Swiss Post is one of the largest employers in Switzerland with close to 55’000 employees. Why is this giant company interested in startups?
The goal of the team I am heading is to establish external partnerships to source additional knowledge, hence increase the innovation potential of Swiss Post. We want to explore new trends and technologies, but above all, we want to find viable business cases. Per year, we run about 15 projects with startups and also invest in 2 to 3 startups. In certain cases, a collaboration initiated by us enables a business unit to acquire startups outright, as PostLogistics did with the bicycle courier services startup Notime.

What exactly do you look for?
We are looking for the best startups worldwide. In those promising for us, we invest in an early stage with tickets ranging typically from 0.5 to 1.5m for a minority stake. One topic we are following closely is smart supply chain. Historically, we have been transporting parcels and letters, but we want to extend our services along the value chain. Healthcare is, for instance, an interesting vertical: we want to enable clients like hospitals to outsource their logistics, as a non-core business, to professionals like us who are able to provide specialized added value services, such as reporting conditions of sensitive goods. Other topics we are actively pursuing are seamless cross-border commerce with all the issues related to customs clearance or returns management for parcels. Since we also operate in the mobility business with PostBus, we are interested in multimodal and green public transport.

This sounds interesting, but how can you make sure that all these great ideas out there actually have some impact in a very large organization that is 171 years old?
Many companies underestimate that the innovation team needs a lot of passion and a good internal standing so it can pitch the business opportunities internally, market them and fight for them. If your corporate venturing team is some finance guys who don’t know the needs of the business units and the markets they operate in, they’ll have a hard time doing that. Having more than 10 years of experience at Swiss Post helps me a lot. I can leverage my internal network and know the needs and pains of my key stakeholders. However, even with this knowledge, it is often about activating these connections and promoting our strategic role and impact with pitches, blogs and articles. This needs to be done if corporate venturing is to generate value for the Group and for the startups.

Why would a glitzy young startup choose Post as an investor?
We help them gaining access to their market and explore new business opportunities. For instance, we introduced the startup Optilyz to several of our important customers, such as Manor, with great success as they are now collaborating. Or, take the French delivery startup Trusk, in which Verve Ventures and we co-invested. We told them that if we invest, we will start to create value by facilitating the market entry in Switzerland. That is what we ultimately did via joint customer meetings with PostLogistics. In the case of the drone company Matternet, we helped them shape the business case. They were the specialists for technology, we were the specialists when it came to market needs and verticals. With the use case in healthcare we helped them define, they were able to win UPS as client or McKesson as an investor. The communication startup Beekeeper is another example. Again, Verve Ventures and we co-invested, opening some doors internally. Now, the service is used by a business unit with 7000 employees. The startup Bring! has a very successful collaboration with our spin-off Profital. These examples underline that we are very committed and provide a lot of value to startups.

Well, you have been exploring and experimenting with a lot of startups. Errors always happen if new things are being tested but in the case of Swiss Post, failures may make more noise. How can you strive for precision and reliability while embracing experimentation at the same time?
If you want to innovate, you need to try things, which entails the risk of failure. In that sense, failing is not a surprise but definitely a challenge, as our company’s DNA is built on reliability and precision. My job is to reconcile these positions to find a common language between a startup and an established business unit as well as between long-term and short-term goals. On top of that, you are right: the public can be very emotional when it comes to state-owned companies with a reputation for reliability, be it Post or SBB. If we can show that we take calculated risks and the result is worth it, the public’s understanding of our approach increases.

I see the challenges. So, why does a postal company need to innovate?
We do not need innovation per se, what we need is profitable growth, internally and externally. To achieve that, we want to extend our offering along the value chain and diversify geographically. That does not mean that we will buy another postal organization, but we might, for instance, acquire regional companies in the freight logistics area. In order to develop a new business solution, it is necessary to receive inspiration and best practices from the leading companies, no matter where they are. To profit from this, we are opening a new outpost in Shanghai, in addition to the one in Silicon Valley.

What do you want to do there?
When thinking about autonomous warehousing, new retail (best of both online and offline commerce) or food delivery, China is the place to be. To ensure the long-term future of the Swiss Post, we need to connect with different ecosystems. You can learn a lot more by attending a startup pitch and experimenting with the real applications on-site, than by reading a report written by a consultancy. We will connect the dots and allow our internal stakeholders to attend dozens of pitches virtually or on-site and learn first-hand what is happening in a mature market. This will accelerate innovation within the Group.

Talking about the long-term future, how will Swiss Post look like in 20 years?
It is difficult to predict the future. For sure, the number of letters sent will continue to fall. E-commerce will continue to gain importance, and we can provide an individualized supply chain. The trust that the Swiss population has in its postal service is the basis for new services like e-voting or digital health. Swiss Post will open its branch network to service companies and authorities. The partners for whom the network is opened will benefit from Swiss Post’s service delivery as well as the possibility of offering their customers a physical contact point in this digital age through the Swiss Post network. We are confident in the ability of Swiss Post to grow at a high pace and see investments in startups as strategic bets perfectly fitting this ambitious strategy.

Let’s talk a bit more in detail about those investments in startups through your corporate venture program. How does your process to assess startups work?
The rationale to start our venture program is that we had so many interesting projects with startups in the past that, at some point, we decided to invest in some of them to benefit from the market traction it gained thanks to our collaboration. We have extensive business knowledge and competencies in-house. Nevertheless, we decided to collaborate with Verve Ventures as external support in two areas, namely deal sourcing and pre-assessment of startups. This is an ideal combination from which both partners profit. In the current joint review and assessment sessions, the different perspectives of private and corporate VC complement one another.

With the startups we want to have a closer look at, we organize workshops to get to know them and their business model in detail. From the first screening until we are ready to make an investment decision it generally takes 1 to 2 months, in special occasions less.