Can corporates create start-ups? Innovation expert Kate O'Keeffe says yes.
In this webinar, Kate O'Keeffe, Partner & Director of Strategic Design at BCG Digital Ventures, joined MBS' Greg Harbidge and Caron Beaton-Wells to explore the question 'Can corporates create start-ups?'. Kate talks about what she learnt from creating corporate start-ups as Partner & Director of Strategic Design at BCG Digital Ventures in Sydney, leading Cisco’s Hyperinnovation Living Lab in the Silicon Valley for 10 years, and her own experience as an entrepreneur.
Watch below as Kate chats with senior MBS learning consultant Greg Harbidge, to discuss:
• How BCG Digital Ventures partners with corporates to create start-ups
• The decision-making process behind which start-ups get built
• The current opportunity for corporate venturing and innovation to create uplift for Australia.
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Your questions answered
In your view, what are the pros and cons of creating start-ups within corporates as opposed to acquiring external start-ups?
Corporates very rarely participate in seed stages of start up development. Creating your own start-ups or leveraging a corporation’s privileged assets is a way for corporations to participate in very early stages of start-up development in a way that would ordinarily be far too risky for them in an investment scenario. From what our statistics have shown us, the success rate of start-ups created in this way far outweighs the success rate of the average start-up in the marketplace. This certainly favors a start-up creation of your own as apposed to investing in an external start up. There are pros and cons of both. By the time you acquire a company it’s usually heavily de-risked and beginning to be successful in the marketplace. Having said that, as we know most acquisitions fail to create net value for the acquirer. There is a great conversation about risk in both cases. It depends on what your company’s appetite for risk is.
Kate O'Keeffe, Partner & Director of Strategic Design at BCG Digital Ventures
Does it have to be a new idea/market segment, or could it be combining fragment parts of the business to create a new venture?
"Creating a venture with Digital Ventures, whether its internal or external, always leverages corporate privilege assets. When Digital Ventures works with a company, we see it as a deep partnership where both parties are bringing their best assets to this venture for it to give us this advantage in the marketplace. We routinely create product/service offers in the core that are an extension of the core. We also look at opportunities like innovations that a corporation has created that could live a very different life outside of the corporation if taken to market a different way. Also, venturing in the core is a powerful way to create something new and leverage venturing talents in order to create something new and drive some new aspect to the consumer journey with your target market."
Kate O'Keeffe, Partner & Director of Strategic Design at BCG Digital Ventures
Re start-ups, how do you 'price' starting IP, particularly across multi-parties and provisioning execution investment - cash, 'corporate assets' or value-based?
"This links a little more to my days where my focus was on multi party innovation. To be honest there is no one rule, every deal was different, I wish there was a cookie cutter approach. Multi party approaches where folks are bringing different privileged assets and different IP is a very different opportunity. I will say, that I am keen to bring that sort of cohort wide innovation to the Australian market."
Kate O'Keeffe, Partner & Director of Strategic Design at BCG Digital Ventures
About our experts
PARTNER AND DIRECTOR STRATEGIC DESIGN, BCG
Prior to her role at BCG, Kate was the global leader of the Services Innovation Excellence Center at Cisco, where she was responsible for driving sustainable innovation capability for Cisco Services. She brings a wealth of experience in innovation and entrepreneurship to her role, where she drove new customer solutions within Cisco’s engineering organisation.
SENIOR LEARNING CONSULTANT
Greg works at the intersection of Leadership and Innovation to ensure Australian businesses adapt & grow. At Melbourne Business School he specialises in helping organisations take future focused and customer-centered approaches to their work. At home he spends his time chasing after toddlers.
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