As you all know (and thank you for your many kind comments and forwarding of my blogs) my objective is to open up your lens, get you to step outside of your comfort zone. To disrupt and innovate as we talk in ProVoke , we need to be mindful and think through how we are changing things. The utility analogy of Carr, firstly educates those who may not be savvy in cloud computing, then he explains the analogy of cloud to the utility business. This analogy often gets used, and I wanted to share this analogy with my readers. Below you will find a summary of The Big Switch.
Read the summary, send your thoughts over in social media , so myself and everyone can be on the dialog. Summary below. Enjoy!
In The Big Switch: Rewiring the World from Edison to Google (2013), Nicholas Carr examines the cloud computing revolution, from its underlying causes to its implications for individuals, business and society.
What is the cloud computing revolution?
- Computing is turning into a utility, in which giant information processing plants use the Internet (cloud) as a grid for delivering services.
- Companies can now purchase what they formerly had to supply themselves, relieving the burden of private in-house computing.
- Economic trade-offs are driving this transformation; it is not really our choice. Centralized delivery over the Internet offers efficiency and flexibility at extremely low cost, which private data centers can’t match.
Why is it happening now?
- Previously, communication capacity lagged far behind processing capacity, preventing centralized delivery of computing.
- This has changed. Internet bandwidth has become plentiful and cheap, thanks to the millions of miles of fiber-optic cables laid down by communications companies during the dotcom boom.
- The full power of computing can be delivered from anywhere, because data can now stream through the Internet at speed of light.
- With the World Wide Web, all computers can be connected as a single network.
- Virtualization and additional technologies have been critical in enabling large-scale utility computing (i.e., one server can now run many applications with a single computer).
What are the implications for the IT industry?
- Cloud computing threatens to destroy traditional IT businesses like Microsoft.
- Eventually, PCs may be replaced altogether by simple monitors, or “thin clients.”
- As utility services are maturing, PCs are becoming a less and less attractive option.
- Private, in-house IT is unlikely to last.
Like the changes that swept through society when electricity became a utility, the advent of cloud computing will have massive implications for us all. Many are becoming visible already, and some of them are less positive than others. Here, I focus on some of the more interesting (and startling) consequences of utility computing.
Digitizing and unbundling of physical products
- Physical objects are increasingly turning into digital goods, thanks to the cheap price of computing and bandwidth. Losing physical form and turning into pure information.
- Whole products are being unbundled into discrete parts and fragments. For instance, newspapers are being increasingly replaced by one-liner headlines on Internet news sites.
- User-generated content is on the rise, because the means of production on the Internet are freely available to anyone.
- Some areas in the information industry are losing out. This is clearly evident in the workforce losses in publishing and broadcasting.
- Computerization is accelerating the wealth gap by unleashing powerful economic forces, giving rise to a very small number of massively wealthy “digital elite.”
- Companies can grow extremely quickly with few workers, where business is constructed mostly of software code and dependent on user-generated content.
- This economic realignment benefits a few individuals, not a few companies.
- Technology is amoral, and the Internet can be used by anybody, anywhere, for good or ill.
- The Internet has become our most vital commercial infrastructure, in all sectors, but it is not under national control or within national borders.
- Very serious danger posed by cyber terrorism, viruses, etc. on the new Internet battlefield.
- The Web is really a web of information about all of us. Information is stored permanently, and our Internet footprint never fades away.
- The Net puts power not just in individuals but also companies, governments, etc. that seek to control individuals. This reduces privacy.
- The computer is ideal for controlling information, even as it is empowering.
How we think, behave and relate to one another
- Cloud computing and the Net tend to exacerbate polarization of people with different beliefs and opinions, through filtering, personalization, etc.
- Encourages us to think more superficially, subjectively, immediately, and less deeply or analytically.
The Web as a possible perfection of the human mind
- Companies like Google are trying to perfect the human mind by detaching it from the body.
- Merging of computers and people, as the Internet’s computing web incorporates humans more and more completely.
- We are feeding human intelligence into the artificial computing mind. Computers will eventually not just take instructions from us and learn, but write their own instructions.
- With the expansion of Internet’s power and scope, we are increasingly cogs in its machine.
In sum, we are leaving the PC age and entering the age of the cloud. The Internet grid is connecting us all. Even Bill Gates recognized the magnitude of the disruptive potential of the cloud while he was still at Microsoft.
The dual nature of the cloud gives power to both individuals and institutions. It offers freedom and control. It’s neither all bad nor all good; neither the utopia nor the dystopia predicted by some. We have yet to anticipate the full consequences of cloud computing; these will take time to become visible. Our technological capabilities have raced ahead of institutional responses, leaving us with social and legal dilemmas. Privacy and security issues are just the beginning.
There is a lot of hype about the cloud today, but it will take time for utility computing to mature. The shift is still in its early stages, and its full effects will be felt as the young generation of today matures. Nevertheless, the cloud is where the growth is, and it is reshaping the entire information economy. Companies in the traditional IT business must commit themselves to adapting to these transformations in order to survive and thrive.
Image credit via MemeGenerator.net.
The two ingredients which I think GREATLY enhance a leader’s (CEO or senior executive) ability to win are:
- Constant and Uber paranoia, combined with:
- Unconventional (unobstructed) thinking
However, I DON’T think paranoia alone is enough. That used to be Intel’s weapon — constant paranoia. A significant weapon, but not enough on its own.
Key in Bezos’s behavior is complete unconventional and out-of-the-box thinking. Such thinking is innovative, unparalleled and usually considered impossible. I have many examples to share with you, but the twothat come to mind regrading Amazon are:
1. Define and own a market when people don’t think it is possible. Start by selling books and then sell everything from all over the world. ‘Limitations’ are simply boundaries in one’s head and that is it!
2. Break conventional thinking. Why not deliver packages on Sunday? Why not use USPS versus only UPS? This is win-win for Amazon and the USPS. USPS is bleeding money, has halted Saturday delivery. is laying off thousands and closing hundreds of centers. Why not develop a win-win strategy? Many would think that USPS is a federal agency, hence you can not negotiate with them or other delivery companies would not respond, as Sunday is an impossible date to deliver mail.
Impossible to many become ‘options’ to a few, those who do not let conventional obstacles stand in their way.
Combined with incessant paranoia, that is a huge competitive differentiator.
On the downside, executives with such behavior (Paranoia + Unconventional Thinking) are very intense, often lack the ability to motivate employees and drive very hard, sometimes too hard! The ability to have these ingredients PLUS a keen ability to motivate staff, now that is the killer winning formula!
When companies become global, for the most part they start and grow operations in various parts of the globe, at times driven by the desire to sell more and expand in these emerging/new markets, and also to take advantage of the lower cost of labor. However, as we discuss in ProVoke, innovation is truly global and is not intended to innovate in location ‘A’ (mostly applies to the US) and expect to succeed by exporting to the rest of the world. In doing so, multinationals miss the opportunity to benefit from the innovation capacity of their global workforce, and hugely miss their growth targets by the ‘innovation-export-mentality’, and not developing geo-specific new products and offerings, to meet the need of different geographies.
Many companies are struggling with this and really frustrates me to see so many missed opportunities, as this is strategic error, and not a necessary error. This is a problem which we can solve. Often, people mistakenly think the reason for failure is cost and an unwillingness to spend money. The fact is, the failure to grow in emerging markets, is mainly due to the fact that we don’t fully understand and innovate for emerging markets. Rather, we push on the innovation-export-mentality. This past year, across the world, I have found Apple defy this paradox, with enormous growth in all emerging markets. One of the reasons for why Apple is successful are thousands of geo-specific and relevant apps, and the platform supports that. The hardware (iPad, iPhone) is the same and marketed the same way, but the apps are highly adapted to the needs of the emerging markets.
Other cool fact: When we stop the innovation-export-mentality, most multinationals will find that they have the local talent across the world to help them innovate for these markets! We just need to recognize the global talent , collaborate together, and innovate globally and locally.
The book Reverse Innovation shares similar thoughts, so I am including the summary below.
Reverse Innovation (2012): Book by Vijay Govindarajan and Chris Trimble
Addressing large multinational corporations in the innovation field, the authors argue that in order to capture growth opportunities in developing countries, multinationals must innovate for emerging markets, rather than simply exporting rich world products to them. After laying out their argument for reverse innovation, they explain in detail the steps needed to implement it in practice.
What is “reverse innovation”?
- Any innovation that originates in the developing world.
- Traditionally, innovations have been adopted first in rich countries and then later flowed downstream to developing countries.
- However, due to rapid advances in technology and the unique conditions in poor countries, solutions that worked for rich countries won’t necessarily work for the developing world.
Why is reverse innovation critical?
- There are vast differences between the needs of rich world customers and emerging market customers.
- These needs gaps include performance, infrastructure, sustainability, regulation and preferences. For instance, poor consumers need decent performance (say, 50% of the top-tier offering) at ultra-low cost (15% of the standard price). They neither need nor can afford a 70% solution for 70% price.
- Because of these differences as well as technological progress, it is no longer enough to follow the old path of “glocalization.” Glocalization posits that the work of innovation is already complete, and that companies can simply take a top-tier product developed for rich customers and remove some features, make minor modifications and reduce the price point.
- For most multinationals, glocalization is the dominant strategy. But this “dumb down” approach fails to meet the real needs of customers in the developing world.
- As a result, multinationals miss out on massive growth opportunities, as poor customers demanding innovative solutions turn to more agile local competitors to meet their needs at a realistic price.
- Eventually, multinationals may lose even more ground if and when these local innovators bring their innovations upstream to the rich world (as trends close the needs gaps between countries).
How to carry out reverse innovation: lessons from the “Reverse Innovation Playbook”
Revise global strategy:
1) Replace old-solution exporting with clean-slate innovating
2) Realize opportunities to adapt emerging-market innovations for marginalized markets in rich countries and potentially mainstream markets in the developed world.
3) Be aware of emerging innovators who are rapidly gaining ground in the developing world and may one day pose a threat closer to home.
Change organizational mindset:
4) Channel people, power and money to areas of growth (the developing world).
5) Break down outdated orthodoxies and foster a reverse innovation mindset in executive leadership (through long-term expatriate assignments, etc.).
6) Acknowledge that developing nations require their own unique business scorecards, P&L responsibility and growth measures.
Adapt project organization:
7) Create local growth teams to tackle reverse innovation opportunities, functioning like brand-new companies and developing clean-slate needs assessments and solutions.
8) Partner closely with local growth teams so that they can take advantage of global company resources.
9) Treat reverse innovation efforts as disciplined experiments, with an emphasis on learning critical unknowns.
A case study of reverse innovation in action: GE Healthcare in India
- The problem: A dominant manufacturer of medical-imaging and diagnostic technologies, GE Healthcare found that their high-end, expensive electrocardiogram (ECG) machines were grossly underselling in India – a country where cardiac disease was a major social issue. (Ubiquitous in the hospitals of rich countries, the ECG is the most commonly used cardiac test in the developed world). However, the cost, weight, and power requirements of the $3,000 high-end model proved prohibitive. It was an unaffordable and impractical option for the vast majority of Indian patients and clinics, who had far less money, reliable power, transportation, and medical experts than their Western counterparts. As a result, the $3,000 ECG model was capturing only a fraction of the Indian market share compared to local competitors.
- The solution – lessons from the Reverse Innovation Playbook:
- Lesson 1: GE decided to innovate from scratch. They eventually developed a portable, inexpensive ECG machine designed specifically to address the needs and constraints of Indian consumers.
- Lesson 2: GE expanded the market for portable ECG machines around the world, reaching new underserved customers in rich and poor countries. In doing so, they attained a huge advantage over emerging competitors.
- Lesson 7: To pursue this innovation opportunity, GE created a fully empowered local growth team (based in India) which built the new product from the ground up.
- Lesson 9: Rather than holding the project to strict outcome-based measures of success, GE superiors focused on reviewing how much learning the project was generating and reducing risks.
In sum, developing nations are not just like we were 50 or more years ago, and they’re not going to follow the same path of development that we did. Technology has rendered our historical progression archaic, and emerging market customers have vastly different needs and circumstances than our own. Multinationals that sit back and wait for developing nations to “catch up” to rich ones and demand rich world products are going to be left empty-handed, as local innovators offer the groundbreaking solutions that these consumers really demand. The next big threat is going to come not from the rich multinational rival we already know of, but from an unknown company – whose name we probably can’t even pronounce – gaining ground several oceans away.
True: We live in a highly globalized world and country/regional boundaries are not as severe. However, it is naïve to think that things are the same everywhere. In particular, technology, innovation and the jobs (and micro and macro economies) which technology/innovation gives rise to. In the last 2 years, I have spent very deliberate and active time in various geographies to understand the ecosystem of disruption and innovation.
- India: Thousands of jobs are being created, but in certain areas. Funding is still an issue. Being an investor in India, trust me when I tell you, Bangalore and Mumbai are not the same as Silicon Valley and lack the vibrant growth ecosystem.
- Europe: This year, I was stunned to see the distress in the entrepreneurs in Italy, frustrated with not being able to innovate rapidly and their lack of funding stories. Berlin is slowly emerging to be a vibrant economy. The UK is perhaps standing apart from the others, but the UK also very much regionalized and not flat across.
- China: Hugely regionalized and lack of consistentency across China. While capital is available, the culture (ecosystem) of entrepreneur/investor/risk and reward is in its infancy. The government bureaucracy is significant and is used as a shield to slow the pace and rate of innovation. Talent is huge and the journey is just starting but the energy is eruptive.
- Japan: Historically a hugely innovative country but is now slowing down due to a very weak economy. Japan has a very poor ecosystem of innovation and culturally motivating or inspiring the Japanese culture to disrupt and innovate is very difficult. Change is harder to see in Japan.
- South America: In certain pockets, you have zones of innovation but these are not consistent, not connected and not yet globally visible. Energy is huge, though.
- Poland/Russia: Here, perhaps I see something very different. There is huge energy, a willingness to take risk and invest, fearlessness and resources. I am totally excited and blown away by the attitude of disruption and innovation in these countries as well as other countries in this region. Totally shouting out to these countries for nurturing a culture that is organically changing the landscape of possibilities and job creation.
- Detroit: An example of many cities in the US, where innovation has not (and may not) create game changing jobs. Are we okay with only a few cities in our country being centers of innovation? See review below.
To succeed: We need to have mini Silicon Valley’s in all the countries above (and in different cities in each country), else, we will always rely on Silicon Valley, and Silicon Valley CANNOT and SHOULD NOT serve the entire world (thought this may offend many of my VC friends!). We need to spread innovation and job creating across regions, or else we are creating artificial zones of innovation power (i.e. San Francisco, NY , Boston), while the rest of the country and world is nowhere close. While Moretti’s focus is the US and mine [In my book, ProVoke] is global, we share many points in common around the characteristics of such zones of innovation and influence and the consequences of clustered economies.
These are a few of the geographies in the world which, while the potential is there, we are not yet seeing the organic explosion of technology driven jobs (meaning: Not part of a US or European company or native start-ups funded locally). Case in point: last week in Berlin at TechCrunch Disrupt, almost all the VC’s who got on the stage, with the exception of very few, were from the US, from Silicon Valley, talking about investing in Germany! Clearly, we need to make this a domestic organic effort. Germany is a hugely innovative country, so why not take risk in innovation and create the landscape of the new jobs within that country?
Why is innovation so important? Because unless we disrupt and innovate we will NOT create new jobs and opportunities to grow and be vibrant as an economy. We will die away!
While thinking through these thoughts, I came across Moretti’s book The New Geography of Jobs. There are many parallels in our thinking. Below you will find a summary of the key points for my colleagues and blog readers. Let me know what you think!
Research by Enrico Moretti shows that geography matters more than ever in modern America. In his groundbreaking work The New Geography of Jobs (2012), Moretti reveals that our nation is undergoing a massive redistribution of jobs, wealth and population. Americans are sorting along educational lines, causing pronounced divides between cities in terms of schooling, labor productivity, and earnings. This redistribution disproportionately benefits centers of innovation, with the impact on everyone in these communities, including those outside of the innovation sector. We are witnessing what Moretti calls the “Great Divergence,” the rise of cities that have a strong innovation presence (“brain hubs”) and the decline of cities that aren’t innovating.
- By “innovation sector,” Moretti refers to all jobs that create new ideas, products and services (advanced tech, IT, life sciences, new materials, nanotech, robotics, etc.), in which the main production input is human capital (people and their ideas).
Innovation Drives Our Economic Growth
Even though the vast majority of Americans do not work in the innovation sector, our economic prosperity depends on innovation for two reasons. First, innovation drives productivity growth (due to technological progress) and consequently overall economic growth and the salaries of many Americans, whether they work in innovation or not. Second, innovation jobs have a large multiplier effect, increasing the employment and salaries of local service providers.
- For each new high tech job added in a city, 5 additional jobs are created outside the high tech field within the same city: 2 professional jobs and 3 nonprofessional jobs.
- This multiplier effect of innovation is 3 times higher than that of the manufacturing sector! (Creating 1 new manufacturing job leads only to 1.6 additional jobs outside manufacturing.)
High tech jobs have such a large multiplier effect because high tech workers are very well paid, with more disposable income to spend on local service providers (from hairdressers and waitresses to lawyers, therapists and teachers). Also, high tech company operations require substantial local business services.
- Thus, our economy is highly interconnected: what is good for one group (e.g. higher income) in job creation is also good for another group (lower income) in the same city.
- As a result of the multiplier effect, even though job losses are widespread, job gains are geographically concentrated. Some cities benefit while others lose jobs.
The Great Divergence: Innovation Clustering
With the “Great Divergence,” innovation is concentrating in a handful of US cities, resulting in huge differences between the most and least innovative areas. One key measure of innovation is the share of workers with a college degree. In Moretti’s ranking of major US cities by percentage of workers with a college degree, his findings are astounding:
- In large cities with the highest percentage of local workers with college degree, almost 50% the labor force is college educated.
- In cities at the bottom of the list, only 10% of workers have a college degree and there is little tech presence.
- The city with highest percentage of college educated workers (Stamford, CT) has 5 times the number of college graduates per capita as the city at the bottom (Merced, CA).
These staggering differences lead to large salary disparities between communities. Take San Jose, CA (#5 from the top) and Merced, CA (bottom of the list) which are less than 100 miles apart, but have completely different labor markets.
- San Jose has 4 times the number of college graduates per capita as Merced.
- The average salary of a college educated worker in San Jose is 40% higher than in Merced.
- The average salary of a worker without a college degree in San Jose (e.g. high school or less) is 130% higher than in Merced!
- Thus, brain hubs pay high average salaries to non-skilled workers as well skilled ones.
Most astounding of all, is that for salary, where you live matters more than your resume.
- High school graduates in the top group make MORE than college graduates in the bottom group!
Thus, the Great Divergence is leading to 3 Americas:
1) Brain hubs (with high salaries for both skilled and unskilled workers)
2) Declining cities (with low skill levels and labor markets)
3) Middle cities (which could go either way)
Clearly, where you live matters. It impacts all aspects of your life – even how long you live! But why does this geographical sorting occur in the first place? Why do innovative firms tend to cluster near each other in brain hubs, leading to higher salaries for both skilled and unskilled workers? Moretti finds three major reasons or “forces of attraction”. First, there are thicker labor markets in these hubs, allowing for better matching of demand (employers) and supply (workers) in innovation jobs. Second, there are more specialized service providers in these areas, including venture capital. Third and most important in my eyes as a disrupter and provocateur, clustering leads to knowledge spillovers. When creative workers interact socially, they benefit from more learning opportunities. This leads to greater innovation and productivity, and in turn higher earnings. In other words:
- Being around smart people makes us smarter, more creative, and more productive in the long run.
Implications: Turning Declining Cities into Brain Hubs and Keeping Current Hubs Cutting-Edge
According to Moretti, the key way to create jobs for less skilled workers is to attract high tech companies that hire high skilled workers. So what can we do to help declining cities grow their innovation sector? This is a major challenge with no easy solution.
- Ultimately, it is very difficult for cities without an innovation cluster to start one. These cities are crippled by limited human capital, dead end jobs, and low wages.
- The tough reality is that the power of local governments to revitalize these communities is a lot less than the power of historical factors, path dependency and strong forces of attraction. These latter factors make it very hard for a city without an existing well-educated labor force and established innovation sector to improve.
- In order to be successful, a publicly financed push must lead to a privately sustained cluster.
Here is the irony: our clusters actually give us a global competitive edge (for now), even though they’re leading to divergence. Our brain hubs are part of the reason why the US is so innovative and profitable. But we cannot slip into complacency.
- History shows us that not all hubs are equally able to adapt to change (take Detroit or Rochester, NY).
- Clusters must be able to adapt and reinvent themselves to maintain their prosperity in the long run.
Why is it that we are NOT in awe of the corporate venture arms of multi-billion companies? Yet we remember large venture firms and what they have done! In my work with large enterprises and ProVoke, I am stunned as to how underutilized, over-protected and cautious the Corporate Venture arms of my clients are. Why not use your capital to achieve a ton more, innovate and inspire your staff? My role is to disrupt the current ecosystem. I am a huge advocate of Corporate venture for the following 4 reasons:
1. To test the waters, experiment rapidly and proliferate in different areas of innovation at a hugely positive rate. Allowing companies to diversify at a very significant rate and helping nurture the external ecosystem.
2. To grow a hugely positive arm of the company by growing the corporate venture arm into a multi-billion enterprise within an enterprise.
3. To help seed and grow new areas of technologies , where their company can be leading force. While at the same time invigorating their internal staff. Instead of remaining as a ‘relic’ old enterprise, why not become a huge force of innovation!?
4. Instead of acquisitions as a segregated innovation-silo, why don’t we look at acquisitions as the path from disruption to innovation.
Hence I liked this month’s HBR article by Josh Lerner on Corporate Venturing. He and I share common thoughts around this topic and I have summarized Josh’s key points. Enjoy!
In his article, “Corporate Venturing,” published in the latest issue of Harvard Business Review, Josh Lerner makes a compelling case in favor of corporate venturing. In the tech field, a company’s success depends on its ability to move flexibly in response to rapid changes in technologies. This involves both knowledge of current innovations and trends, as well as effective adaptation to these transformations (by developing new technologies, etc.). Traditionally, this role has been left to R&D; yet corporate R&D is often limited by pressure to narrow its project focus and cut costs. As a result, companies often lack the wide perspective (beyond their area of expertise) required to deal with competitive threats effectively.
According to Lerner, investing in start-ups offers companies an alternative way to learn and innovate.
- (1) Corporate venturing enables faster response to market transformations by giving parent companies an inside glimpse into groundbreaking areas as well as possible ownership of new ideas. This takes some of the pressure off of corporations to develop capabilities on their own (very costly in time and money).
- (2) Corporate venturing offers a better view of competitive threats by allowing companies to stay abreast of potentially disruptive changes outside the company. By investing in competing technologies, companies can better keep up with them and avoid being blindsided (a role which R&D often fails in).
- (3) Corporate venturing offers easier disengagement from fruitless investments, because it’s easier to let go of outside investments than internal projects that have bogged down. This is critical because it frees up resources for more promising projects.
- (4) Venture investments can lead to increased demand for the corporation’s own products when the corporation invests in the development of technologies that rely on their own platform. Thus, corporate venturing can be used to shape and create market ecosystems in their interest.
- (5) Corporate venturing often leads to higher returns because corporate-backed start-ups tend to outperform those backed solely by independent VCs.
Despite these benefits, corporate venture funds often run into problems. Companies have wasted billions of dollars trying to invest their venture funds successfully, partly due to the very different mind-sets of the parent company and the venture fund. Lerner offers several recommendations for how corporations can make their venture capital funds work.
- A) Alignment of the goals of the venture fund and start-up with corporate objectives promotes better investment decisions and more successful start-ups. According to a study by Lerner and colleague Paul Gompers, corporate venture funds are more successful when the focus of the corporate parent and their portfolio firm business overlap, and start-ups that are aligned with company goals outperform those that are not.
- B) A streamlined approval process helps facilitate fast-paced and flexible investment into potential opportunities. Companies with convoluted approval processes force their venture funds to try to satisfy many different interests, so that they wind up with too many divergent goals.
- C) Strong incentives improve recruitment, retention and performance of corporate venturers. This includes making compensation in a corporate VC fund comparable to that of independent VC groups, as well as linking pay to proven investment success.
- D) An experimental mind-set that tolerates failure can help circumvent the pitfalls of a risk-averse fund. Punishing failure and playing it too safe can lead the parent company to miss vital opportunities.
- E) A high level of corporate commitment to promising projects can help prevent the damaging consequences of being seen as an unreliable investment fund, and also keeps high-caliber outside investors interested in joining.
- F) Finally, gathering knowledge from the start-up is as important in the venture fund’s role as acquisition deals. Knowledge transfer from start-up to parent company is a difficult but hugely important task, critical for the success of both the venture fund and the corporation.
In sum, corporate venture funds can be as successful as the top private VC funds and can even outperform them. When internal research no longer satisfies the critical need for insights into new disruptive technologies or market movements, a well-managed venture fund can help a corporation discover the next game-changing idea.