To understand what’s happening with innovation today, you need to look at the macro environment. For one, startup capital has become a commodity. There has been a proliferation of participants and groups willing to fund the next Facebook, Shopify or WealthSimple. We’ve been seeing an explosion in the number of VC firms worldwide of course, but also of angels, microfunds, accelerators, crowdfunding platforms, corporate VCs, private equity firms, alternative investment funds, hedge funds and so on.
Two, the pace at which our world adopts technology has reached breakneck speed. It took the telephone 75 years to reach 50 million users. Radio took 38 years. Television, 13 years. Even the Internet itself took 4 years to reach 50 million users. Facebook alone took only 3.5 years. Twitter, 9 months, Instagram, 6 months. And those annoying little Angry Birds? Well, Angry Birds reached 50 million users in 35 days. 35 days!!
Finally, the proliferation of new technology platforms is leaving large corporates scratching their heads and entrepreneurs are salivating at the opportunity to disrupt them. Hardly a month goes by without some sort of new disruptive technology or application peeking up its head: blockchain, AI, machine learning, AR, VR, IoT, Voice, and on, and on.
Each of these trends are inducing panic in large corporations and with their executives. They have a fear of disruption and getting left behind, and the data shows they have a lot to be worried about. According to Innosight & Standard & Poor’s data, the average company lifespan on the S&P 500 index has declined steadily from 35 years in the 1970’s to 20 years in the 1980’s, and sits at about 17 years today. It is projected that in the 2020’s, lifespan will drop to around 12 years. It’s not news to anyone that big corporations are under attack, and under attack like never before. But it’s not all bad!
These trends also provide unprecedented opportunity. HUGE opportunity for large corporates who can respond with true innovation. And HUGE opportunity for entrepreneurs and the people who fund them. But the trillion-dollar question is what will drive true innovation? What will insulate large corporates from disruption, and what will allow entrepreneurs and VCs to fully take advantage of these opportunities?
The solution… thinking and acting differently. Throughout history the best large companies and startups have weathered storms like this, and the status quo was and is never an option for survival. More than ever, thinking differently means thinking diversely: diversity of thought, diversity in models, and diversity of people. To truly respond to such global opportunities — and an investment environment ripe with competitors, capital, and new technologies — platforms, corporations, entrepreneurs, and investors must have diversity in their DNA. Diverse thinking also comes from a targeted strategy, this could be an investment firm’s focus on a given company stage (seed vs series A vs growth capital), sector (AI, Fintech, Blockchain etc.) or a given geography. There are many examples of diverse thinking and actions from corporations and startups around the world. Here are a few with diverse and successful venture investing models, people, and approaches.
1. TribalScale Venture Studios
TribalScale Venture Studios is not a venture fund — we are a platform. A platform that co-founds companies with entrepreneurs and Fortune 500 companies. We have no management fees or investment pacing rules, and we are committing 51% of the money from TribalScale — unlike typical VC fund managers that commit 2%. Studio is all about building digital companies — something executives and TribalScale customers ask for over and over again. We leverage the assets from our core business (the corporate insights, network, global distribution capabilities, experienced teams, and cash) to co-create disruptive startups with Fortune 500 companies. Our team is diverse — nearly 70% identify as a visible minority and ⅓ of our executive team is female — and we’re always looking to further represent and access the entire talent pool. Our diverse team is always made up of entrepreneurs, operators, and investors, plus the 160 people at TribalScale who work in everything from product management and technology, to marketing, sales, HR, and operations. Our diversity and unique platform allows us to best understand and respond to the unique challenges of both Fortune 500 companies and entrepreneurs.
Since February, the Venture Studios team has been hard at work vetting ideas, building and refining disruptive startups in the fintech and automotive/mobility sectors. Now, they’re ready to launch at TakeOver 2018. Each of these companies will be making their debut at TakeOver in front of an audience of over 800 global business executives and thought leaders. TakeOver itself is a conference with diversity at its core — check out our fresh, hands-on programming, which also includes an Innovation and CIO panel (where you can learn more about trends in VC, the need for innovation, and how to sustain this mindset).
2. Andreesen Horowitz
Andreesen is a Silicon-Valley based venture capital firm founded by two serial, successful entrepreneurs, Marc Andreesen and Ben Horowitz. In a few short years, they rose to become one of the most prominent VCs in the world — investing in Twitter, Pinterest, Slack, Facebook and Instacart. They brought a new model to market. They’re probably the best example of a trend in VC that leans toward platforms as opposed to funds. This model brings value to entrepreneurs beyond writing an investment cheque. They also bring non-investor type resources to the team. Sure, Andreesen Horowitz’ has the traditional VC types, but they also have real differentiation and diversity. They boast a range of domain experts and these people are all available to the portfolio companies Andreesen Horowitz’ invests in. So for every VC in the firm you get 3 operators! How’s that for an unfair advantage for their entrepreneurs?
iAngels focuses on investment opportunities in Israeli startups. Looking at the iAngels team, 13 of 18 are female at the fund management level. iAngels is truly adopting differentiation strategies.The thinking here is that a more diverse team will make better investment decisions, cast a wider net for potential investment opportunities and, ultimately have better deal flow and management practices. Maybe this is why Israel continues to be one of the top 3 startup places in the world?
4. One Way Ventures
One Way Ventures takes a diverse and specialized approach by focusing on exceptional immigrant entrepreneurs. Started by Semyon Dukach and Eveline Buchatskiy — who will be speaking at TakeOver on our panel that unpacks ‘work,’ and looks at the future of the workplace and business — One Way Ventures is on a mission to fund and support the talent and smarts of immigrants. Not only is there a moral imperative to supporting immigrant founders, but immigrants bring a level of grit to their business and have unique perspectives shaped by their experiences. Plus, 40% of Fortune 500 companies were founded by 1st or 2nd generation immigrants — they’re making big impact. Until One Way, no VC platform focused exclusively on immigrants and their children.
Last year I wrote an article on what investors in venture capital funds are looking for. I discussed that, of course, investors are looking for a track record of returns-success from a VC firm. But equally, they are looking for evidence that the VC firm has a diverse, and differentiated strategy that will continue to generate great returns. Diversity — diversity of thought, models and people — is the best answer for corporates, entrepreneurs, and investors to successfully innovate and grow. Without outside challenges, you won’t be able to test your ideas and assumptions, you will get stuck in your box, and you won’t be able to defend and push your project forwards. These innovative forces are the core of TribalScale Venture Studios and we’re harnessing them as they drive our world today.
Roger Chabra has more than 20 years of venture capital, operating and entrepreneurial experience. He currently leads TribalScale Venture Studios as Chief Innovation Officer.