Prehype Spins Start-ups Out of Big Companies, Then Sells it Back to Them

David Tisch was chatting recently with venture investor Mark Suster, about what led him to embrace the accelerator model for start-ups. He was working at KGB and eventually spun a start-up out of the larger organization. “I had my own little group within this big company. Trying to innovate within a big company sucks, didn’t work, so I left there.”

The next stop for Tisch was TechStars NY, which helped grow some terrific startups over the last three months. But that program, like most accelerators, doesn’t address the issue of great entrepreneurial talent that might be locked up within a corporate bureaucracy, it simply avoids them.

Prehype, which bills itself as a product innovation boutique, thinks it has a formula for helping large companies foster new ideas. It plucks teams out of a big entity and works with them for 100 days crafting and iterating a new idea. Then, if the start-up gets traction, Prehype sells it back to the parent company. Giving the process over to Prehype to incubate in their “hothouse” allows the companies to offload the risk and avoid the difficult work of re-engineer their corporate culture.

So far the model has been tested with a diverse set of clients: local idea lab betaworks, the massive education company Kaplan the marketing firm Wolff Olins and the venture capital firm Sunstone Partners. Local start-ups Chartbeat and Go Try It On have also worked with Prehype.

Managing partner Henrik Werdelin says the model leverages the best of both worlds. “Because it is very inexpensive to get a web start-up or an mobile app up and running, a lot of the conversation is going to shift towards distribution, the power of big companies to connect new products with their marketing channels and business networks. Rather than trying and failing to incubate internally, they can shift that process to us, then share in the upside if the end result gains traction.”

Prehype Spins Start-ups Out of Big Companies, Then Sells it Back to Them