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We Help People Bring the Future to Market
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We help our clients learn from, work with, and work like startups.
CONNECTSTRATEGY & INNOVATION To deliver effective and timely solutions with real impact…
What would you say we do here?
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Today We Will Discuss: How to Get From Inspiration to Execution
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The High Level Agenda
Innovation Done the Silicon Valley Way
A New World Order
A Common Innovation Language: A Few Models of Innovation
- Standard Corporation Innovation Management Models
- OODA Loop
- The 3 I’s – Innovation, Innovative, Innovator
- Innovation 3.0
Innovating w/ Startups
- How to Gain Speed and Stave off Disruption
- Some Best Practices
- Examples and Q&A
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Innovation Done the Silicon Valley Way
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Silicon Valley Overview
Introduction
Where is it? Silicon Valley is a nickname for the area encompassing the greater San Francisco Bay Area in Northern California.
What is it? Silicon Valley is where the first microprocessor (a silicon-based integrated circuit) was invented, along with the microcomputer. Its startup-friendly ecosystem has made it the technological capital of the world and it is home to some of the world’s most innovative corporations, startups and entrepreneurs.
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A Little History on the Valley
eBay acquires PayPal. Elon Musk uses the money to found SpaceX.
Microsoft launches Internet Explorer
Kleiner Perkins opens on Sand Hill Road
100 new internet companies are listed on the stock exchange
‘ 97 ‘ 04 ‘ 12
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Apple debuts ‘Lisa,’ the first PC with a Graphical User Interface
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Shockley ends silicon research. 8 of his people leave to form Fairchild Semiconductor, which becomes the first “startup” to receive venture funding
Stanford Industrial Park opens Apple Inc. is
founded in Cupertino
Xerox creates Palo Alto Research Center (PARC)
IBM invents the ‘Floppy’ disk
‘ 77
Apple’s IPO becomes the largest in history at $1.3B
Larry Ellison founds Oracle
Marc Andreessen creates the first browser for the World Wide Web
Google has 8 employees
2000
The NASDAQ crashes and the dot com bubble bursts
Mark Zuckerberg founds Facebook and relocates HQ to Palo Alto
Facebook sets record for largest IPO in high-tech history ($16B)
Larry Page & Sergey Brin found Google
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‘ 56 1970
1953 ‘ 71
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‘ 76 1980 1990
‘ 99
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Facebook acquires WhatsApp for$19B
William Shockley replaces Germanium with silicon as a semiconductor
Cisco founded
Tim Berners-Lee of CERN invents HTML and demonstrates the World-Wide-Web
Blogger launches
Marc Benioff founds Salesforce.com to bring enterprise online
Stanford student Jerry Yang founds Yahoo
Reed Hastings founds Netflix
Apple launches the iPod
‘ 01
HP acquires Compaq for $25B
Peter Thiel, Max Levchin, and Elon Musk found PayPal
‘ 02
2010 ‘ 07
Apple launches the iPad
Google acquires Nest for $3.2B
Apple launches the iPhone
‘ 06
Jack Dorsey founds Twitter
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How the Valley Works - Ecosystem Overview
IPO ACCELERATE
FAIL [it happens. a lot.]
VENTURE CAPITALISTS ACCLERATORS CORPORATES
CORPORATE VENTURE
PARTNERSHIPS M&A
FUNDING GROWTH
ACCELERATORS
STARTUP EXIT
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The Players: Startups
EARLY STAGE GROWTH STAGE MATURE IDEA
FOUNDERS, FRIENDS & FAMILY
S a n d H i l l R d
IDEA
9 – 18 months
FUN
DIN
G A
MO
UN
T
FUNDING STAGE
BOOTSTRAP $250K - $2M
$1M - $15M
$10M - $30M
$20M+
[ or other exit ]
SEED
SERIES A
SERIES B
SERIES C+
IPO
2 – 8 years
ANGEL INVESTORS
TRADITIONAL VENTURE CAPITAL
BUILD prototype Explore idea Get co-founder(s)
LAUNCH product Test features Get feedback
DISTRIBUTE product Build user base Build business model
SCALE Team User Base
KEEP SCALING
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The Players: Accelerators
ACCELERATOR PROGRAM
THE ACCELERATOR PROVIDES: • seed investment ($25 – 50K) • mentorship and support • legal foundation for the company • accelerated development timeline
THE FOUNDER HAS: • an idea or partially
developed product
THE STARTUP LEAVES WITH: • a minimum viable product • a strong network • the accelerator’s name
Most accelerator programs culminate in a Demo Day, where investors get a chance to preview the graduating companies. YCombinator’s demo day attracts over 450 premier investors as well as tech-obsessed celebrities like Ashton Kutcher.
{ 3 – 6 months }
DEMO DAY
THE ACCELERATOR PROCESS
WHAT IS AN ACCELERATOR? Accelerator programs are designed to help startups get from idea to product and become more attractive to investors.
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The Players: Corporations
Some corporations develop “labs” that operate almost like an internal startup. These R&D centers practice rapid prototyping and agile development to launch new digital products for the organization.
INNOVATION LABS
CORPORATE ACCELERATORS CORPORATE INNOVATION TEAMS Corporate accelerators are designed to align a cohort of startups with the corporate’s strategic objectives. The company often partners with or even acquires the startups after the program. Typically these programs are run by a 3rd party like RocketSpace, who have the expertise to run a successful accelerator.
These are internal teams tasked with driving innovation throughout an organization. Often they establish a presence in Silicon Valley to be closer to both startups and larger innovators like Google.
Corporate venture arms generally invest in startups in the corporate parent’s industry (a notable exception is Google Ventures, which is run for financial objectives rather than for finding startups compatible with Google).
CORPORATE VENTURE FUNDS
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A New World Order
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What Will Disrupt You?
“Everywhere, the rate of change is so fast that large companies are in constant danger of disruption. Not from competition in China or India, no. They're in danger of being made obsolete from two guys/gals in a garage in Silicon Valley, or anyone, anywhere, empowered by exponential technology, willing to risk it all, driven by their passion.”
Peter Diamandis
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Corporations Need to Wake Up!!!!
h$p://thefuturesagency.com/tag/disrup8on/
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Consider This…
Straw poll, the Average Time it Takes a Company to bring a New Product to
Market = 2-‐3 years
In Some Cases, The Average Time it Takes a New Widely DisrupFve Technology to be Adopted by 50 Million Users in 2015 = 45-‐60 days
And when they do make it to market the numbers in most cases are: “Less than 3% of new consumer package goods exceed first year sales of $50 Million”
h$ps://hbr.org/2011/04/why-‐most-‐product-‐launches-‐fail
The effects of the autonomous car movement will be staggering. PwC predicts that the number of vehicles on the road will be reduced by 99%, es8ma8ng that the fleet will fall from 245 million to just 2.4 million vehicles.
http://sanfrancisco.cbslocal.com/2015/01/27/how-ubers-autonomous-cars-will-destroy-10-million-jobs-and-reshape-the-economy-by-2025-lyft-google-zack-kanter/
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Still Not Scared?
Executing on Innovation with Speed is More Important Today than Ever!
http://sanfrancisco.cbslocal.com/2015/01/27/how-ubers-autonomous-cars-will-destroy-10-million-jobs-and-reshape-the-economy-by-2025-lyft-google-zack-kanter/
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According to a survey that Inc. 500 did with CEO’s in 2015, these are the 5 industries most ripe for disrup8on.
Successful Execution of Innovation Means You have a Strategy to Address These Trends, and Are Actively Creating New Products and Services to Keep your Company Competitive Now!
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Does Disruption Impact All Products?
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Make It Real…Business Models Destoyed
The Old Way - Kodak: - Introduced their version of the digital camera in the
mid 1970’s
- Didn’t go bankrupt until 2012 - Took 37 years for the disruptive technology to push
them out of the market The New Economy - Blockbuster: - Netflix launched in 2007 - Blockbuster files for bankruptcy in 2010
- Took only 3-years for the technology to be adopted and destroy their business model
Focus Point:
As John Chambers, Chairman of CISCO, said, “Speed of Disrup8on is the key Measure of Innova8on, and Why we all Need to Plan Now.”
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Speed is Speeding Up at a Faster Pace
http://blogs.wsj.com/economics/2015/03/13/it-took-the-telephone-75-years-to-do-what-angry-birds-did-in-35-days-but-what-does-that-mean/
Forbes—”WhatsApp gained more followers in its first six years than Chris8anity did in its first 19 centuries.”
23 McKinsey & Co
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The Signs Are Everywhere
Market Cap. $27 Billion Founded 1919
Market Cap. $22 Billion Founded 2008
Market Cap. $46 Billion Founded 2011
Market Cap. $186 Billion Founded 1837
Market Cap. $180 Million Founded 1914
Market Cap. $1.7 Billion Founded 2011
Is your company on the leQ or the right?
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The Good News?
Guess Whose Job It Is to Solve For This Problem?
Ours!
What is Corporate InnovaFon Management?
Answer: The profitable implementa8on of (crea8ve?) ideas
Corporate innovaFon management is a structured process of devising and developing an idea into a viable concept, followed by turning that concept into reality and implemen8ng it as a product, service or process improvement.
‘Fast and’
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Corporate Innovation Management
Where the Buzz Words Even Have Buzz Words
Design Thinking
Commercialize
Incuba8on
Rapid Prototyping
Agile & Lean
Customer Field
Research
Co-‐Crea8on Idea8on
Open Innova8on
Corporate VC
Crowd-‐sourcing
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Why is innovaFng quickly so important?
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Innovation 1.0
No customer insights, and extremely slow and expensive
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Innovation 2.0
Externally Focused, but Execution is Still Very Difficult and Slow
Strategy Idea8on Incuba8on Launch
Flip to Business Unit
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Getting a New Idea to Market is Tough
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1) Hand over disrup8ve ideas to BU Rejected, too risky, not core
2) Develop as side project un8l validated Likely to be distracted by day to day, slow
3) Incubate by internal innova8on group Hard to scale, product pipeline rejects
4) Employ outside firm to validate idea Learning and experience not captured
Path of Idea Challenge
Typical Idea Development Paths
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Moving From IdeaFon to ExecuFon
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Innovation 3.0 The Approach – Corporate Innovation at the Speed of Startups
LEARN
Architect Discover Strategize
EXPERIMENT LAUNCH
Pilot Partner
Prototype Scale
Speed
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Food For Thought
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1. Innova8on is risky if your only metric is revenue; make success learning fast
2. Failure rate of 90%+, so fail quick and pivot smartly -‐ test, test, test
3. Reward taking risk, and incent no ma$er the outcome
4. Get outside in safe environment
How Corporates Can be Fearless & Fast
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The misuse of the word “InnovaFon” -‐ The 3 I’s of Innova.on
• InnovaFon: Managing, measuring and communica8ng the value of innova8on is very
difficult; thus con8nual support and resources are difficult to a$ain
• InnovaFve: Customer Engagement: Lack of engaging customers and empowering
them to be innova8ve with your brand will cause lack of product market fit
• Innovators: What gets measured, is what gets done: Misaligned incen8ves, shared
project ownership, and lack of follow through kill stakeholder engagement
Why is InnovaFon so Sluggish and Difficult to Execute?
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The OODA Loop
Speed = Compe88ve Advantage
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● External incuba8on to test, validate, and scale transforma8ve innova8ons
● Take the best teams from the world’s leading organiza8ons on a fast track innova8on journey that teaches them to be intrepreneurs
● Focus on rapid prototyping, experimenta8on, customer valida8on and scaling
● De-‐risk and scale ideas so business units are keen to adopt
● Integrate into the IdeaScale’s end to end idea development plaoorm
Some Recommend SoluFons
Accelerate ExecuFon Work With Startups
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"In traditional innovation processes, companies did all the innovating themselves, and the lab was their world. In open innovation processes, startup ecosystems are a great resource to tap, making the world your lab!"
DR. HENRY CHESBROUGH Open Innovation Creator and Faculty Director Garwood Center for Corporate Innovation Haas School of Business, UC Berkeley
Why Incorporate Startups Into OI?
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~2000 startups crop up every day across the world. !
Over 147 Unicorns worth over $1B != 40% of the Fortune 500!
Nine out of ten startups will fail.!
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Get PLUGGED IN to the Startup Ecosystem!
Turn On Sonar!
Learn to Act Like A Startup !
Get Immersed w/ Startups!
Paint A Red Door!
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To Get Engaged, You Must First Be Easy to Engage!
Make it Easy!
Communicate Progress!
Welcome & Invite!
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Information is Power – You Need a Sonar !
Ideas!
Startups!
Trends!Blue Sky!
Left Field!
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• Focused process enables more cycles and faster execution
• Off-premise allows freedom of thought and new practices; safe from established corporate culture
• Business units adopt ideas more confidently once validated and scaled
• Employees are trained on innovation processes and gain experience working in an entrepreneurial environment
• Experience is integrated into the end to end innovation process
Key Takeaways
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How We Measure Ourselves
• Speed is a critical measure of success • Must be continuous, and not point-in-time innovation • Get outside your walls in an immersive ecosystem with others • Innovation is fun, but don’t “play” at it • Maintain a balanced portfolio that moves the needle
Must Truly Manage Innovation
QuesFons?
THANK YOU
180 Sansome Street San Francisco, CA
@RocketSpace
/RocketSpace Nick Davis 614.980.2771 [email protected] @_Nick_Davis
