“When we are no longer able to change a situation, we are challenged to change ourselves.” –Viktor Frankl
None of us would ever wish for the moment we’re living through. It’s not just about COVID-19 as a public health crisis. It’s about job loss, income inequality, and massive market disruption. It’s about a long overdue reckoning with racial inequity, including within the startup ecosystem. It’s about a climate crisis that is impacting every industry and every living thing on the planet.
As members of the innovation community, COVID-19 and the other challenges that we’re facing in this momentous year are a call to action. Innovation will play a central role in reshaping our society and the global economy. This is an opportunity to re-engineer how we work and cement the critical role that we play in our organizations and in the ecosystem. If we are to meet these challenges, it will require a new level of collaboration, new tools, and a new mindset.
A Look Back
How can we rise to meet this moment? I believe the answer starts with an honest look at how we have worked in the past and why we must do better. I spent 20 years as a VC in Silicon Valley and worked closely with dozens of corporate venture and innovation teams. I look back on how our community has operated, and I see behaviors in desperate need of change:
- Pattern matching: The startup ecosystem often operates as a star system where we look to influencers for social proof, which leads to over hyping a small number of companies while missing the diamonds in the rough. There is also a perception of a “fundable CEO” that reinforces racial and gender bias. When Black women have raised only .0006 percent of VC funding over the past decade something is very wrong in how our community judges talent.
- Tunnel vision: How we source deal flow has been overly dependent on serendipity, proximity, feeder relationships (e.g., accelerators, VCs), and personal connections. Most participants in the startup world have a limited view of the global ecosystem. Talented entrepreneurs and technologies with great promise are often missed and whither. There are sources of data on private companies that can help, but if we are going to innovate our way out of this pandemic and economic crisis, we clearly need a broader, more accessible landscape and better market intelligence.
- Wasted energy: Many of us who do the work of innovation know what it’s like to spend a lot of time running around to in-person meetings and events, often without results to show for our efforts. Let’s face it, it’s easier to hit activity metrics than it is to deliver outcomes. And all of that wasted energy is magnified when globally distributed teams struggle to coordinate their efforts. The result is a massive waste of time and money, too few people with seats at the table, and an inefficient process of matching solutions in the startup ecosystem with market needs.
- Flying blind: Given the amount of money that’s spent building startup ecosystems, most organizations have a surprising lack of data on what tactics and relationships are really working. This lack of insight is a significant obstacle to innovation. Where is the best deal flow coming from? Where are the emerging centers of excellence? Where is my internal process bogged down? Without easily accessible answers to these questions, it’s hard to fulfill the potential of the startup ecosystem to address the challenges that we face.
A Digitized Future
Innovation has always been a tough job. It’s now made tougher by travel restrictions, budget cuts and work-from-home. At the same time, innovation teams are being asked to do more with less — to navigate market disruptions and re-engineer products, services, and organizations to address pandemic-created needs. The adoption of digital tools will play a critical role in addressing these demands.
Digitizing the management of startup ecosystems is no more daunting than managing complex processes in sales, marketing, or supply chain automation. The difference is that those other business processes have benefited from digitization for decades.
To be consistently successful, enterprises need to develop a technology-driven process for sourcing innovation—an innovation supply chain. Instead of incremental, “one-off” innovations, digitizing the innovation function can deliver a systemic approach designed to bring solutions from the ecosystem to the market far faster. The results have the promise of fundamentally changing the impact of innovation teams through:
- Transparency: Multiple enterprise teams are often working with external partners to solve problems specific to a single initiative or business unit, resulting in siloed data and the loss of institutional knowledge. A central repository of solutions and use cases, along with a transparent process, can provide widespread access to the best available solutions and expertise. A more systematic discovery and evaluation of solutions can also be a first step to making certain that more entrepreneurs get seen, thereby helping to reduce geographic, gender and racial bias by broadening the view of the landscape.
- Time well spent: For teams working to scale innovation, the biggest hurdle is often managing the flow of conversations and data within an extensive network of partners — both internal and external. It’s hard to stay on top of what’s happening in the market while attempting to manage large numbers of active innovation projects. Getting thousands of touchpoints out of email inboxes and into a structured process allows innovation teams to step back from mundane, low-value tasks to focus on more strategic work of driving technology adoption, culture change, and market insight.
- Signal gathering: Innovation teams spend a significant portion of their workweek conducting market research and keeping current on what’s happening in their networks. Yet much of this data is fleeting and doesn’t get incorporated into a shared, strategic view of the market. The most successful enterprises are able to make data about market and customer trends, external partners, and emerging technologies easily consumable by internal stakeholders. The goal is to create intelligence that executives and business units can use to respond to market challenges faster and more effectively.
- Scalable networks: Innovation teams have always functioned as knowledge brokers and network nodes. But there’s a fine line between enabler and bottleneck. As the need for innovation grows and the pace of technology accelerates, innovation teams need to scale their relationships and collaborate with a growing universe of external partners and internal stakeholders. Efficiently managing these complex networks allows innovation teams to expand their reach and increases the likelihood of discovering valuable partners and more rapidly adopting new technologies.
An Optimist’s View
Innovation and entrepreneurship is all about solving problems. Most of us have chosen this work because we believe in the power of human ingenuity. We find joy in reaching solutions through collaboration with the smartest people we can find. We’re willing to do the hard work of change rather than accepting the status quo.
As an innovation community, we have never faced a more daunting set of problems to be solved. It’s easy to view them as overwhelming and disheartening. But I choose to view this moment as an opportunity to fulfill our promise. The challenges of a pandemic, economic crisis, climate change and racial equity will require a new level of collaboration, speed, and scale. Delivering solutions will demand the best work of passionate people around the world. It will require combining the inventiveness of the startup ecosystem with the creativity, market power, and resources of large enterprises. By working together with the right tools, the right partners, and an open mind, I’m optimistic that we’ll rise together to meet the challenge.