Introduce yourself.
I run Sky’s corporate venturing company – referred to internally as the Sky startup investments and partnerships team. My background is in commercial and business development in the telecoms, media and high-tech sectors, including a stint in consulting. More recently I have focused on strategic partnerships and long-term corporate development before taking on our startup partnership and investment work.
Our mission at Sky is to partner startups for three simple reasons – accelerate innovation, find new growth and identify efficiency opportunities. We do this through a hybrid of commercial partnerships and minority investing. We do this because we believe that the startup ecosystem represents a unique pool of disruptive people, ideas and technologies that we are keen to tap into as a corporate who is always look at what is next, and how to be better.
What technologies, business models and areas are you looking for?
Our thesis is built around three disruptive strategic themes aligned to our core strategy, that are affecting us and the wider market, creating both risks and opportunities.
The first is disruptive online TV. We are looking ahead into whatever has the potential to change our existing TV businesses, be that new models and approaches, new content or platforms. Here we see an opportunity to continue to disrupt ourselves as we grow and evolve;
The second is the move to digitally and mobile native behaviour and activity across all our customer touchpoints, a big focus here being ad-tech, marketing tech and analytics that can make sure every interaction between Sky and our customers is as good and valuable as it can be for both of us;
The third theme is around big data and artificial intelligence (AI). We are working to transform ourselves into the world’s most data-focused media business, leveraging data to drive better products, decisions and operations – and we believe that startups will play an invaluable part in helping us along that technology journey, especially in the areas of AI and machine learning.
Outline the processes you use for engaging with the startups.
We source dealflow directly and organically through networking and proactive scouting. There is no substitute for wearing out the shoe leather. We do have a budget, but I cannot comment on the annual allocations as that is confidential.
In terms of our engagement strategy, we first focus on deriving value by working with startups to identify trends and opportunities early, gain insight and learning through partnering startups commercially. We then overlay the ability to invest where there is a clear strategy benefit, such as:
- Giving us early access to insight or technology.
- Prioritising our requirements.
- Accelerate innovation at Sky, especially a new product or service.
- Give us access to a growth opportunity, whether through collaboration or acquisition.
When it is the right thing to do, investment opens up the opportunity for a much more strategic relationship and greater insight – being on the inside is different from just buying services or licensing content, for example.
What do you offer startups and partners?
Sky is a strategic investor. We can help creating mutually beneficial partnerships with startups. We have a track record of creating commercial opportunities that add to valuations and supporting good financial outcomes. We pitch into startups and lead financial investors. We are Europe’s largest entertainment company, bringing credibility and scale.
Startups can leverage Sky expertise:
- As a tier-1 strategic commercial partner and case study.
- To help define strategic direction in our areas of expertise – content, media, communications, monetisation.
- As a route into UK and EU markets and beyond.
- As a vertically integrated route to scale customer rollouts in Europe.
- For access to content and talent.
Do you look to sit on the boards of the businesses in which you invest?
We have a minimum requirement to have board observers on all of our investments. We avoid board directorships as a rule to avoid fiduciary duty conflicts. We provide committed observers recognised as experts in their industries and have an excellent track record of follow-on investments and supporting successful exits.
Give us some examples of ventures in which you have invested?
Examples include Roku, which is the leading streaming platform for delivering video, music and casual games to the TV. Roku launched its first TV streaming player in 2008, and today streams hundreds of entertainment channels to millions of customers.
Fubo is an over-the-top sports rights subscription platform. It is a consumer-facing sports video platform that bundles live sports networks and channels currently operating across US and Latin America.
Drone Racing League is an eSports company focused on drone racing, where they design and build custom drones, host, film and produce professional racing events for elite pilots, and distribute this content to third-party digital platforms such as Twitch and YouTube.
An example of an investment and exit is Elemental. At the time of Sky’s investment in December 2014, Elemental Technologies was a software company specialising in multiscreen video delivery, enabling broadcasters and pay TV operators to stream live and on-demand content to laptops, tablets, smartphones and TVs. In September 2015, Elemental was acquired by Amazon Web Services.
Describe who is responsible for your function in Sky, who is in the team and who you interact with in the core business.
It is a dedicated team with a presence in San Francisco, representation in New York and most of team, including the investment team, in London. The London team covers the rest of Europe – hotspots like Stockholm, Berlin and Paris – and Israel.
We have found it crucial having a dedicated team, but equally crucial most of them are long-term Sky employees. Sstakeholder buy-in for strategic CVCs is the number-one priority and this can be very hard for someone without the internal network and personal relationships.
Even though we are a purely strategic investor, for our deal origination activity and people management approach we have found it most effective to structure ourselves similar to a fund in terms of people and pipeline process – right down to weekly inbound review meetings and investment committees and using a number of online collaboration tools in common with the VC industry.
Leading CVCs that I am working with are now seeing that they should be connecting different technologies, startups and new business models to create what I term innovative new value chains. In your industry there must be disruptive innovation, but how do you get the core business to engage?
It is definitely something I also see as a challenge. We address it by driving buy-in, engagement and advocacy with key internal stakeholders at a number of levels, but starting with the leadership team with whom we work closely to set out the vision and identify exactly those innovative new value chains. Furthermore we work very closely with the strategy and corporate development teams, have senior leaders who are champions in each of the disruptive areas, and our board observers are business leaders and functional experts, bringing insight and learning back into their core business areas.
How do you report and demonstrate your strategic and financial performance?
We have some fairly standard regular financial reporting that we use with our chief financial officer. But our focus is on delivering and demonstrating the strategic benefits and value. We do this through regular formal and informal engagement, including regular written executive briefings and summaries, C-level sessions with the team and board observers, and thematic insight summits and strategy paper.s
When you are not venturing what do you do to relax?
I love my family time – it is my main focus outside of work. When I get some additional time to myself I am a board-sports fanatic, snowboarding in the winter and wakeboarding or wakesurfing in the summer.
To listen to this and other interviews on a podcast, subscribe at gaulesqt.podomatic.com. Andrew Gaule leads the GCV Academy, developing the capabilities and expertise of organisations leading open innovation, venturing and corporate venturing programs to drive strategic benefit. He also supports innovation programs and collaborations with “innovative new value chains” in global organisations. To contact Andrew Gaule and for future interview ideas email andrew.gaule@aimava.com or James Mawson at jmawson@globalcorporateventuring.com