The startup scene and corporate innovation activities are flourishing these days, and it feels similar to 1999 – at the height of the dot-com era. In the middle of the dot-com burst (summer of 2001), I was part of a team conducting a survey of corporate venture strategies of the top 100 companies in Norway.
It truly felt like a paradox at the time. We were in the middle of witnessing the dot-com bubble bursting, and here we were talking to key executives about what their future venture plans were. There surely were not many new ventures being planned at the time, and the tasks at hand were mainly focused around understanding how to best protect the business ideas and investments they already had, on a case by case basis.
That meant that each case had to get analyzed and followed up thoroughly, and that active ownership was the only way to rescue as much of the investments as possible. So, in one way, it was the perfect timing to ask them, because it is when you have to prioritize hard and really get involved that you most likely will identify the potential winners. And protect and nurture them with all you´ve got.
Corporate Venturing 2.0 looks much more promising than 1.0 if you take a closer look at some key differences:
- Consumer readiness: Most digital developments today are founded in the fact that consumers have already moved on to new digital platforms, and businesses are lagging behind. It was very much the other way around in the late nineties, as businesses were mostly eager to go digital – but consumers were not there yet.
- Technology maturity: We now have better infrastructure in place, and technology has become much more accessible (open source, cloud solutions, open APIs). We also have better data power and a lot more data to play with.
- Employee skill-set: There is substantial higher tech skill-set among more people today. Whereas there were really only engineers and some select few others that had a thorough and good technology understanding in the late nineties, we now have a larger pool of people with different skill-sets that also understand technology and what it can do. As a result, business units can contribute in a whole new dimension to corporate innovation and corporate venturing activities.
At the height of the dot-com era, the organization of corporate venturing activities were similar to what we see today. We had power coupling (startups being linked up with corporations and vice versa), incubators and accelerators run by corporations, and corporate venture teams were set up similar to what was seen at venture capital firms.
Just as companies are being inspired by startups and learning about Lean Startup methodologies to innovate products and services faster, some are talking about the economy already being in the post-lean era, where organizational and business developments are the real corporate innovations.
Thus, Corporate Venturing 2.0´s main difference to 1.0 may very well be that we are reinventing how we fundamentally perceive relations between industries & value chains, companies & business models and employees & organizational design.