We convened with corporate operators, venture investors, and innovation leaders from energy, healthcare, and technology to examine how pilots—particularly for First-of-a-Kind (FOAK) and other large-scale, high-risk projects—can succeed or fail, and what this implies for the next phase of corporate–startup collaboration.
Across sectors, a consistent message emerged: Designing pilots well requires discipline, realism, and alignment across stakeholders. While pilots benefit from reduced scope, they often carry outsized technical, financial, operational, and reputational risk. Despite this, there is continued fervor to explore and derisk worthy propositions to ensure a higher probability of success.
1. FOAK Economics: Cost, Scale, and Reality
A recurring theme was the systematic underestimation of FOAK costs. Engineers may initially identify aggressive cost-reduction opportunities, only for projects to revert to original estimates once real-world constraints surface. The takeaway was not pessimism, but rigorous justification:
• FOAK and pilot budgets must be explicitly tied to risk, not optimism. Essentially, plan for more money, not less.
• Scale should be determined by the riskiest component or weakest link—high-risk elements must be validated at smaller scale before full deployment.
• Modularity can help manage uncertainty, but it does not eliminate cost, time, or integration risk; modularity is also often harder to realize in practice, as variability in operating conditions, interfaces, and legacy systems frequently turn modular deployments into bespoke projects.
• Many major infrastructure projects (e.g., offshore platforms) are effectively FOAK; success depends on contingency planning, not pretending otherwise.
2. Pilots Only Matter If Commercialization Is the Goal
There was strong alignment that pilots should only proceed if there is a credible path to commercial deployment:
• Avoid pilots that are interesting science experiments.
• A smaller pilot only makes sense if it meaningfully de-risks a larger deployment or, in most cases, pipeline of deployments.
• Free or underpriced pilots are often a red flag—if a solution can’t be afforded at scale, it likely won’t be adopted.
This reinforces a broader principle: pilots are investments, not experiments, and must be treated as such.
3. What Actually Makes Pilots Successful
Despite sector differences, there are some universal characteristics of successful pilots:
1. A clear business proposition
Not just technical novelty, but a well-defined operational or financial outcome. Business reps & deal teams must ensure financial and strategic value is clearly outlined and well modeled.
2. A strong set of operational champions
People close to the work—not just leadership—who owns execution and accountability, with cross-functional buy-in so progress does not hinge on a single champion in the company.
3. Always keep internal alignment in mind
Being able to know when it’s appropriate to socialize a pilot based on long term vs near term goals of the organization.
4. Value is captured & articulated in a single voice
Sometimes the value is created as part of an overall value case that can’t be specifically measured (e.g. in the case of an F1 racer, no one can say that winning a race was 50% the tires). Sometimes pre-drafting testimonials that emphasize how critical a technology was to performance helps.
Equally important is what doesn’t work: when scorecards are designed for how a process should work, rather than how it actually works, teams are shooting darts with an off-center bullseye. Quality scorecards must track what’s most valuable to driving the actual success of the pilot.
4. Speed vs. Risk: Why “Move Fast” Can Backfire
While speed is often celebrated in innovation, there were clear learnings that moving too fast can create lasting damage:
• Early failures—even if ultimately resolved—can create reputational risk that permanently stalls adoption.
• Pressure to accelerate timelines can amplify operational and safety risks, especially in FOAK contexts.
• In high-stakes environments, risk reduction matters more than calendar speed.
One practical insight for how to discuss risk and failure around a pilot: the most productive discovery conversations often exclude direct reporting relationships, allowing frontline teams to speak candidly about constraints and failure modes.
5. Corporate Venture Capital: Support Has Limits
A key insight: ventures can enable momentum, but startups must ultimately carry momentum forward.
• Venture teams can create access but cannot guarantee adoption by business units.
• Investment decisions increasingly favor companies with multiple paths to success—technical pivots, regional diversification, or alternate markets.
• CVC impact should not be reduced to a single metric; strategic value often emerges across technology roadmaps, organizational learning, and optionality.
• Alignment with corporate strategy must persist over time—new leadership and shifting priorities are a constant reality.
• Sometimes CVCs can help soften internal budget conflicts on pilots by having a deployment budget to use for pilots.
6. What This Means for the Next Phase of Corporate Innovation
The model of corporate–startup partnership is maturing as corporates seek:
• Fewer, better-designed pilots
• Realistic budgets and contingencies
• Clear commercialization intent
• Shared accountability for outcomes
• Deep engagement with frontline operators & the team members that will best realize the value from a technology being implemented
How exactly these aspects are defined and put in practice will continue to evolve as corporate innovation and piloting continues to evolve.
Contributors
• Deanna Zhang
Moderator
Co-Founder, Node; CEO, V1 Climate Solutions
• John Willis
VP Technology Ventures
Oxy
• Murat Uralkan
Director of Innovation
Houston Methodist
• John Stevenson
Innovation Hub Director – Houston
Microsoft
• Coco Seney
Director of Strategic Partnerships
The Rice Alliance, Rice University
• Kristiann Rushton
Technology Enablement Manager – Operations & Facilities
Chevron Technology Ventures
• Vanessa Brown
Technology Enablement Manager – Subsurface
Chevron Technology Ventures