Innovation Studio talk (for Communitech conference May 2015)
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Innovation Studio A New Method for Disruptive Innovation Giff Constable, CEO of Neo Innovation May 28, 2015
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Transcript of Innovation Studio talk (for Communitech conference May 2015)
Innovation StudioA New Method for Disruptive Innovation
Giff Constable, CEO of Neo Innovation May 28, 2015
Portfolio Team
Autonomy Structure
@giffco
Who am I?
• CEO of Neo (neo.com)
• 20 years in startup ecosystem as founder, builder or advisor
• Author used in entrepreneur programs at Harvard, MIT, Berkeley, NIH/NSF, etc
• Spent the last 3 years focused on enterprise innovation
@giffco
Analog > Digital
Image: https://www.flickr.com/photos/guysie/6095265888 @giffco
Image: https://www.flickr.com/photos/62693815@N03/6277209256
@giffco
Image: https://www.flickr.com/photos/downhilldom1984/6089311342
@giffco
Image: https://www.flickr.com/photos/aturkus/255736904
@giffco
Sustaining Disruptive
@giffco
Previous Attempts
Image: The Alto personal computer in 1973. (PARC/Xerox) @giffco
R&D labs
Incubators
Startup accelerators
Crowdsourcing
Shark tanks
IP Licensing
@giffco
Find lessons in the startup ecosystem
Image: https://www.flickr.com/photos/sadsnaps/3731785398 @giffco
Portfolio Team
Autonomy Structure
@giffco
VC Results (’04-’13)
42.0%&
22.8%&25.3%&
5.9%&
2.5%&1.1%& 0.4%&
0.0%&
5.0%&
10.0%&
15.0%&
20.0%&
25.0%&
30.0%&
35.0%&
40.0%&
45.0%&
Fail& <=1x& 135x& 5310x& 10320x& 20350x& 50x+&
Source: Seth Levine, Correlation Ventures data, “Fail” category estimated http://www.sethlevine.com/wp/2014/08/venture-outcomes-are-even-more-skewed-than-you-think
21,640 financings
@giffco
5 Shots on Goal
2"
1" 1"
0" 0" 0" 0"
Fail" <=1x" 1,5x" 5,10x" 10,20x" 20,50x" 50x+"
@giffcoSource: Seth Levine, Correlation Ventures data, “Fail” category estimated http://www.sethlevine.com/wp/2014/08/venture-outcomes-are-even-more-skewed-than-you-think
20 Shots on Goal
8"
5" 5"
1" 1"
0" 0"
Fail" <=1x" 1-5x" 5-10x" 10-20x" 20-50x" 50x+"
@giffcoSource: Seth Levine, Correlation Ventures data, “Fail” category estimated http://www.sethlevine.com/wp/2014/08/venture-outcomes-are-even-more-skewed-than-you-think
50 Shots on Goal
21#
11#
13#
3#
1# 1#0#
Fail# <=1x# 1-5x# 5-10x# 10-20x# 20-50x# 50x+#
@giffcoSource: Seth Levine, Correlation Ventures data, “Fail” category estimated http://www.sethlevine.com/wp/2014/08/venture-outcomes-are-even-more-skewed-than-you-think
innovation team
everything else in the
world
Image: https://www.flickr.com/photos/wwworks/8026343276
This used to be prohibitively
expensive
@giffco
Open source software
Cloud infrastructure
Cheaper prototyping
Cheaper initial distribution
Lean startup methods
@giffco
Done right, enterprise can be more capital
efficient than VC
Example: Aprizi and 7 business models
@giffco
Portfolio Team
Autonomy Structure
@giffco
What do they look like?
Image: https://www.flickr.com/photos/kwl/4700247712 @giffco
• Risk Tolerance
• Resilience
• Chaos
• Generalist
• Creative
• Action
• Experience
@giffco
Business
Design Engineering
@giffco
Execution, not just ideation
@giffco
Can you get them?
(hint, it’s not about equity)
@giffco
Mission Mastery
Autonomy
tip: read Drive, by Dan Pink @giffco
Portfolio Team
Autonomy Structure
@giffco
Product ownership is essential
(this does not have to mean equity)
@giffco
Autonomy comes with accountability
@giffco
You need a team captain
Image: Star Trek, Paramount @giffco
What does a “startup CEO” do?
• Whatever it takes to make it successful
• They own vision, hiring, funding
• They are often product manager #1 and sales person #1
• They keep the pace up, and make the hard calls
@giffco
What do they look like in an enterprise context?
• Product and strategic vision
• Founder-market fit
• Has been through the fire ideally as a founder (even if startup didn’t succeed)
• Forceful enough to overcome big challenges
• Charismatic enough to keep a team motivated and focused even through tough times
• Humble enough to build bridges to other parts of the business
@giffco
Good startups also have a board
@giffco
Ideally not this
Image: The Hudsucker Proxy, Warner Bros. Pictures @giffco
What does a “startup board” do?
• Represents the shareholders’ interests
• Hires/fires the CEO
• Approve major investments, financings, or the sale of the business
• Advise on strategy and assist the team
• NOT manage the business
the key point for enterprise@giffco
Autonomy is not isolation
@giffcoImage: https://www.flickr.com/photos/scragz/2715873958
Portfolio Team
Autonomy Structure
@giffco
Big companies have unique challenges
Image: Monsters Inc, Pixar
@giffco
This requires the right structure
@giffco
Image: Pixar
Parent Company
Studio
@giffco
Parent Company
Studio
@giffco
Parent Company
Studio
IDEA
IDEA
IDEA
@giffco
Parent Company
Studio
IDEA
IDEA
IDEA
Point 1: execution, not just ideation!
@giffco
Point 2: some of the team must stay with the idea!
Parent Company
Studio
Team 1CEO
DesignerDeveloper
(tbd)
Team 2CEO
DesignerDeveloper
(tbd)
Board
GMProduct Lead
SharedBranding
Content StrategyBD
SME
CEO Entrepreneurial Expert Domain Expert GM
Advisory Board @giffco
Parent Company
Studio
Team 1CEO
DesignerDeveloper
(tbd)
Team 2CEO
DesignerDeveloper
(tbd)
Board
GMProduct Lead
SharedBranding
Content StrategyBD
SME
Advisory Board
How far to sandbox?
@giffco
Sandboxing
• In most cases, reporting to CEO is imperative
• Can structure it inside the organization (but no matrix reporting)
• Can create a wholly-owned subsidiary (equity flexibility and external capital resources)
@giffco
Sandbox doesn’t mean secrecy
(use transparency to build bridges)
@giffco
Strategic Constraints
(company vision) (strategic thesis)
@giffco
Two Levels of Metrics
@giffco
Studio LevelExternal Headlines by 10 years Out Better Medicine Through Better Learning
Target: 50% of practitioners using our products see better patient outcomes because of the service ("you've made me better at my job").
We Create the Go-To Learning System for Medicine
Target: 25% of healthcare professionals in the USA are using our new products and services.
Speeding Adoption of Medical Advances
Target: We noticeably speed not just dissemination of information but adoption of important new breakthroughs.
Internal Headline Innovation Studio Pays Its Own Way
Target: Products from the studio all have the potential to be break-even by year 3.
@giffco
Dangerous Metrics
• Number of ideas
• Time / resources per idea
• Near-term Revenue
• Near-term Profit
@giffco
Idea Level Metrics
@giffco
What does success look like?
Image: Back to The Future, Universal Pictures
@giffco
5 Years Out
• Across the portfolio, have 1 or 2 ideas that show signs of making a material difference to market cap
• Another 2-4 ideas are financially strong
• Healthy bridges with the rest of the company
• Recurring capability to push the envelope and translate that into real business
• Inspiration on speed, transparency, and fresh thinking
@giffco
Failure Points to Solve
• Growth capital for the ideas that deserve it
• Hand-offs
• Quarterly EPS pressures
• Success theater
• and…
@giffco
Portfolio Team
Autonomy Structure
@giffco
