Volkswagen's Silicon Valley play shows corporate giants need to get small

It’s not easy being a giant.

One of the toughest things for companies that grow into humongous corporations is to keep the innovative edge that got them that big in the first place.

Volkswagen’s latest bet on Silicon Valley is an acknowledgement of that, even if the car company that brought us both the Doodle Bug and Herbie the Love Bug isn’t spinning it exactly that way.

The company (or an arm of it called, deep breath: Volkswagen Group of America Electronics Research Laboratory) announced today that it’s joining with Sunnyvale start-up hot house Plug and Play Tech Center in an effort to capture some innovative mojo.

Or put another way by VW’ research lab’s executive director Peter Oel:

“Innovation is an integral part of Volkswagen Group’s long term product strategy and we take every opportunity to engage the brightest minds in technology to help define the future direction of automobiles. Our partnership with Plug and Play Tech Center provides an extraordinary platform for the most talented entrepreneurs in Silicon Valley and around the country to bring forth innovation that will help us develop the most intelligent, connected vehicles of the future.”

Plug and Play, which founder Saeed Amidi likes to call “Silicon Valley in a box” because it strives to be a self-contained start-up ecosystem, will help connect VW with 10 start-ups that have cutting edge ideas to make driving more fun (or if you’re like most people, less horrible).

The company and the incubator are looking for companies working on social media, integrating mobile devices with cars, parking apps, display, voice recognition and visual computing.

All of which has me looking for a company working on technology to eliminate distracted driving.

But seriously, the move by Volkswagen, which has a shop of 100 engineers, researchers, designers and social scientists working in Belmont, shows how important tech is to the auto industry. As the basics of cars become more and more alike, car makers are looking to differentiate their products with bells and whistles.

Car companies are increasingly embracing the valley. I wrote in March about how Silicon Valley could be the next Detroit — and that’s a good thing.

Volkswagen’s move is also a sign of a bigger trend. Large, established companies are looking for ways to stretch their innovation muscles. Sure, they have big R&D operations, but sometimes such operations are weighted down by the legacy of the parent company.

“I don’t think you can make the elephant dance,” is the way Amidi put it when I talked to him recently. “I think what you must do is partner with an innovative company.”

The arrangement, of course, is good for the 300 start-ups around the world that are affiliated with Plug and Play. If one, or 10 of them, connects with Volkswagen, it not only opens up the possibility of landing a big deal, but it provides an instant endorsement from one of the world’s best known companies.

Amidi says VW isn’t the only company that has been looking for innovative partners. And he’s certain it won’t be the last to partner with Plug and Play.

 

Mike Cassidy Mike Cassidy (173 Posts)

I write about the culture of Silicon Valley for the San Jose Mercury News.