“I pitched my boss the idea, he pitched his boss and so on. Eighteen months later, the strategic innovation portfolio was publicly announced.”
Eric Steager, director of corporate development and innovation and managing director of strategic innovation portfolio at Independence Blue Cross (IBC), a healthcare licensee of the Blue Cross Blue Shield Association, outside of Philadelphia, had a background is in venture capital, with almost eight years of experience in it, but joined IBC in an acquisitions capacity.
Although John Banta, managing director of Blue Cross Blue Shield Venture Partners, which involve 31 of the 36 plans in the association, said Steager had been a “terrific collaborator” over the past four years, it was this path of manager buy-in that has been his biggest success with the team so far.
Steager said: “Our unit is relatively young so while we have not backed a unicorn yet, as I look back upon our efforts in driving both strategic and financial returns for the organisation, there are multiple successes to point too. Yet, in my mind, the fact we were able to assist a 75-year-old health insurance company in recognising the benefits of partnering the early-stage ecosystem beyond simply that of pilot or vendor contract is significant and clearly a key success for the group.
“The symbiotic relationship between what a large company can bring to a startup in terms of guidance and resources is critical, but equally critical is having those within a large company understand their counterparts needs at the startup. The ability to mentor, coach and connect in addition to the inherent and intrinsic benefits of watching these startups grow and flourish are certainly the positive aspects of the role.”
However, challenges abound. Steager said: “In addition to all of the typical big company challenges around misalignment of priorities – it is really important to the startups living the relationship but only one of 20 priorities of the strategic business unit champion – the health insurance industry in the US has been subject to a number of external headwinds, challenges and uncertainties.
“These headwinds make the normal course of corporate venture investing even more complex and methodical. That said, where there is crisis there is opportunity. So. given this difficult environment with its ever increasing regulatory and financial uncertainties and challenges, our CVC group has the continued opportunity to add value by bringing the strategic insights, new business model innovations and perspectives gained by our efforts to the executive leadership so they can be more effectively prepared and able to deal with them.
“However, as an industry we still continue to be too internally focused versus our brethren in traditional or institutional venture capital. While I think most of the bad habits and stereotypes of CVC have gone by the wayside as a practical matter, there is still many outside of our industry that have antiquated perceptions of our efforts.
“Therefore, taking the time to look outside of our respective organisations for opportunities to collaborate with traditional VCs, or highlight our industry at events like SHIFT and the Global Corporate Venturing & Innovation Summit are welcome and necessary for our continued mutual success. Venture capital is, as Silicon Valley will loudly tell you, is a relationship game and you cannot make those relationships and bring value to your organisation by focusing inward on the corporate dynamics and politics.”
After consulting in the late 1990s, Steager spent the 2000s in venture capital and private equity, initially with Banc One Capital Markets, then Ankaa Capital Partners, Safeguard Scientifics and GPX Enterprises.
Steager said work and family life with his wife and two kids limited his spare time beyond teaching venture capital financing and corporate finance at Drexel University and being on the board of a pediatric cancer charity GetWellGabby Foundation.