Joanna Drake Earl
General Partner, Core Ventures Group
It seems that most global business leaders, regardless of industry, realize the relevance of the ongoing innovation engine coming out of Silicon Valley and are now wanting to understand and engage with urgency. But too often we see outside executives play as ineffective ‘business tourist’ and jumpstart vague innovation initiatives that are doomed from the start. Very few leaders seem to to develop a clear set of strategic objectives and a framework for doing business before they spend time in Silicon Valley.
So before you participate in another Google-Facebook-Slack-fill-in-the-blank technology innovation tour led by a Japanese consultant living in Silicon Valley, or open a 1-person business development office, or dedicate a corporate venture fund, or opportunistically acquire companies, we urge future Silicon Valley partners to consider three critical steps:
1) Define which areas of business model innovation and which technologies are most critical to your core businesses today and tomorrow.
It is hard for entrepreneurs and connectors to ‘match make’ you with start-ups without a clear market thesis and a well-articulated set of specific technology applications that are important to your business. As an indicator that corporate leaders aren’t thoughtfully framing their unique areas of focus, we see visiting executives from entirely different core businesses wanting to get in on the action and all of them seem to share the same interest list: last year the list included the sharing economy, fintech, IoT; this year it seems to be all about VR, AI and a basket called ‘disruptive technologies’.
In contrast, we have been working with Komatsu on more focused technology searches. For example, this year they articulated a very clear need: connectivity of everything (machines, workers, materials, rocks and etc.) in a job-site to realize real-time visualization and management in construction and mining sites. As you can imagine, it is easier to connect them to the top technologists pioneering ioT solutions than boiling the ocean in an open-ended search for start-ups with ‘disruptive technologies’.
2) Articulate specific objectives for engaging start-ups, co-investors and connectors in your areas of innovation focus.
Do you want to stay on top of technology trends? Study new business model innovations (e.g., marketplaces)? Acquire a defensible, competitive technological advantage?
Understanding your range of strategic objectives from medium-term identification of new business pillars (e.g., why Recruit Strategic Partners is focused on start-up technologies and business models that will complement or expand their core businesses, such as sharing economies and SaaS models) to long-term spurring of advanced technologies (e.g., why Toyota and SMBC came together to back the Mirai Creation Fund operated by SPARX Asset Management), will help you define specific initiatives and set goals for measurable impact. Vague and undefined ‘Silicon Valley engagement campaigns’ are usually doomed from inception.
3) Once you have defined the critical technologies and specific corporate objectives, develop a roadmap for engaging with start-ups.
It’s most useful to map specific objectives with specific partnership formats, which can range from becoming an investor in a Silicon Valley VC fund, to sponsoring advanced technology development at University incubators, to trialing early technologies from start-ups, to making direct investments in start-ups, to acquisition or joint ventures. A word of caution, if a corporation is engaging in many of these activities at once, they may develop a reputation for being scattered and unfocused.
In Part 2 of this editorial, we will share specific advice on how to Put Your Best Face Forward in Silicon Valley. Literally the ideal position and profile for your Silicon Valley executive representative, and how best to build relationships with start-ups.
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