Business / Technology

Startup energy brings Disney's BB-8 droid toy to life

(Agencies) Updated: 2015-08-14 13:06

If it weren't for someone willing to entertain a new idea, the new Star Wars droid, BB-8, wouldn't be rolling into living rooms this holiday season.

The robot - which looks like a mechanical head on a spinning ball - was the brainchild of filmmakers behind Star Wars: Episode VII - The Force Awakens, who were unaware their puppetry-animated character could function in real life.

But in July 2014, the CEO of Lucasfilm-parent Disney, Bob Iger, showed secret images of BB-8 to a startup company called Sphero. It was one of the inaugural class of companies Disney brought into a three-month program meant to nurture their entrepreneurial spirit and maybe generate a money-making product.

It was like Force lightning hitting pay dirt.

Sphero's founders dummied up a functioning prototype that very night, an innovation that now sits in a special locked room in its headquarters in Boulder, Colorado.

"Imagine sitting down with Bob Iger and him pointing to something the whole world wants to know about," said Sphero CEO Paul Berberian. "And you get to see something that you've been working on. What a magical stroke of luck."

Disney's "accelerator" is the kind of program being adopted by big companies like Microsoft, Barclays, Nike and Volkswagen. The idea is to invest a small amount in a handful of startups, set them up in cheap office space, mentor them, and launch them on a trajectory for more funding, product development, and possibly business deals.

Disney now plans to give the BB-8 toy made by Sphero a big push in September online and in Disney Stores before the movie opens in December. It also took a minority stake in Sphero, which has raised $81 million so far.

Kevin Mayer, Disney's chief strategy officer, says the accelerator program is less about earning a quick profit and more about dreaming up innovative products and injecting Disney's upper management with energy and ideas.

"There's a different form of excitement that you get when you have new people whose company is on the line and it's a make-or-break moment for them," Mayer said. "All the executives who came in and mentored - to a person - enjoyed it tremendously and came out feeling more energized than they went in."

The secret to success? Corporations must "give first" - in other words, be free with their time, advice and contacts without an expected return, says David Cohen, the CEO of TechStars, which administers 18 different accelerators, half of which are linked to major corporations.

Seeking an immediate benefit through an exclusive distributor relationship or a guarantee of a future equity stake at a predetermined price can limit good ideas and turn away potential applicants on the cusp of trying to broaden their market reach.

"That's what corporate America is still learning," Cohen said. "Once (corporations) are helpful, in turn, (the startups) are probably happy to have them invest more or buy the company."

Already funded with roughly $30 million before joining Disney's accelerator, Sphero didn't need the $120,000 investment that all participants are awarded. Instead, it was looking to tap into Disney's storytelling expertise to humanize its toy and gain access to Disney's senior management team.

The relationship helped open the door to Sphero becoming the licensed maker of the BB-8 toy, get distribution agreements with major retailers and polish its in-store presence. "I can't express how much they've essentially backed up the truck to help us," Berberian said. "It's humbling." Accelerators are becoming an increasing source of innovation for major companies. Accelerator operators like TechStars and Plug and Play Tech Center pair large companies like Home Depot, Johnson and Johnson, Citibank and Coca-Cola with startups that could benefit from their connections and experience.

Meanwhile, large companies are scouring the landscape for ideas that can help them stay ahead.

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