Incremental changes are happening in these large sectors, but large companies still do not have the comfort level or skills to work with multiple startups simultaneously. They may trial new products and services, or sponsor a hackathon to invite entrepreneurs to develop a new tool for the business, but then they do not follow through and actually develop it and offer it to consumers. This phase of innovation – broadly embracing third-party vendors and working several projects simultaneously – still has a fairly slow pace and low level of activity compared with other developments in the area of innovation.
Even while large companies are trying to determine what third-party vendors to work with on developing innovative products and services, they are setting up exploratory funds and investing in startups. Dozens of banks have launched $100M venture funds in the last five years. In some cases, this provides the large company with a way to get closer to the startups without having to actually launch the product. A financial investment in a third-party vendor also provides a way for the large company to more easily move into the area of value-added services the vendor can create, since the firms already have an established working relationship. Additionally many companies are using innovation competitions to generate awareness among entrepreneurs as well as attract their engagement through reward prizes. For example, Verizon's $6M Powerful Answers Awards (innovation contest), BBVA's Open Talent Competition, Qualcomm's Xprize.