Wal-Mart Stores continues to test innovation anywhere it can. On Monday (Oct. 10) the world’s largest retailer will begin in its Bentonville office a new incubator for six interns with entrepreneurial ideas.
It’s a venture with Grit Studio, the incubator and startup effort spearheaded by former Wal-Mart executive Rick Webb. He told Talk Business & Politics the Walton Family Foundation is providing Grit Studio some funding in part for research he’s doing on the entrepreneurial landscape in Northwest Arkansas. He said the Walton family is providing Grit Studio the office and meeting space on S.E. 5th St., in downtown Bentonville, just a few blocks from the retailer’s home office and close to its technology center.
From acquiring the disruptive e-commerce startup Jet.com to employing Bentonville high school interns for project oriented tasks, the partnership with Grit is another interesting move by a retailer challenged to boost market share and compete with a growing number of pure online retailers.
Webb said the new internal incubator is the first of what he expects to be many more with other large area companies such as J.B. Hunt Transport, Sam’s Club and Tyson Foods. He said there are six people in the Wal-Mart internal incubator who have ideas or ventures they want to launch. Webb said Wal-Mart chose its candidates through an application process with input from Grit Studios. The six already for work Wal-Mart in it’s technology division. Over the next 12 weeks Grit Studio and Wal-Mart will put the six interns through what Webb called a rigorous accelerator program. After that, those with promising possibilities could be placed into a two-year incubator program depending on how Wal-Mart chooses to proceed.
Webb said it’s early in the initial process and there are some aspects still being discussed, such as if Wal-Mart will have exclusive rights to the ideas and who will own the idea/technology.
“It a beta for Wal-Mart and we will figure more of this out in the coming weeks,” Webb said. “Wal-Mart is covering the expense related to the internal incubator. This entire model for Grit Studio is not as much as about raising capital as it is about fostering resources and tools needed to accelerate.”
He said the important thing is to get large companies onboard with local innovation, and internal internships are a good place to begin. Webb said it could be a positive for Wal-Mart and other companies that offer internal incubators because it allows them keep the innovation local and retain the talent.
BIG THREE COMPANIES BENEFIT FROM COLLABORATION
Webb retired as senior vice president of global processes and innovation at Wal-Mart last year to focus on more work in the local entrepreneurial sector. He hopes to connect large companies and startup ideas through a support system that could help the region feature a dozen $1 billion companies, adding to the big three of Wal-Mart, J.B. Hunt and Tyson Foods. He said the big companies benefit from collaboration and innovation support and help support because it feeds the recruitment and retention of talented people. He said the big three realize it’s better to collaborate and grow a community than to divide and compete for the limited resources.
Webb modeled the Grit Studio program after a long-term incubator in Miami, Fla., that has been successful over three years turning out companies worth hundreds of millions of dollars.
“If we could just get a few $10 million companies that would be great for this region,” Webb added.
He said Grit Studio is a node for entrepreneurial support in Benton County to augment what is available in Fayetteville with the Innovation Hub, Hayseed Ventures and others. He is also recruiting startup founders whose businesses might be worth a $1 million who are interested in building a support system in the region and through regimented programs, internships and partnerships try to grow those companies exponentially over two to three years.
He admitted it’s like to trying to coordinate a difficult dance with all types of talent but said it’s also rewarding work that has garnered support from folks like Steuart and Tom Walton – grandsons of Wal-Mart Stores co-founders Helen and Sam Walton – who see possibilities to grow Northwest Arkansas’ economy for generations to come.
“I have two young granddaughters and it’s my hope that someday they won’t have to work for one of the big three if they want to stay here. I hope they have dozens of employment possibilities here in 10 to 12 years when they enter the workforce. That would be quite a legacy. That’s the dream anyway,” Webb said.
Webb’s Grit Studio was the host for the CPG Innovator’s Conference in Bentonville on Wednesday (Oct. 5). Webb opened the day’s events by discussing his new venture Grit Studio, where he shared the vision for his work.
REGION WILL NEED NEW IDEAS
Jeff Amerine, co-founder of Startup Junkie, said the idea that Northwest Arkansas is the center of universe for consumer package goods and retail might be true, but if that is to continue driving forward in the future it will take new ideas, technologies and product innovation that will be the next billion dollar opportunities.
Serial entrepreneur Dr. John James, co-founder of Acumen Brands and more recently head of Hayseed Ventures, said during his speech that Wal-Mart and all of retail must be faster and do more. He said grocery pickup, which his wife describes as “wonderful” is not enough, and at the very least Walmart should have offered this 8 to 10 years ago.
James, a professed Amazon junkie, said that company continues to disrupt, most recently announced plans to build out its own last mile delivery system aimed directly as UPS and FedEx.
“People love Nike, not FootLocker,” he explained. “Retailers with massive brick and mortar presences like Wal-Mart have some advantages but they have to innovate quickly. Disruptors are looming and they are apt to kill the sacred cows.”