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Red Garage Ventures - Corporate Innovation framework

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These slides present a possible innovation framework for Corporates consider and highlights where each innovation efforts live. It covers Incremental innovation, Transformation innovation through to Open Innovation and defining Growth Agenda.

It also covers the 3 horizons. Horizon 1 is focused on optimizing the existing business via incremental innovation (i.e. better systems, process, products etc), and Horizon 2 is focused leveraging the business model into new areas as it has a competitive advantage (i.e. Amazon leveraging its online retail business model and moving to the physical world with Amazon Go) and Horizon 3 is about exploring and creating a new business model (think Google and Google car and now called https://waymo.com/ - separate company, new business model.

Also reviews what is the difference between an Incubator vs Accelerator from a Business Model point of view.

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Red Garage Ventures - Corporate Innovation framework

  1. 1. Innovation framework Franki Chamaki Red Garage Ventures
  2. 2. Source IP only, IP and Talent or talent only? Classified – Confidential - Page 2 Supported by internal/external communication (e.g. Newsletter, annual innovation festival, internal dashboard) Governance (e.g. set up a cross-functional “Innovation Board” to drive innovation internally) Internal & offline Team brainstorm sessions (eg inventium.com.au) Internal & online Internal crowdsourcing platform (e.g.brightidea.com) External & offline Acquire early start-up venture (new IP) Engage “innovation” external firms (ie Design Thinking) External & online Run hackathon (e.g. GE Industrial Hackathon) Set up internal Design thinking teams (e.g. AMP, Westpac) Scout new IP (eg prescouter.com) Sponsor third party R&D (i.e. University) External hosted crowd sourcing hosted externally for (e.g. edisonnation.com, kaggle.com , openideo.com, innocentive.com ) Internal hackathon (eg atlassian fedex days) Framed Problem Within Focus Area(s) Define Focus Area(s) within Growth Agenda Know Growth Agenda (Opportunities & Adjacencies) Incremental innovation to Transformation innovation Hosted internally crowdsource for externa (e.g. pgconnectdevelop.com ) CORPORATE INNOVATION FRAMEWORK
  3. 3. Source IP only, IP and Talent or talent only? Classified – Confidential - Page 3 Supported by internal/external communication (e.g. Newsletter, annual innovation festival, internal dashboard) Governance (e.g. set up a cross-functional “Innovation Board” to drive innovation internally) Internal & offline Team brainstorm sessions (eg inventium.com.au) Internal & online Internal crowdsourcing platform (e.g.brightidea.com) External & offline Acquire early start-up venture (new IP) Engage “innovation” external firms (ie Design Thinking) External & online Run hackathon (e.g. GE Industrial Hackathon) Set up internal Design thinking teams (e.g. AMP, Westpac) Scout new IP (eg prescouter.com) Sponsor third party R&D (i.e. University) External hosted crowd sourcing hosted externally for (e.g. edisonnation.com, kaggle.com , openideo.com, innocentive.com ) Internal hackathon (eg atlassian fedex days) Framed Problem Within Focus Area(s) Define Focus Area(s) within Growth Agenda Know Growth Agenda (Opportunities & Adjacencies) Incremental innovation to Transformation innovation Hosted internally crowdsource for externa (e.g. pgconnectdevelop.com ) 70% Horizon 1 Optimizing existing business model 20% Horizon 2 Leverage existing business model in new fields (and create a competitive advantage) 10% Horizon 3 Explore a new business model CORPORATE INNOVATION FRAMEWORK & 3 HORIZONS
  4. 4. Source IP only, IP and Talent or talent only? Classified – Confidential - Page 4 Supported by internal/external communication (e.g. Newsletter, annual innovation festival, internal dashboard) Internal & offline Team brainstorm sessions (eg inventium.com.au) Internal & online Internal crowdsourcing platform (e.g.brightidea.com) External & offline Acquire early start-up venture (new IP) Engage “innovation” external firms (ie Design Thinking) External & online Run hackathon (e.g. GE Industrial Hackathon) Set up internal Design thinking teams (e.g. AMP, Westpac) Scout new IP (eg prescouter.com) Sponsor third party R&D (i.e. University) External hosted crowd sourcing hosted externally for (e.g. kaggle.com , openideo.com, innocentive.com ) Internal hackathon (eg atlassian fedex days) Framed Problem Within Focus Area(s) Define Focus Area(s) within Growth Agenda Know Growth Agenda (Opportunities & Adjacencies) Incremental innovation to Transformation innovation Hosted internally Crowdsourcing for external (e.g. pgconnectdevelop.com ) Considerations • As Henry Chesbrough (who coined Open Innovation) in his 2003 book "Open innovation: The new imperative for creating and profiting from technology" argues companies cannot remain competitive with centralized, internal, R&D processes. • He believes that companies can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. • This is the essence of RGV's Innovation framework Governance (e.g. set up a cross-functional “Innovation Board” to drive innovation internally) CORPORATE INNOVATION FRAMEWORK
  5. 5. Source IP only, IP and Talent or talent only? Classified – Confidential - Page 5 Supported by internal/external communication (e.g. Newsletter, annual innovation festival, internal dashboard) Internal & offline Team brainstorm sessions (eg inventium.com.au) Internal & online Internal crowdsourcing platform (e.g.brightidea.com) External & offline Acquire early start-up venture (new IP) Engage “innovation” external firms (ie Design Thinking) External & online Run hackathon (e.g. GE Industrial Hackathon) Set up internal Design thinking teams (e.g. AMP, Westpac) Scout new IP (eg prescouter.com) Sponsor third party R&D (i.e. University) External hosted crowd sourcing hosted externally for (e.g. kaggle.com , openideo.com, innocentive.com ) Internal hackathon (eg atlassian fedex days) Framed Problem Within Focus Area(s) Define Focus Area(s) within Growth Agenda Know Growth Agenda (Opportunities & Adjacencies) Incremental innovation to Transformation innovation Hosted internally Crowdsourcing for external (e.g. pgconnectdevelop.com ) Considerations 1. What's the problem? Need to have a 100% clear problem area. Circular Economy is too board. Need to be specific and start with "How might we...." solve xxx. Apply Design Thinking and have the participants immerse in the problem. 2. How are you going to communicate: We need to communicate the problem along to the right groups and to help them understand what you like to be solved. We need to communicate objective of the hackathon (ie just sources ideas vs funding a startup), explain the judging criteria, explain IP treatment. This is an ongoing process which include pre, during and post event 3. How are you going to support the event? Need to have both right mix of Subject Matter Experts (ie Circular Economy experts in the define problem area) as well as "startup" folks supporting the team during the event and to facilitate and ensure they keep true to the problem at hand. They also help ensure they apply a "lean startup" thinking to quickly test and validate ideas. 4. How are you going to reward the winner(s)? What will the winners get? Access to funds, access to scale partner? Access to incubation services? All? 5. How are you going treat IP? Typically participants "own" the IP but have the option to sell % to get funding to grow 6. What happens after the event? How are you going nurture and incubate? Need to have a clearly defined "incubation" approach (erg first 3 month is business model validation, secure first customer, scale etc) 7. Clear judging criteria - communicate how you are going to judge. In ours we had: 1. 25% - Innovation - show us how different unique your idea is! 2. 25% - Execution - show us a prototype/demo/mock up! 3. 25% - Customer Validation - show us you can secure a customer! 4. 25% - Use of asset - show us how you leverage Coke asset/waste in your idea Governance (e.g. set up a cross-functional “Innovation Board” to drive innovation internally) CORPORATE INNOVATION FRAMEWORK
  6. 6. Classified – Confidential - Page 6 Criteria Framed Problem Within Focus Area(s) RED GARAGE VENTURES HACKATHON PARTER ASSESSMENT 1. Clear structured event approach (i.e. help define problem, education night, marketing of event, reach participants, during event) 2. Good access to communities (i.e. universities, startup and domain expertise) 3. Clear marketing resources for pre, during and post approach 4. Pre event problem or asset immersion (i.e. education/training night) 5. Clear judging panel recruitment process 6. Clear judging idea criteria process 7. Clear post event approach (i.e. incubation, communication) 8. Physical space engaging, access to resources (i.e. wifi), transport 9. Within budget 10.Unique selling point (make event fun, have in-hack workshops e.g. how to create mvp, how to validate ideas, how pitch, how to set up a shareholders agreement)
  7. 7. Source IP only, IP and Talent or talent only? Classified – Confidential - Page 7 Supported by internal/external communication (e.g. Newsletter, annual innovation festival, internal dashboard) Internal & offline Team brainstorm sessions (eg inventium.com.au) Internal & online Internal crowdsourcing platform (e.g.brightidea.com) External & offline Acquire early start-up venture (new IP) Engage “innovation” external firms (ie Design Thinking) External & online Run hackathon (e.g. GE Industrial Hackathon) Set up internal Design thinking teams (e.g. AMP, Westpac) Scout new IP (eg prescouter.com) Sponsor third party R&D (i.e. University) External hosted crowd sourcing hosted externally for (e.g. kaggle.com , openideo.com, innocentive.com ) Internal hackathon (eg atlassian fedex days) Framed Problem Within Focus Area(s) Define Focus Area(s) within Growth Agenda Know Growth Agenda (Opportunities & Adjacencies) Incremental innovation to Transformation innovation Hosted internally Crowdsourcing for external (e.g. pgconnectdevelop.com ) Integration morals Source: https://timreview.ca/article/490 1. “Cross-Leverage” model: leaves the acquisition as a separate business unit, but merges the technology and people into the main company. Pro: operates as a separate "product line" but uses company's shared assets (i.e. marketing, R&D, distribution). Con: time lag to get things done as it now depended on shared resources 1. “New Bet” model turns an acquisition into a new, standalone business unit within the company to pursue a new market segment. Pro: standalone allow for full independence but leverages brand, customer base, and distribution assets 1. “Top Up” model breaks up the acquired entity into portfolio elements and consolidates it into the acquiring company. Pro: allows for full company integration quicker, filling gaps and more organic (reduce company shock). Con: May not take advantage of startups' IP to full potential as its watered down. 1. “Double Down” model consolidates both companies’ assets into the acquired company. Pro: works well if the startup's market distribution, brand, customer base, and leadership team are more effective. Pro: company cultural on both sides needs to be managed. Governance (e.g. set up a cross-functional “Innovation Board” to drive innovation internally) CORPORATE INNOVATION FRAMEWORK
  8. 8. Incubate Pitch Accelerate CORPORATE INCUBATION APPROACH Moving an idea into a new business model
  9. 9. Moving idea into a new business model Incubate Pitch Accelerate ● Lean startup principles ○ Business model validation ● Working infrastructure ○ Internal Job forum allowing staff to join the startup for short assignments, good for fostering corporate innovation cultural ○ External on-demand employees like upwork vs. freelancer vs. fiverr vs. guru site sub site ● Mentor network ● Business model validation ● Funding & reporting governance ○ Quarterly reporting and funding request (i.e. list assumptions to test, and how and when) ● Customer traction. Focus is Product/Market fit ● Articulate the problem, value proposition, plan to scale, why to “back” this team/idea. ● Define the team and founders ● Key milestone, return and fund/ resources required ● SAFE Note - no-loan funding with % rights at raising time on based on funds injected and valuation ● Convertible Note - funding loan with equity rights/terms ● Collaboration Deed - fully funded, wages etc own IP but specific options to commercialize ● Business loan/Private investors/bootstrapping CORPORATE INCUBATION APPROACH
  10. 10. Incubator or. Accelerator? CORPORATE INCUBATION APPROACH Incubator key focus: “product/market fit”. Its aim is to validate, through experimentation, that the unique value proposition addresses a customer segment(s) and their problem An Incubator’s purpose is about ensuring Value Proposition and Customer Segment are validated (e.g. find product/market fit) This means giving it the right resources (i.e. funds, freedom) and mentor/network support to explore the problem area within a set time frame to find the product/market fit Incubation Incubating an idea is like Incubating an egg – you need to ensure you have the right temperature (i.e. sufficient money), humidity (i.e. spend cadence) , turning the egg (i.e. validating the ideas) and environment (i.e. mentor network, office space/ resources)
  11. 11. Incubating to accelerating CORPORATE INCUBATION APPROACH Hatching key focus: “Reach more people”. Its aim is find resources (ie money/team or both) to continue growing the customer base and proving “traction” Once product/market fit has been established, its time to “nurture” its growth. One avenue to access funds (or/and team) and structured program is through VCs, Accelerator or Private (return for equity) to drive growth A pitch is your reason to “scale up”. Its how you going to Channel or “distribute” your solution to reach more customers. A pitch therefore is a plan on how you going to exploit the Customer Segment with your validated Value Proposition. Learn more about Pitching here Hatching out This is the stage where you have validated product/market fit and need funds/ a team to scale your idea by “pitching” your idea for funds at a VC, angel investor, an internal or external accelerator, corporate growth board etc.
  12. 12. Incubating to accelerating CORPORATE INCUBATION APPROACH This assumes your business model’s most critical assumptions have, to large extend, being proven. You have demonstrated a clear product/market fit and have shown (repeatability) customer traction This is about validating other aspect of your business model – including pricing model, formalizing partnerships, building repeatable process Accelerating A structured approach to accelerate the “testing” of the other business model assumptions Accelerating key focus: “Validating other area”. Its aim is continue to validate other important assumptions of your business model

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