Discuss how corporate ventures choose their tools (pick an industry to research)

Question

Discuss how corporate ventures choose their tools (pick an industry to research).

How are corporations using Innovation Labs to stimulate creativity and innovation in their businesses? Research one company to learn about their innovation lab strategies, how their innovation labs function, and their product, service and/or process priorities.

Where are CVC groups located in US corporations? Research one company to: identify where each CVC group reports in an organization, CVC investment priorities, companies in which they have invested.

Explanation / Answer

Part 1: Discuss how corporate ventures choose their tools (pick an industry to research).

As per research study, it is being found out that corporate ventures have been growing in a double-fold manner and it is making it a clear path for CVC investments to grow faster. Corporate Ventures consists of three main tools which exhibit the complete picture of Corporate Venturing:
1. Corporate Venturing Capital (CVC)
2. Accelerators & Incubators
3. Innovation Labs

In simple terms, in CVC, corporations use direct equity investments to target startups of strategic interest. Investing firm provides management and business functioning expertise and in return gain a specific advantage. In recent times, smart mobility is one those niche industries which are getting a lot of attention from CVC leaders, for example, Lyft got CVC investment from CVC leaders like CapitalG( initially Google Capital) and General Motors.

Next comes, Accelerator or Incubator, which is the best alternative to CVC. Basic terms of such investment revolve around the idea of short-term support to the growing startups. Accelerator offers cut-to-perfect structured programs to the leaders of the startup firm, which would help them to understand the market situation and gain expertise to push their product development and time to market strategies. On the other hand, Incubators is more about long-term mentoring and coaching which enable the firms to get into the market with proven product/service offering backed up on-place business models. In case of an example of either, Mercedes Benz backed accelerator has decided to invest in Lucep, which offers a consumer-behaviour buying process for the enterprises. Lucep will be working on the project that can be used by MB for their test and research purposes.

The latest trend in a CV system is Innovation Labs which functions like a startup or niche entity within a corporate setting provided by the parent company. In-house innovators being brought together for short projects which are targeted to bring up the prototypes of new products and services which allows the parent company to perform the market testing at a minimum viable risk. Taking an example of VW Automotive Innovation Lab, which consists of interdisciplinary teams across expertise in various industries. VAIL is situated at Standford University's campus and kicked off some amazing projects like Drive-by-Wire, Driving Assistance System & Solar Car Project.

Part 2: How are corporations using Innovation Labs to stimulate creativity and innovation in their businesses? Research one company to learn about their innovation lab strategies, how their innovation labs function, and their product, service and/or process priorities.

Innovation Labs are heavily about the experience of the team along with the vastness of areas and combination of the team's age group is also taken into consideration. The best example to state here is of Yandex, Russia's Google, which started its innovation lab in 2008 aiming for the goal of boosting innovation in search and advertising industry. Senior research scientists & engineers along with fresh & new talent from top universities have been brought together constituting them to work together towards solving complex problems related to current industry issues and also to figure-out potential threats and working towards it in order to rectify.

Part 3: Where are CVC groups located in US corporations? Research one company to: identify where each CVC group reports in an organization, CVC investment priorities, companies in which they have invested.

In the USA, CVC Capital Partner is located at New York (2 Offices) and San Francisco (1 Office).
Going with Google, there are 8 different groups of CVC investors namely Investing, Life Science, Design, Engineering, Talent, Marketing, Partnerships, Operations and there is one group which advises these groups regarding their investments, called as Advisers to GV.

GV has developed a five-day process, called Design Sprint, which answers critical business questions helping them to choose their investment priorities. If I explain in short;
- Monday: Map out all problems and figure out the urgent & important ones.
- Tuesday: Figuring out all possible solutions and sketch the nature of feasibility
- Wednesday: Develop a testable hypothesis
- Thursday: Bring out the prototype / first set of offering as per the hypothesis standard.
- Friday: Live Trials in the real-time environment.

Coming onto the set of companies, GV invested in companies across industries:
1. Consumer Technology: Uber, Medium, Nest, Lime, The Skimm
2. Life Science & Health: Editas, OSI, Flatiron, Pact Pharma, 23andMe
3. Data Security: Cloudera, FullStory, Anomali, TAMR
4. Enterprise Solution: Slack, Dialpad, Gusto, Hubspot, Duo
5. Robotics: Carbon, Airware, Creator, SkyCatch

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