goodyear. The company is willing and able to step in earlier, and operates stage-agnostic.
For the startup, a partnership with a large corporation like Goodyear means much more than capital. Partner startups have the unique opportunity to leverage some crucial corporate’s core assets such as an iconic, well-known brand, potential access to a wide customer base, retail and services footprint supporting autonomous and electric vehicles, and intelligent tires supporting autonomous and electric vehicles.
AndGo by Goodyear: Digitizing the Connection With the Road
One example of how this approach comes to live is AndGo by Goodyear, a predictive vehicle servicing platform that offers full vehicle readiness, keeping your cars safer, serviced, and ready to go wherever they’re needed. AndGo combines predictive software, skilled technicians, and national service hubs. The mission is to be the top choice vehicle services facilitator for leading players in the emerging mobility space.
The AndGo new business was born out of the Goodyear Innovation Lab in Silicon Valley as a response to new mobility trends. After lots of customer research through partnering with several startups already operating within that area, Goodyear’s innovators realized and recognized that there was a big pain point in how those startups were managing their fleets of shared vehicles that Goodyear, thanks to its expertise, could help solve for.
By combining Goodyear’s assets with startups’ capabilities on the digital side, they successfully launched AndGo. Today, backed by more than 120 years of Goodyear experience, AndGo keeps accelerating and creating new standards for mobility.
"AndGo is an example of how Goodyear is very diligently working on digitizing the connection we have with the road, going from a mechanical connection between the rubber and the road to making that connection digital, and giving digital feedback to the end-user and the vehicle itself", says Erin.
CVC: Aligning Incentives for The Longer Term
Launched in 2020 in a significant effort to help the corporate anticipate what's next, Goodyear Ventures is the company’s CVC arm. It’s committed to fueling the future of mobility by partnering and investing in seed-to-growth-stage startups in emerging mobility technology.
While Goodyear was already learning and achieving strategic goals through partnerships and open innovation, business leaders still felt the urge to complement the Innovation Labs' partnering approach with the option to invest, in order to align incentives. Typically, startups are eager initially, but without a long-term perspective and without being able to see the corporation as a partner, they could lose steam and engagement- and a CVC can help address this.
Eventually, establishing Goodyear Ventures has also helped change the corporate mindset. Frequently, when working with a startup, big organizations focus primarily on what they can get from that startup. Instead, thanks to the CVC, the company becomes an investor and strives to help startups succeed – “if we help them succeed, we're going to succeed as well”, notes Erin.
Lessons Learned
From Goodyear's journey so far, we can draw several lessons
How to Avoid Duplication of Innovation Efforts
Within Goodyear are two separate entities committed to pushing the future of mobility. On one side, the Innovation Labs are running and building strategic relationships. On the other side, the CVC focuses on understanding the deal dynamics, doing due diligence during negotiations, and having a broader view of how different areas are developing, and where to invest.
Every Goodyear's deal has to have a strategic angle and make financial sense. Accordingly, Labs and CVC must go hand in hand as much as possible. And this interplay between two different approaches to innovation within the same company can potentially lead to duplication efforts.
In order to avoid wasting time and each other's efforts by, for instance, accidentally having the same conversation with the same startup, business leaders have to foster collaboration between the two groups. At Goodyear, the two entities work with each regularly: for instance, the scouts sit on investment partner meetings every week.
And thanks to the separation of those two teams, even if the CVC might suggest not investing in a startup for some reason, the company can continue the strategic relationship and work with that startup through the Labs.
Creating Connection With the Mothership
At Goodyear, both the Labs and the CVC have the ability and responsibility to understand what is happening externally and potentially integrate it into their solution and business. But these entities are not completely separate from the mother company. There are actually a lot of relationships to manage regularly. As Erin suggests, the support, feedback, and input on strategies from the c-suite are what eventually allow innovators to be game-changers and do many things within the organization.
Over her career in leading both the Labs and the CVC, Erin has also witnessed that understanding and being clear about the overlapping and collaborating points between those entities and the mother company greatly helps to set clear expectations.
Measuring Success: Different Metrics for Different Purposes
“Success might not have the strongest numbers behind it”, says Erin. What actually matters for an innovation lab is “building to learn” and the overall pace of learning. And that includes how often the lab interacts outside the organization’s four walls, the number of startups screened, the number of customer interviews done, the numbers of prototypes built with customers, and the lesson learned from them.
On the other hand, for the CVC it’s important to “earn while building”. Accordingly, the main success metric would be the number of new ventures invested in.
Learning from failure
Over time, Goodyear has built a repository of their failures called “garden". Every once in a while, anyone in the organization can go over there and “water the garden”. And watering the garden means getting lessons out of failures in terms of what were the assumptions that probably killed the innovation idea and then refreshing the knowledge on what has changed.
Often you learn that the reason for failure can be timing. In fact, even though your intuition is true, innovation fails if the market is not ready for it.
Regarding that, Erin brings an example. Circularity and sustainability are a key part of Goodyear's strategy today. Already in 2011, the company was developing a platform opportunity around these topics, which never took off because the economy and the market were not ready for it yet.
When you as a business leader experience a failure because something didn’t work out the way you expected in the exact timeframe you expected, reframe the story internally: as long as the whole company learns something new about the market, that is not a failure. It's just a timing problem that ultimately helps inform your strategy.
