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Welcome to the incubator, where Jaguar Land Rover hatches tech startups

Everyone knows the tech startup story – someone slaving away in a dead-end job gets a great idea and makes the big leap to form their own company. Then, after a lot of hard work and a few lucky breaks, the company takes off and makes everyone rich. But how many startup companies really work out that way?

Matt Jones is in the business of providing lucky breaks. As Head of Future Infotainment for Jaguar Land Rover, Jones spends his time looking for the next generation of technologies that he can use to keep Jag and Rover ahead of the competition.

Enter The Incubator

Jaguar Land Rover combined the idea that underlying technology should be as unremarkable and reliable as an electrical outlet with the desire to get new tech into their cars as quickly as possible. That combination led the company to develop an unusual concept – a technology startup incubator.

Startup-space-2

“We started talking to startups and asking about the roadblocks preventing them from doing more things faster,” Jones recalls. “Some of it was that they couldn’t find accommodation where they could put six people and get a six to twelve month lease, but we have that space. Then if you think about what startups need on a day-to-day basis, sometimes they need a graphics guy and sometimes they need a C++ coding guy and sometimes they need a Javascript guy. At Jaguar Land Rover with a team of 80 developers, we’ve already got that guy.”

To help give the next generation of startups a boost, Jaguar Land Rover agreed to create a shared space where small startups can locate for a period of six months to focus exclusively on their work, and the company also invests in each of the startups to help them financially.

“We started talking to startups and asking about the roadblocks preventing them from doing more things faster.”

“They’re focusing on their products, which is what I want. Now the quality of prototypes is so much higher. We believe that in the 6 months they’re with us, a team will accomplish at least 18 months of product development. That’s time to market,” Jones says.

Each startup selected for the incubator receives a cash investment and a fully furnished space to work, including telephones, network access, and meeting space, all in a modern building located in the heart of Portland, Oregon’s famously chic Pearl District. The working space is adjacent to Jaguar Land Rover’s Technology R&D Center. They also receive access to Jaguar Land Rover’s team of engineers in Portland, and to the larger community of engineers, marketers, and other professionals within the company. The value of the incubator package is about $250,000.

Reinventing the Wheel

“About September of 2012, I was seeing about one to two demos a week from different startups,” Jones says. “If I liked their product, I asked them how long they had been working and how many engineers they had. They’d typically say they had six people working for a year, but it would turn out that they’d only been working on the customer-facing part for a month or so. They were spending several man-years building out a software platform that we didn’t care about!”

Matt jones

Jaguar Land Rover is a player in the GENIVI Alliance – an industry consortium dedicated to standardizing the underlying technology that goes into automobiles. GENIVI manages the systems that just need to work, so the automakers can concentrate on the important features that you see and touch.

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“As an example, no one in this day and age is going to buy a vehicle infotainment system without Bluetooth telephone support,” Jones explains. “There were about ten to twenty different proprietary Bluetooth stacks. From a customer perspective, you shouldn’t even need to know what a Bluetooth stack is; it should just work. It’s not going to give any company a competitive advantage.”

What’s the Catch?

If there’s a hook lurking under that appetizing bait of investment and support, it’s well hidden.

“I must admit, hopefully a lot of what those companies develop in the incubator will get into Jaguar Land Rover products,” Jones says. “That’s up to us, and we need to be fast to market, not because of the startup but because of our customers’ expectations.”

Each startup selected receives a cash investment and furnished space to work, including telephones, network access, and meeting space

Yet the deal for startups selected for the incubator is not an exclusive lock to provide products only for Jaguar Land Rover.

“Some of the time we say that we really like your concept and we’d like to work with you to get it to market first,” Jones says. “They commit and we commit to certain milestones, but if they choose to work with someone else that’s OK. Ultimately, our success criterion is a healthy startup that can form an active part of a healthy ecosystem.”

Yet in the business world, nothing comes for free. Part of the deal is that Jaguar Land Rover gets an equity stake in companies that take advantage of the incubator.

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“We take an equity stake of 5% to 15% in each company we incubate,” Jones says. “From a JLR standpoint it actually helps create a lasting relationship. Once they’ve left, we still use and leverage our abilities to help them. By having a small equity position, it helps us do that.”

How Do You Get Into This?

If you’re already thinking of applying, that part is easy. Jones will announce the first three startups to enter the incubator at the Consumer Telematics Show on January 5. The startups will have moved into the facility by January 1, but another cohort of three startups will begin work at the incubator on April 1, then again in July, October, and so on. Jaguar Land Rover has committed to putting 12 startups through the incubator each year for at least 10 years.

“The first thing to do is go to jlrtechincubator.com,” Jones says. “There’s an ‘Apply’ button and it takes about 15 minutes to complete the application and upload a video. Every startup worth its salt has a video. They’ll fill in some boxes about how big they are, where are they based, can they commit to spending time in Oregon, all of these different criteria. They press Submit and it goes into our hopper.”

One side benefit is that this is all hosted on a site called F6S – First Success – and once someone has filled out the form for Jaguar Land Rover, they can go through and apply for other incubator and angel investment programs.

“We reach out to all applicants and thank them for their application,” Jones insists. “We read through them all and rank their technology on a number of different factors related to our future product. We then start talking to the top-ranked companies and we bring in outside experts to evaluate them. Then we start interviewing by Skype and we do our due diligence. That whole process can take up to 12 weeks.”

Startups applying now can expect to receive a decision within a few months, and there is no limit on how many times a given startup may apply.

“There are e-mail addresses and phone numbers on the application site. We have an open door policy and we’re collaborative,” Jones says. “We’re already working with companies for future classes – applications never close!”

If you have a startup – or just an idea for a startup – this could be your lucky break.