We Help People Bring the Future to Market We help our clients learn from, work with, and work like startups.
2 What would you say we do here? CONNECT STRATEGY & INNOVATION To deliver effective and timely solutions with real impact… Today We Will Discuss: How to Get From Inspiration to Execution
4 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
5 Innovation Done the Silicon Valley Way
6 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.
7 A Little History on the Valley
Tim Berners-Lee of Xerox creates CERN invents HTML Larry Page & The NASDAQ Palo Alto crashes and the Research Center Larry Ellison and demonstrates the Sergey Brin dot com bubble Apple launches the Google acquires (PARC) founds Oracle World-Wide-Web found Google bursts iPad Nest for $3.2B
William Shockley Apple launches Apple launches Apple debuts Marc Andreessen replaces Germanium Kleiner Perkins Peter Thiel, Max the iPod the iPhone with silicon as a ‘Lisa,’ the first PC creates the first opens on Sand with a Graphical browser for the Levchin, and Elon Facebook acquires semiconductor HP acquires Compaq Hill Road User Interface World Wide Web Musk found PayPal for $25B WhatsApp for$19B 1970 2000 2010 ‘ 56 ‘ 72 ‘ 77 ‘ 83 ‘ 93 ‘ 98 ‘ 01 ‘ 07 ‘ 14 ‘ 57 ‘ 71 ‘ 76 ‘ 84 ‘ 95 ‘ 97 ‘ 99 ‘ 02 ‘ 04 ‘ 06 ‘ 12 1953 1980 1990 IBM invents the Stanford Cisco Reed Hastings Google has 8 eBay acquires PayPal. Facebook sets ‘Floppy’ disk Elon Musk uses the Industrial Park founded founds Netflix employees record for largest Apple Inc. is money to found IPO in high-tech opens Blogger launches SpaceX. founded in history ($16B) Cupertino Microsoft launches 100 new internet Jack Dorsey Internet Explorer companies are founds Twitter listed on the stock Shockley ends silicon research. 8 exchange Mark Zuckerberg of his people leave to form Stanford student Fairchild Semiconductor, which founds Facebook Apple’s IPO becomes Jerry Yang Marc Benioff founds and relocates HQ to becomes the first “startup” to founds Yahoo receive venture funding the largest in history at Salesforce.com to bring Palo Alto $1.3B enterprise online
8 How the Valley Works - Ecosystem Overview
FUNDING GROWTH
ACCLERATORS VENTURE CAPITALISTS CORPORATES
CORPORATE PARTNERSHIPS M&A VENTURE ACCELERATORS
ACCELERATE STARTUP EXIT IPO
FAIL [it happens. a lot.]
9 The Players: Startups
IDEA EARLY STAGE GROWTH STAGE MATURE
KEEP SCALING BUILD prototype LAUNCH product DISTRIBUTE product SCALE IPO Explore idea Test features Build user base Team Get co-founder(s) Get feedback Build business model User Base SERIES C+ [ or other exit ] SERIES B $20M+
$10M - $30M FUNDING AMOUNT SERIES A
SEED $1M - $15M IDEA BOOTSTRAP $250K - $2M
9 – 18 months FUNDING 2 – 8 years STAGE
S a n d H i l l R d FOUNDERS, ANGEL TRADITIONAL VENTURE FRIENDS & FAMILY INVESTORS CAPITAL
10 The Players: Accelerators
WHAT IS AN ACCELERATOR? Most accelerator programs culminate in a Demo Day, where investors get a Accelerator programs are designed to help startups chance to preview the graduating get from idea to product and become more attractive companies. to investors. YCombinator’s demo day attracts over 450 premier investors as well as tech- obsessed celebrities like Ashton Kutcher.
THE ACCELERATOR PROCESS
DEMO ACCELERATOR PROGRAM DAY { 3 – 6 months } THE FOUNDER HAS: THE ACCELERATOR PROVIDES: THE STARTUP LEAVES WITH: • an idea or partially • seed investment ($25 – 50K) • a minimum viable product developed product • mentorship and support • a strong network • legal foundation for the company • the accelerator’s name • accelerated development timeline
11 The Players: Corporations
CORPORATE INNOVATION TEAMS CORPORATE ACCELERATORS These are internal teams tasked with driving innovation Corporate accelerators are designed to align a cohort of throughout an organization. Often they establish a presence in startups with the corporate’s strategic objectives. The Silicon Valley to be closer to both startups and larger company often partners with or even acquires the startups after innovators like Google. the program. Typically these programs are run by a 3rd party like RocketSpace, who have the expertise to run a successful accelerator.
INNOVATION LABS Some corporations develop “labs” that operate almost like an internal startup. These R&D centers practice rapid prototyping CORPORATE VENTURE FUNDS and agile development to launch new digital products for the Corporate venture arms generally invest in startups in the organization. corporate parent’s industry (a notable exception is Google Ventures, which is run for financial objectives rather than for finding startups compatible with Google).
12 A New World Order
13 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
14 15 Corporations Need to Wake Up!!!!
h p://thefuturesagency.com/tag/disrup on/ 16 Consider This…
In Some Cases, The Average Time it Takes Straw poll, the Average Time it Takes a a New Widely Disrup ve Technology to Company to bring a New Product to be Adopted by 50 Million Users in 2015 = Market = 2-3 years 45-60 days
The effects of the autonomous car And when they do make it to market the numbers in most movement will be staggering. PwC predicts cases are: “Less than 3% of that the number of vehicles on the road new consumer package will be reduced by 99%, es ma ng that goods exceed first year sales the fleet will fall from 245 million to just of $50 Million” 2.4 million vehicles.
h ps://hbr.org/2011/04/why-most-product-launches-fail
http://sanfrancisco.cbslocal.com/2015/01/27/how-ubers-autonomous-cars-will-destroy-10- 17 million-jobs-and-reshape-the-economy-by-2025-lyft-google-zack-kanter/ 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/
18 According to a survey that Inc. 500 did with CEO’s in 2015, these are the 5 industries most ripe for disrup on.
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!
19 Does Disruption Impact All Products?
20 Make It Real…Business Models Destoyed
The Old Way - Kodak: - Introduced their version of the digital camera in the Focus Point: mid 1970’s As John Chambers, - Didn’t go bankrupt until 2012 Chairman of CISCO, - Took 37 years for the disruptive technology to push said, “Speed of them out of the market Disrup on is the key The New Economy - Blockbuster: Measure of Innova on, and Why - Netflix launched in 2007 we all Need to Plan - Blockbuster files for bankruptcy in 2010 Now.” - Took only 3-years for the technology to be adopted and destroy their business model
21 Speed is Speeding Up at a Faster Pace
Forbes—”WhatsApp gained more followers in its first six years than Chris anity did in its first 19 centuries.”
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/
22 McKinsey & Co 23 The Signs Are Everywhere
Is your company on the le or the right?
Market Cap. Market Cap. $22 Billion $27 Billion Founded 2008 Founded 1919
Market Cap. Market Cap. $1.7 Billion $186 Billion Founded 2011 Founded 1837
Market Cap. $180 Million Market Cap. Founded 1914 $46 Billion Founded 2011
24 The Good News?
Guess Whose Job It Is to Solve For This Problem? Ours!
25 What is Corporate Innova on Management? Answer: Corporate innova on The profitable implementa on of (crea ve?) ideas management is a ‘Fast and’ structured process of devising and developing an idea into a viable concept, followed by turning that concept into reality and implemen ng it as a product, service or process improvement. Corporate Innovation Management
Where the Buzz Words Even Have Buzz Words
Customer Rapid Field Design Prototyping Research Thinking Crowd- Open sourcing Innova on Commercialize
Incuba on
Co- Agile & Crea on Idea on Lean Corporate VC
28 Why is innova ng quickly so important?
29 Innovation 1.0
No customer insights, and extremely slow and expensive
30 Innovation 2.0
Externally Focused, but Execution is Still Very Difficult and Slow
Flip to Business Unit
Strategy Idea on Incuba on Launch
31 Getting a New Idea to Market is Tough
32 Typical Idea Development Paths
Path of Idea Challenge
1) Hand over disrup ve ideas to BU Rejected, too risky, not core
2) Develop as side project un l validated Likely to be distracted by day to day, slow
3) Incubate by internal innova on group Hard to scale, product pipeline rejects
4) Employ outside firm to validate idea Learning and experience not captured
33 Moving From Idea on to Execu on
34 The Approach – Corporate Innovation at the Speed of Startups Innovation 3.0
LEARN EXPERIMENT LAUNCH
Pilot Partner
Architect Discover Strategize
Prototype Scale
Speed
35 Food For Thought
36 How Corporates Can be Fearless & Fast
1. Innova on 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
37 Why is Innova on so Sluggish and Difficult to Execute?
The misuse of the word “Innova on” - The 3 I’s of Innova on
• Innova on: Managing, measuring and communica ng the value of innova on is very
difficult; thus con nual support and resources are difficult to a ain
• Innova ve: Customer Engagement: Lack of engaging customers and empowering
them to be innova ve with your brand will cause lack of product market fit
• Innovators: What gets measured, is what gets done: Misaligned incen ves, shared
project ownership, and lack of follow through kill stakeholder engagement
38 The OODA Loop
Speed = Compe ve Advantage
39 Some Recommend Solu ons
● External incuba on to test, validate, and scale transforma ve innova ons ● Take the best teams from the world’s leading organiza ons on a fast track innova on journey that teaches them to be intrepreneurs ● Focus on rapid prototyping, experimenta on, customer valida on and scaling ● De-risk and scale ideas so business units are keen to adopt ● Integrate into the IdeaScale’s end to end idea development pla orm
40 Accelerate Execu on Work With Startups Why Incorporate Startups Into OI?
"In traditional innovation processes, DR. HENRY CHESBROUGH Open Innovation Creator and Faculty Director companies did all the innovating Garwood Center for Corporate Innovation themselves, and the lab was their Haas School of Business, UC Berkeley world. In open innovation processes, startup ecosystems are a great resource to tap, making the world your lab!"
42 ~2000 startups crop up every day across the world. !
Nine out of ten startups will fail.!
Over 147 Unicorns worth over $1B ! = 40% of the Fortune 500!
43 Get PLUGGED IN to the Startup Ecosystem!
Get Immersed w/ Startups!
Learn to Act Like A Startup !
Paint A Red Door!
Turn On Sonar!
44 To Get Engaged, You Must First Be Easy to Engage!
Welcome & Invite!
Make it Easy!
Communicate Progress!
45 Information is Power – You Need a Sonar !
Startups!
Ideas! Trends! Blue Sky! Left Field!
46 Key Takeaways
• 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
47 How We Measure Ourselves
Must Truly Manage Innovation • 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
48 Ques ons? THANK YOU
/RocketSpace Nick Davis 614.980.2771 [email protected] @RocketSpace @_Nick_Davis
180 Sansome Street San Francisco, CA