My thesis was developed out of attending the Global Corporate Venturing Symposium and hearing Al Gore speak.
He challenged corporate venturers to a higher calling. Instead of following Silicon Valley venture capitalists for their deals, they could play to their strengths and create a better world as a result. Their strengths include longer time horizons and strategic alignments with a larger entity that can support the effort. These two elements could bring us the solutions needed for the largest challenges we face – climate change, poverty, sickness and poor education.
I have always been a change-the-world type of person. It is my belief that from even the most modest seat, a person can make a positive and potentially significant impact. And if one can, one should. It is through this lens that I participate in high-growth entrepreneurship – as an investor and as chief executive of a small global organisation committed to ensuring the success of women-led start-ups.
It is maybe because of this perspective that this year’s Global Corporate Venturing Symposium was a hit for me. It gathered my fellow industry colleagues for thoughtful conversation and complemented these conversations with a clear call to action from keynote speaker Al Gore. The combination of the conversations and the keynote got me thinking about the opportunity presented by the investment potential of those gathered.
This year’s symposium was marked by the dramatic increase in corporate venture arms – the number of corporate venturing firms has risen by about 30% to nearly 1,000 between 2010 and today. Clearly the opportunity to engage innovation at the early stage is front-of-mind for the vast majority of global corporations as they seek a means to remain competitive in today’s dynamic, diverse and global marketplace.
From my way of thinking, if ever there was an opportunity to carve a path for greater good, this was it. And I believe it is best articulated using the business imperatives by which these entities live and die – differentiation, innovation, strategic alignment.
Arguably the principal competitive advantages enjoyed by the globe’s corporate venture arms are twofold – longer time horizons and strategic alignments with a larger, global entity that can support innovation and effort. As I see it, these two advantages could bring us the solutions needed for the biggest challenges we currently face. The bigger, the tougher the problem, the greater the alignment with the imperatives of the global venture arm.
Imagine, if instead of following Sand Hill Road [in California, where many venture firms are located] for their deals, corporate venturers played to their strengths? What investments would we see result? What new technologies would come closer to market? What solutions for today’s, and tomorrow’s, challenges would we realise?
Let us first consider the advantage of longer time horizons.
Firms affiliated to corporate entities that have existed for 100 years – or even 30 years – will naturally see the world differently than a fund that has a life of seven to 10 years. For corporate entities that stand the test of time, the problems that once existed are no longer relevant – nor are the people who defined those problems. Knowing today’s customers’ needs and wants – that is one thing. Knowing tomorrow’s customers’ needs – when that customer has yet to be identified – is another perspective altogether.
It does not take a leap of faith to understand why innovations such as smart cities, cures for cancer and literacy programmes for the world’s undereducated would have a better chance when put up against the time horizons appreciated by the likes of IBM, founded in 1911, Merck, founded in 1889, and Pearson, founded 1844.
Second is the advantage of a large, global entity to support the investments made. This entity brings diversity that classic venture firms have never – nor could they ever in their current form – achieve. This diversity allows for fewer blind spots when it comes to investment decisions. It can bring in groups that classic venture firms struggle to bring in – did you know that less than 10% of classic venture capital goes to women and minority entrepreneurs?
Corporations have diversity of culture, gender, race and economic background at their fingertips if effectively harnessed for the potential to impact both investment decisions and growth by providing the expertise needed to get to market, serve the market and ultimately dominate a market. The opportunity as I see it is to the change the world. Consider this your call to action.