“The most personal is the most creative,” said the director Martin Scorsese said in the past. He left a big footprint in the history of world cinema. His words were quoted recently by director Bong Joon-ho, who swept four categories at the world-acclaimed Academy Awards in 2020.
This saying can be applied to the startup industry as well. Many startup founders started their businesses by finding items from their personal experiences. Discomforts and skepticism from personal experiences in daily life and great ideas that popped up soon became creative business items.
However, not all of these personal and creative items are successful. People fail to commercialize them because some do not have funds to start businesses, and some cannot find suitable manpower and partners. So, in line with this, Corporate Venturing (CV) has emerged. It is an alliance between large companies and startups.
Of course, CVs don’t always perform well. Some startups lose innovation spirits and become regular companies after receiving investments from large companies. There are also cases where large companies steal the technology or manpower from startups, and even demand too many stakes, taking away the growth potential of startups.
Large companies help startups with strong infrastructure, abundant funds, and vast networks. Instead of large companies that are too big to respond quickly to market trends, startups try various innovations and share the results with them. The startups sail smoothly with the sail and wind prepared by large companies. Together, they explore the unknown.
The collaboration between Mercedes-Benz Korea, an automobile company that dominates the world, and Coconut Silo, a mobility startup, is clearly an exemplary CV example. Mercedes-Benz Korea has gained young blood to try new ideas and innovations. Coconut Silo has met with a strong partner, recognition, and broad business areas. The Seoul Startup Hub (SBA), which connected them, created another successful CV case.
One day in August when the heat was at its peak, we met Lee Seung-ryong, Manager of Mercedes-Benz Korea, Kim Seung-yong, CEO of Coconut Silo, and Choi Su-jin, SBA Part Head at Mapo SBA in Seoul.
Mercedes-Benz Korea holds hand with SBA to infuse startup Autobahn in Korea
First, Manager Lee Seung-ryong introduced Mercedes-Benz’s startup support and fostering program Startup Autobahn. This program, first devised by the Daimler Group in 2016, is an event that invites promising startups from around the world to Germany for open innovation, which seeks innovation with an external company of a large company or startup.
To the Daimler Group’s plan, Regierungsbezirk Stuttgart in Germany has announced its intention to participate. Stuttgart is an industrial city, and it has the funds, space, and infrastructure to foster businesses, but it has no chance to make open innovation for startups. Daimler Group and Regierungsbezirk Stuttgart established a joint venture and created an ecosystem to run the startup Autobahn.
Attracted to this joint venture, other German conglomerates like freight forwarding company DHL, automobile maker Porsche, and mobile operator T-Mobile also joined. Naturally, the mobility ecosystem, which is their common denominator, has strengthened, and more startups that want to participate joined. As a result, Startup Autobahn has established itself as the largest startup incubation project in Europe.
Startup Autobahn was held in Korea for the seventh time in the world in 2020 after having the event held in the United States, China, and India. In Korea, Mercedes-Benz Korea will be in charge of this project.
Manager Lee Seung-ryong is the person in charge of Startup Autobahn. He persuaded the company, thinking that it was a good idea and an essential business in Korea after seeing the examples of overseas Startup Autobahns in 2017. At the same time, Mercedes-Benz Korea was looking for a way to strengthen the promotional marketing of its electric vehicle EQ series in Korea. He thought that an event that selects and fosters electric vehicle startups is suitable for publicity and marketing.
The point of contact between electric vehicles and startups that Mercedes-Benz Korea thought was a “connected car (a vehicle that provides various functions by connecting to the Internet).” The company decided to hold the event called Startup Hackathon (combination of hacking and marathon which planners, developers, and designers come up with ideas and produce results within a limited time). However, there was not too much time for planning and execution. The company had never run an event in the past either. That’s when SBA reached out.
Mercedes-Benz Korea was attracted by SBA’s rich startup infrastructure and event management experience. Immediately after signing an MOU with support for startups, the first event, “Connected Car Startup Hackathon,” was held in December 2019. The event ended successfully.
Thanks to fastening the first button well, the next button was much easier to fasten. Excited about the success of the connected car startup hackathon, the two companies decided to hold a startup Autobahn in Korea in 2020. Several innovative startups including Coconut Silo participated in this event. Even in 2021, startup Autobahn will open. In this year’s competition, big companies like SK Telecom and LG Electronics will also join.
The goal of Mercedes-Benz Korea is to lead Korean startups with skills to the global startup Autobahn, and to collaborate with startups with the same values and goals.
Coconut Silo and Startup Autobahn meet in Vietnam, where Coconut Silo had started the future of mobility
CEO Kim Seung-yong was inspired in Vietnam, which was his first overseas travel destination. Logistics and transportation account for 25% of Vietnam’s GDP, which is particularly high compared to other countries. Although the volume of freight continued to increase and the margins were high, it was being operated very inefficiently. People received orders only by e-mails or phone calls, and the actual order was placed only after completing the paperwork. In the meantime, the drivers of the trucks in charge of transport had to wait.
Kim, who had worked in the product planning department for Hyundai Motor’s freight car, devised a logistics business to expand in Vietnam. After outlining the business, he applied to Hyundai Motor Company’s in-house venture program, founded Coconut Silo in March 2020, and his company was spun off in June of the same year.
Coconut Silo introduced “Coco Truck,” a hailing service for trucks in Vietnam. Compared to other regular car-sharing services, it handles trucks, and both the trucks and drivers can be booked. By utilizing the big data analysis, real-time truck location technology has been added.
Grand Prize in Jeju Island Public Data Utilization Startup Competition, Grand Prize in the Ministry of SMEs and Startups Youth Youth Contest, 2020 Mobile Technology Award, Award from the Minister of Science and ICT, and being selected in the Ministry of Small and Medium Venture Business KSC New Delhi Startup Support Project and the project to receive support from Korea Institute of Startups & Entrepreneurship Global Pitching Competition. These are the achievements of Coconut Silo in just one year and five months after its founding.
With success in Vietnam, CEO Kim directed his attention to the mobility industry in Korea. Although the Korean mobility market was close to being full, there was a niche in the service for trucks. Internet connection and automation technology were being applied in trucks, but there was almost no innovation. It was the moment when he saw the opportunity called truck mobility.
CEO Kim Seung-yong inspecting the worksite in Vietnam / Courtesy of = Coconut SiloCEO Kim was on his way to implement truck mobility in the Korean market. And, that’s when he heard about Startup Autobahn hosted by Mercedes-Benz Korea and SBA. He was planning to apply for Startup Autobahn in Germany, but changed his plan and applied for the event in Korea.
When he saw that the competition ratio of Mercedes-Benz Korea’s Startup Autobahn was 20 to 1, he first thought that he could only get help for viral marketing or releasing press releases. However, when he witnessed that Daimler Group is actively promoting the Startup Autobahn and promised great support to the participating startups, he thought he should also join as the mobility partner.
Building a mobility platform for truck drivers
Coconut Silo and Daimler, a truck manufacturer under Mercedes-Benz Korea, jointly created a mobility platform for trucks. Unlike passenger cars, the maintenance infrastructure for trucks and other trucks is still poor. Daimler was looking for a consumer-oriented platform that would smoothly provide warranty services such as maintenance and repair of trucks. Coconut Silo was the perfect candidate for the job and was selected as a partner right away.
Manager Lee Seung-ryong also said, “Several commercial vehicle startups participated in the startup Autobahn at the time. We discussed ways to provide truck drivers with the same level of convenience as car drivers, and we thought that the direction of Coconut Silo was the best in terms of not only seeing the market but also the ability to create a business model,” complimenting CEO Kim.
CEO Kim said, “Most truck drivers buy vehicles to make a living. Therefore, they have to be more thorough in the maintenance of their vehicles. Driving conditions are harsh, and in the event of an accident, it is immediately life-threatening. However, the truck maintenance platform was really poor. It doesn’t pertain to only Korea. It is universal
That’s why we created Truck Doctor, a maintenance service among the truck mobility platforms. It is a business that provides convenient and faithful maintenance solutions to truck drivers. Truck Doctor makes scheduling and managing truck maintenance easier. It also includes a function that notifies users of weather information necessary for driving and the nearest repair shop. It is very convenient to use. Users can take pictures of the damaged part of the truck and send it or request the repair by voice.
Furthermore, we want to create solutions for truck drivers. Truck drivers who drive alone at night or early in the morning are bored. That’s why we’re developing technologies that can provide companionship to the drivers and a call center that will provide welfare. We are also considering developing an online meeting space for truck drivers, such as the clubhouse, a voice social media, and a truck simulation training program similar to the game Euro Truck Simulator.
Coconut Silo wanted to go out into the world and meet other business partners by participating in Startup Autobahn. Now that we have met a good partner Daimler, we can focus on expanding the service.”
Manager Lee Seung-ryong said, “For 2021 Startup Autobahn, we are going to gather twice as many startups as the 2020 event. We are going to invite institutions and corporate partners. Going one step further with funding and proof of concept (POC), we are considering ways to support startups in full-fledged growth. Startups that are not affiliated with Mercedes-Benz are also welcome,” as he strongly encouraged companies to join Startup Autobahn.
SBA wishes more companies to participate in the CV program that fascinated Mercedes-Benz
The Mercedes-Benz headquarters in Germany is evaluating the result of cooperation with Coconut Silo and SBA positively. Furthermore, manager Lee Seung-ryong added that he is hoping for more alliances with Korean startups and companies.
SBA Part Head Choi Su-jin said she owes all of the success to Mercedes-Benz. She said that when SBA was looking for a good CV case, Mercedes-Benz proposed collaboration right on time. As the schedule for Hackathon was tight, SBA focused on promoting the event and recommending participating startups. This was how the three final teams were decided, and surprisingly, all of them were startups that were in SBA.
This situation looked like a good CV example. Mercedes-Benz showed enthusiasm to invite startups participating in Hackathon to the Daimler headquarters in Germany. So, Choi was convinced that opening Startup Autobahn in Korea would yield greater results. Although there were trials and errors, Startup Autobahn went on, and now became a popular program.
Choi said, “SBA works with various partners such as the Seoul Startup Network and VCs (investment companies). It acts as a hub that connects networks. So, the more the partners such as large companies and startups, the better.
When creating a successful CV model, the important thing is that large companies take good care of startups and respect them. It was good to cooperate because it was Mercedes-Benz, which has created such a culture in Startup Autobahn.
Following OB Beer-RE:Harvest, S-Oil- Glory & Tech, it is surely exciting to make a CV success case with Mercedes-Benz Korea and Coconut Silo. I want to create more cases where large companies invest in startups that can bring open innovation and grow together.”
