Assurant Health Shutters In-House Startup Incubator Blue Bananas

8/25/14Follow @JeffEngelXcon

Milwaukee-based insurer Assurant Health has shut down its in-house startup incubator, Blue Bananas, Xconomy has learned.

Blue Bananas was launched in 2012 to come up with services that make healthcare more affordable, particularly for people with conditions like diabetes, high cholesterol, and arthritis. Assurant Health’s skunkworks crew produced at least a handful of concepts that they tried to turn into successful businesses. Some were shelved along the way, according to the Blue Bananas website. Perhaps the most well known business created by Blue Bananas was Pairdd, a home delivery meal service for those with gluten intolerance.

But Assurant Health has discontinued Blue Bananas, vice president of communication Mary Hinderliter confirmed in an email today.

“The efforts of this group helped advance our understanding of the customer and emerging needs in health care,” Hinderliter said. “However, we made a business decision to discontinue operations of Blue Bananas due to the expense of running a separate startup model.”

Most big companies say that they strive to be innovative. One way corporations try to accomplish that goal is by forming a team tasked with brainstorming ideas and using lean startup methods to turn those concepts into quality products or healthy businesses. But the Assurant Health example illustrates the difficulties of coaxing innovation within an existing, large enterprise—and the business realities that these in-house incubators face because they’re dependent on the parent company’s funding.

Assurant Health is giving Blue Bananas’ team of seven severance pay and help finding new jobs. They can also apply for other positions with Assurant, Hinderliter said. Xconomy sought additional comment from three former Blue Bananas employees, but one of them referred Xconomy to Hinderliter for comment, while two others could not be immediately reached.

Assurant Health was one of the few Milwaukee-area corporations with a dedicated in-house incubator that has been publicly disclosed. Johnson Controls (NYSE: JCI) opened an innovation center in 2012 in Milwaukee’s Third Ward, near downtown. Rather than churning out new subsidiary startups, Johnson Controls’ innovation office has served as a hub for generating ideas and completing projects across the global company’s existing businesses in advanced batteries, building efficiency products, and automotive interiors.

Meanwhile, one of Milwaukee’s oldest and most famous corporations—Harley-Davidson—revamped its R&D process a few years ago. That has led to several notable product launches, including a lightweight motorcycle line and a planned chopper powered by an electric engine.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon