Daimler’s Lab1886: Shaping the Future of Mobility

Corporate Incubator of the Week

Corporate incubators have become all the rage among companies looking to expand non-core growth and experiment with new business models. And it’s not surprising! 

Incubators are a proven way to leverage corporate assets, explore new areas of growth, fuel innovation, and foster an entrepreneurial mindset – all with the end goal of making your company stronger and more future-proof. 

Many successful multinationals like Google, RBC, Lufthansa, and Merck have already jumped on the bandwagon and set up their own incubators with stellar results. Here at Bundl, we want to celebrate their success by featuring our favorite Corporate Incubator stories in a series similar to our corporate-startup stories. 

This week, we’re exploring the story behind Lab1886, Daimler’s very own corporate incubator. Let’s start at the beginning…

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Cars

A little bit about Daimler AG.

With a history that dates back to 1886, Daimler has 3 very successful business units:

  • Mercedes-Benz AG is one of the world’s most renowned producers of premium cars.
  • Daimler Truck AG is one of the world’s largest commercial vehicle manufacturers.
  • Daimler Mobility AG provides a wide range of financial and mobility solutions. They also invest in app-based innovations like car-sharing and ride-hailing.

Daimler’s product portfolio includes multiple brands like Mercedes-Benz Cars, Daimler Trucks, Daimler Buses, and Mercedes-Benz Vans (among others). 

With production facilities all over the world and a 2019 net profit of $195 billion, it’s hard to imagine what challenges this industry titan could possibly face. However, like most forward-thinking companies, Daimler is aware of the importance of innovation. 

In recent years, the automotive industry has been significantly affected by factors like the rise of smart mobility, green technologies, and automated driving.

One of the ways Daimler has remained an industry leader is by creating its own independent innovation lab, Lab1886. Their goal is to identify new business opportunities, including those outside its core business, and incubate them until they’ve reached market maturity.

About Lab1886.

Since the invention of the first automobile in 1886 (yes, that’s where Lab1886’s name comes from), Daimler has taken automotive engineering to unprecedented heights. Lab1886 was created to help keep that legacy alive. 

Established in 2007, Lab1886 is an independent innovation lab within Daimler AG. Their mission is to identify innovative ideas and leverage Daimler’s corporate know-how and assets to nurture them until they become successful ventures, like these three:

The thinking behind Lab1886.

  • Ideation – Promising ideas get validated in-house. After that, an expert panel decides on how to proceed.
  • Incubation – This is the phase where new prototypes are designed and pilot projects are developed.
  • Commercialization – During this phase, projects get rolled out to the global market.

One of their strategies is to explore digital concepts outside Daimler’s core business. Experimenting with new technologies and business models is helping Daimler expand beyond automobile manufacturing to become a mobility provider. 

  • Lab1886 operates independently from its parent company. This gives its employees the freedom to develop new ventures outside the typical corporate hierarchy in an environment that fosters an entrepreneurial mindset. In other words, they bring together the best of both worlds:
  • The corporate assets it takes to succeed.
  • The lean and agile mindset found in most startups. 

As described in Lab 1886’s website:

“With a network of strategic partners, digital experts, extraordinary skills, high financial stability, and a start-up mindset, Lab1886 provides the perfect conditions to develop game-changing businesses.”

The benefits.

In a landscape as competitive and fast-moving as the automotive industry, future-proofing is the name of the game. Daimler is making great strides toward that goal through Lab1886. 

These are just some of the benefits of having their own corporate incubator:

  • It’s a great way to actively build a culture of innovation.
  • It helps Daimler tap into new markets and accelerates the development of innovative value propositions.
  • It helps Daimler evolve beyond its core business by leveraging its expertise, resources, and partnerships. 
  • The newly acquired insights can help future-proof the company, solving existing problems faster, more cost-effectively, and with lower risk.
  • It facilitates innovation through creation, experimentation, and learning by failing.
  • All the new experiments provide access to new ideas, skill sets, and technologies.

What’s next?

With several successful projects under their belt, Lab1886 is still going strong in its mission to nurture promising new startups – from idea to launch.

One of their more recent projects involves a technology called AXYARD. The technology is now being used for automated snow removal with self-driving vehicles

They will continue to support their teams by providing the resources, infrastructure, coaching, and mentoring needed to build disruptive new ventures – with a focus on technology.

 

Learn from 25 successful corporate incubators.

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Ritza Suazo

Ritza Suazo

Innovation Journalist