Tech Startup Feast or Famine
Isn’t it ironic that some companies have more market opportunities than they have resources or interest in pursuing while
there exist many regions that would
love to build a tech startup ecosystem?
The Mission
Innovation Refinery fosters new business creation. We create, mentor, innovate, consult, and find paths forward. We work with entrepreneurs, inventors, and companies - big and small.
The Story
How we got here
It didn’t start at once, in fact actually happened over decades. It came in fits and starts. Seemingly unrelated experiences formed key pieces. It took a long time to jell into an idea.
The start
The first bit happened around 1981, when Bob Spinrad lunched with the materials scientists in the Xerox PARC cafeteria. He told us of his recent trip to DC where he showed various government agencies electronic document processing. At a cocktail party after having shown the novel personal computer and laser printing to great fanfare, a senator from the South approached him. He said something to the effect, “You folks are real good at inventing technology. But what we really need is for you to invent jobs.”
This met with a hearty round of guffaws from the scientists around the table. I was “the kid,” at 24, and I wasn’t inclined to disagree aloud with one of the Dealers of Lightning. Yet as a Kentuckian, I recognized the nut of truth in that senator’s insight. I have never lost sight of the need to invent jobs, a need which is greater today than then.
It may mean re-prioritizing the goals for companies and investors from profit alone towards sustainable jobs. One key problem is that corporations and the innovation ecosystem is geared to maximize wealth and profit. And jobs are the major cost factor in the equation. It is neither formulaic nor impossible to achieve a better balance where job creation enters into a company’s goals. It will require experimentation, treasure, and determination. But we do see a way, or at least a trailhead.
Excess Business Opportunity
Over the next four decades, we witnessed the opposite end of the spectrum where business opportunities were in excess. Where? We first found it in big enterprises and then in smaller companies.
In BigCo, the situation takes multiple forms. Sometimes, a product becomes an orphan after the corporate strategy or priorities change. Other times, products would get all the way into beta testing and then were cancelled, never to see the light of day. Still others were driven by an R&D lab or major customers who would bring common industry problems to the company. They may even do proof-of-concepts or pilots, only to be declined as a product by the company. Imagine the scene from the end scene of Raiders of the Lost Ark, as they bury the Ark of the Covenant in a vast warehouse.
On the NewCo side, many technology companies create a technology or product platform which can potentially be used for multiple uses. However, a small company can only afford to concentrate on a single market while trying to establish itself and grow. Often there are many back-burner usage models that are never explored, and this only constitutes the known ones.
Transplanting
This eventually led to the concept of connecting the places of want with the places of excess. The places that want jobs, especially first class technology company jobs, are looking for ways to create these just as is done in Silicon Valley. The places with excess business opportunity would like to achieve new revenue streams and pull through of existing product.
Our model is to create technology business transplanting. Instead of starting with raw technology or technologists, we transplant the existing product or technology into a new business area and geography. Many regions have substantial business talent, although the existing talent often lacks experience with doing a tech startup. Traditional business is executed with a good concept of the target customer and the go-to-market process, and a complete idea of the total product. Startup companies, especially with new technology, are often light in these fundamentals.
Tech startups often require quite a bit of zigging and zagging to discover the best product-market fit, and need business support around that area. Initial staffing needs to be flexible and to do multiple different jobs to keep costs down. The staff also needs to be resilient and comfortable with shifts in the company in an effort to find solid ground.
The Refinery Concept
Innovation Refinery's dual roles are to
Find, coach, research, and develop new business opportunities; and
Find, coach and transplant these opportunities.
We typically form NewCo's for these opportunities, but it could just as well be to create a new product or division within a mid-sized company. We will work with the organizations and vehicles in the target geographies and ecosystems. We will create profitable companies that will pull with them a significant number of new jobs. These companies will be first-class product companies which own their own fate rather than readily exported support services companies.
By starting with technology transplants, NewCo's can quickly spring into existence. And these NewCo's will become the incubator for creating startup business talent for the region. As the local technologist's spark brings forth a great idea, this experienced talent will be able to foster that spark into a flaming hot native NewCo.
