why corporations are turning to digital accelerators for leadership & innovation

Why Corporations Are Turning to Digital Accelerators For Leadership & InnovationNUS-ISS Digital Leadership & Innovation Conference 20 November 2015

Hugh Mason, CEO, JFDI.Asia Pte Ltd [email protected] http://jfdi.asia

JFDI.Asia URL: jfdi.asia Blk71 Ayer Rajah Crescent #05-16

Coming Up

Introducing JFDI1. The Startups Are Coming2. Making Sense of The New Reality3. So How?


Introducing JFDI

● Founded in 2010 by Hugh Mason (49, PR)and Wong Meng Weng (39, Citizen)

● First ASEAN startup accelerator, backedby IIPL, Fenox VC, Family Offices, HNWI’s

● Attracted over 2,000 startup teamsfrom 80+ countries. Supported 250 teamsvia MOOC at pre-accelerator stage,

● USD2m pre-seed capital deployed into69 startups, >50% raised median USD550k

● Over 300 jobs created, >50% of which arein Singapore and >50% filled by SCPRs. JFDI’s own staff of 16 split Singapore-Philippines.

● No exits yet but 48% IRR (unrealized). However initial equity-only model limits value capture and time to realize value is too long for operational sustainability.

● Now raising capital to a) build on learning, b) pivot to new model yielding fees + equity + options through co-creation with industry partners and c) reduce costs by offshoring.


JFDI Clients, Investors & Partners


1The Startups Are Coming


OMG Startups Can!!!!


All Hype?


Leaders Grieving for a Golden Age?


Heroes to Zeroes?


Schadenfreude


Something Has Broken

Short Term: How to keep telling an innovative story to the analysts when the numbers are flatlining?Mid Term: How to start shaping, acquiring or getting in on innovation at a reasonable price?Long Term: How to avoid getting disrupted, change culture to a future orientation and stay relevant?


Corporations Are Fading, Faster Than Ever

Average lifespan has decreased from 61 years in 1958 to 18 years today


Financial Services are Unbundling


Healthcare Too


The Startups Are Coming


Unbundling Hits Products Too


The New Reality

Founded: 1916

Market Cap Today: $99.37B

Culture: Minimise Risk

Innovation Style: Incremental

Founded: 2003

Market Cap Today: $28.95B

Culture: Maximise Opportunity

Innovation Style: Disruptive


“After This, There is no Turning Back”

"You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland,

and I show you how deep the rabbit hole goes."


2Making Sense

of The New Reality


“A startup is a temporary organization designed to search for a repeatable and scalable business model”- Steve Blank

“A fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo-day”- Susan Cohen

Some Definitions


Trend 1: It’s Cheap to Try Out Tech Ideas

Cost to launch a Tech Startup Source: Upfront Ventures


Trend 2: There’s a New “Science of Startups”


JFDIDiscover

JFDIValidate

JFDIAccelerate

Individuals

Teams

Problem Statement

Minimum Viable

Prototype

Traction

Seed Stage Startup

Series AStage SME

Startup Weekends, Hackathons

Product Development

Customer Discovery

Growth Hacking

Demo Day



1. Discover 2. Validate 3. Accelerate



Trend 3: We Can Accelerate Success & Failure


Trend 4: New Mindset● Design Thinking● Lean Startup● Agile Methods● Launch and Learn v Plan

and Perfect


Trend 5: Tech2Market or Market2Tech?M

arke

t Ris

k- S

houl

d it

be d

one?

Technology Risk - Could it be done?LOW HIGH

HIGH


Trend 5: Tech2Market or Market2Tech?M

arke

t Ris

k- S

houl

d it

be d

one?

Technology Risk - Could it be done?LOW HIGH

HIGH

“Teams that … took the Lean Launchpad class ... had a 60% success rate”(Blank 2013)

http://steveblank.com/2013/08/21/reinventing-life-science-startups-evidence-based-entrepreneurship-2/


3So How?


In Five Years It Will Probably Seem Obvious

Conceptualization Iteration Implementation

StartupsAgile, Nimble, Fail Fast

CorporationsScale, Leverage, Distribution, Can’t Fail


1. Denial

2. Arousal

3. Infatuation

4. Over - Confidence

6. Acceptance

“What’s a startup?”

“My CEO read about startups in Forbes.”

“We should set up a fund.”“People will give us valuable IP for nothing!”

“Let’s sponsor a hackathon!”“This is so much more fun than work.”“Look, analysts ... shiny things!”

“This looks easy. Let’s do it in-house.”“Our middle managers can all be mentors.”“Order more post-its and disruptive T-shirts!”“You can be an ‘intrapreneur’ too!”

“Until it makes $50m it doesn’t move my needle.”“The operating units aren’t interested.”“This all needs tightening up. Bring in PwC.”

“We have a role and startups have theirs.”“We need a mature engagement model.”“Maybe we don’t need to dominate this process.”

5. Disappointment

Six Stages of Innovation Awakening


Corporate Innovation Starting Points

JFDI Delivers

● New Product & Service Startup Businesses

● Capital growth

● Pre-emptive investment rights

● Early access to a diverse portfolio

● A more innovative company culture

● Brand affiliation with innovation

● Innovative talent identified / acquired

● Deeper staff, client channel engagement

JFDI Solutions

● Themed accelerators

● Venture building

● Venture scouting

● Fast follower labs

● Mentoring

● Sponsorship

● Innovation events

● Innovation showcase

● Co-locating staff & startups

● Collaborative Innovation events

● Innovative client experiences

Problem: How to ...

● Get Access to Digital Investment options?

● Outsource innovation to generate new kinds of value?

● Inspire internal innovation?

● Do Professional Staff Development?

● Demonstrate an innovative culture?

● Farm speculative investments?

● Expand scope of products & services?

● Pay it forward?


Execution is All


“Start with the end in mind” - Steven Covey

● Customer - SupplierCorporate sources products or services from a startup to enable efficiency or to extend functionality of its own processes, products and services

● Distribution PartnershipCorporate leverages its partners and networks to offer distribution to a startup for its products and services

● Development PartnershipCorporate and the startup co-operate to execute R&D

● Joint VentureCorporate and the startup develop a new project together based on the expertise and interests of both parties

● Direct InvestmentCorporate takes shares in a startup still under development

Many Possible Ways To Co-Create Value


Model 1: The Skunkworks

● Lockheed Martin, 3M, Intel, AWS

● Waterfall style- slow to market

● Not conducive to disruptive innovation

● Insufficient for unpredictable market shifts and competition


Model 2: Inspiring Intrapreneurship

● Aims to commercialize employee ideas● Widely publicized to boost employee

morale and promote innovation● Waterfall style- slow to market● Tend to be driven by existing business

units rather than disruptive innovation● Internal politics may be an issue● Qualcomm Venture Fest ● Employees didn’t know how to move

projects forward


Model 3: Internal Innovation Labs

● “Start-up style” for salaried employees

● Not equipped to scale their successes

● Mercy at the quarterly budgets● Budgetary and political pressure

for promising projects● Xero PARC


Model 4: Hackathons

● Events● Morale-booster● Short term● No real products


Model 5: Innovation Colonies

● Corporate accelerators● Separate locations● Lean (small) budgets● Fast to ship● Market Valuation● Skin in the game

(equity)

Source: Lean Enterprise by Trevor Owen


Model 6: Co-Creation

Theme Selection Session

Discovering Problem

Statements

Ideation Workshop

with PartnersAcceleration

Definition of targets

Technological domains aligned with Sponsor focus areas

Validation

1 day 1 month 2 months2 x Workshops 3 months or more

Identification of 25 problem / market needs statements by JFDI

Problem statements are field of ideation and will be agreed with Sponsor

Ideation between Sponsor, JFDI and further partners

Workshop is facilitated by JFDI

Partners to participate are agreed with Sponsor

Sponsor represents about 20% of participants

Participants will sign in with resources for market validation

Validation focuses on market and technical hypothesis critical for success

Participants to sign in with resources for the acceleration phase

Validated ideas will be selected for acceleration

Lead

IP N/A N/A Held in Escrow by JFDI Held in Escrow by JFDI Assigned by JFDI to Participants


JFDI’s Response

JFDI doesn’t just deliver PowerPoints and concept prototypes. In two quarters we source or create, validate and accelerate new businesses, complete with paying

customers. As investors ourselves, we aim to create companies that will generate

value repeatably, profitably and scalably.

Time to market Hands-on execution

Shared financial and market risks In Asia for Asia

JFDI was created in Asia for Asia. We and

our partners understand the

culture, challenges and opportunities

unique to our region.

JFDI shares risk and reward and aligns with

clients’ long-term interests through co-

investment.The aim: Asia scale

USD250m+ exits


@hughmason [email protected]

“I didn't say it would be easy, Neo. I just said it would be the truth”