Iterative Problem Development Process in Startup Innovation Contests

Corporations use open innovation approaches to solve internal problems by utilizing external knowledge, for example, in the form of crowdsourced innovation contests. However, the issue of formulating an innovation problem for broadcasting is under-researched. We address this issue in the context of startup innovation contests, a new form of crowdsourcing in which corporations crowdsource problems to startups and which is managed by a program. Specifically, this study examines how problem statements are formulated and how they are constructed collaboratively by the participating actors in this setting. Using a case study analysis with a processual microlens, we analyze five companies in the German Housing industry, each crowdsourcing a problem and later collaborating with a startup. Our analysis examined the changes in the problem statement throughout the process. We find that an unequal balance between knowledge seekers and startups during problem formulation results in cancellations or delays during the pilot project implementation. The research highlights the relevance of the problem formulation process in corporate-startup collaboration and provides a fine-grained perspective in the broader understanding of problem construction.