Ep. #1014 - Corporate-Startup Collaboration
In today’s episode of Startup Hustle, we’re sharing the real story on corporate-startup collaboration. Matt Watson welcomes Neal Hansch, CEO and managing partner of Silicon Foundry, to the podcast. They share their ideas on how you, as a founder, can maximize growth opportunities through B2B collaborations.
Covered In This Episode
Join Neal in reminiscing about his early professional days until he achieved what he has now. Learn important entrepreneurial lessons along the way as he talks to Matt about his journey.
Moreover, discover how Silicon Foundry can help your business grow. And take their advice to heart if you’re planning to dive into the accelerator scene.
What are you waiting for? Tune in to Startup Hustle.
- Neal’s background in Silicon Valley and his journey (01:36)
- Neal’s early investments (03:41)
- What Silicon Foundry is about (04:55)
- The focus of Silicon Foundry (07:59)
- The primary driver of M&A for companies (11:55)
- The international side of the business (15:43)
- Neal’s experience before joining Silicon Foundry (18:46)
- What is happening in Silicon Valley now? (22:15)
- Finding opportunities by analyzing the city’s strengths and weaknesses (26:15)
- On creating multiple ventures within the company (29:53)
- Acquiring new companies vs. building new ones (34:47)
- Advice for entrepreneurs who want to get into the accelerator space (38:20)
- The importance of partnering with companies that have no motive (40:13)
I feel like, for a lot of us, once we’ve got the startup itch, entrepreneurial itch, we always want to be part of that ecosystem. In one way or another.– Matt Watson
We all know that building powerful ecosystems and the types of eclipses we’re talking about are measured in decades. Not months, quarters, or years. It’s the talent base, the academia, the existing corporates, and whatnot.– Neal Hansch
We all know partnerships also take a lot of care and feeding. Day in, day out, week in, week out. So you’re making a big investment in your time.– Neal Hansch
A successful B2B collaboration is a must, especially when you’re developing a tech product. Now, does your project need a software development team? Full Scale can help. They employ the latest tech and innovative solutions. And they have highly skilled developers, testers, and leaders ready to work on your project. Talk to them about your needs now.
Startup Hustle also has several podcast partners. Check out what they can do for your business today.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt Watson 00:01
And we’re back with another episode of the Startup Hustle. This is your host today, Matt Watson. Excited to be joined today by Neal Hansch. We’re going to be talking about corporate and startup partnerships and collaboration. He is with Silicon Foundry, which is an organization that specializes in helping corporations with this kind of stuff. We’re gonna talk all about it today. Definitely, a topic that I’m excited about. I feel like, you know, as a company, there’s always so much stuff we want to do. And we can’t do all of it. And always feel like working with entrepreneurs to do things that we could do and spin things out as a great deal. So excited to have this conversation. But today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably. And has the platform to help you manage that team. Visit FullScale.io to learn more. Neal, welcome to the show, man.
Neal Hansch 00:56
Excellent. Thank you for having me. And happy holidays.
Matt Watson 00:58
Yeah, yeah, absolutely. So you are in Silicon Valley and with the Silicon Foundry. So tell us a little bit about your background and how you got to do what you’re doing today.
Neal Hansch 01:13
Excellent. I always love telling that story. So, yes, as you said, I’m sitting here in Silicon Valley, which is where the headquarters for our business at Silicon Foundry is based. My background, I moved out here to the Bay Area in the late 90s, otherwise known as Internet One Dotto. The Go-Go days started as an investment banker, so many of those early internet waves of companies became public. And then transitioned over to being a venture capitalist. So I invested in late-stage companies and then early-stage companies for the 15 years that followed. I was then in corporate development at Adobe, then Macromedia before that. And finally joined here itself on Foundry six or seven years ago. And in line with all those experiences was being, you know, in the ecosystem, either being in backing startups, at startups, an investor in startups, or on the corporate side. I’m trying to identify the right emerging companies to either be a customer or partners and acquire. So I joined the Foundry because of that ecosystem and the intersection points of those interests. Party A is finding the right party B to work with and collaborate with as the core of our business today. So I sort of lived the challenges as a practitioner. And so I saw the need and the opportunity to bring a service to the market, which is the core of our business here at Foundry.
Matt Watson 02:36
One, I feel like for a lot of us kind of once we’ve got the startup itch, entrepreneurial itch like we’re we always want to be part of that ecosystem in one way or another. So sounds like you’ve been on all sides of it. So I guess you mentioned being on the VC side. Did you ever invest in anything that was a Grand Slam? I’m just curious if you had any big winners from those days?
Neal Hansch 03:01
Yeah, it was the first firm I was at, and I can’t take credit for leaving the investment in myself. But you know, the big names there were companies like Netflix and Expedia and others. We took companies public, it was guys like E-trade, you know, which were creating the online market there. And so yeah, a lot of those kinds of Bellwether, you know, one Dotto to Dotto type names. And, so you know, now I date myself, as we looked at companies ago, I saw an opportunity like that 15 years ago, but it was ahead of its time. And now those love those types of companies are you know, now there’s the mobile penetration and other things were now there. There were ideas before that didn’t quite make it, but now many of them are flourishing because all the other elements in the stew in the pot are there. So yeah, it was just some of the types of companies we were backing.
Matt Watson 03:54
So tell me a little more about Silicon Foundry and what you guys do. So you describe it as these big corporations kind of pay you guys as advisors? Is that a fair statement? And then, is your goal to help them find companies that they can acquire or partner with? Or could they start some of their own kind of startups and spin them out? Like, what all kinds of things do you help them with?
Neal Hansch 04:15
Yes, yes, yes. Yes. So yes, so the heart of our business is we work for the fortune 2000. So this may be companies based in Europe, Asia, the US, the Midwest of the US, lat Tam and ultimately, we know their areas of interest, and they’re trying to understand what’s coming. Understand the landscape of emerging new technologies, platforms, and business model innovation services. And you know, as we think about, there’s so much noise out there and so if you’re a corporate and you’re thinking about using drones, you know, and computer vision to accomplish, you know, inspecting your oil and gas rig up in the North Sea or your airplane, to make sure there are no issues, you may look out on the landscape and see 500 startups. And our job is to help identify and say yes before you’re trying to accomplish, these are the five, these are the best of breed emerging players, and then engaging with those companies into your question, either because you’re going to be you as the corporate is going to be a customer of those companies, a partner, or increasingly a strategic investor. So the rise in corporate venture capital that we certainly have seen, you know, in the past 1015 years, or as you referenced, one of those outcomes may be an acquired, or you may start as a customer, while some do a partner and ultimately end up as you know, as the corporate is we should own this business. So, we know their interest day in and day out, and that’s our marching order.
Matt Watson 05:44
So how was that similar to somebody like Forrester or Gartner, like other industry analysts? It sounds like there’s some kind of crossover there, or maybe how they would use them as well.
Neal Hansch 05:54
That’s, the answer is yes. I sometimes think what I’ll joke is, we’re going to find, discover qualifying Dylan and saying and engaging those companies that down the road are going to be in that Gartner Magic Quadrant. And so we’re not helping to make big, you know, IT infrastructure decisions, deciding between Cisco and SAP and IBM. RS is that next wave, new categories, but it is, I think, thematically aligned, which is, here’s the landscape of options. Here’s the landscape of companies to consider making a bet on and if we think of the corporates, so VCs make a bet with dollars, right? And at some percentage of the time, that works out, but often it doesn’t. And hopefully, the winners far outweigh the losers for the corporations, right? They’re making a bet in dollars, they’re going to train the team, or they’re going to roll out these solutions in their warehouses or in their retail bank branches or whatnot. So it’s really much like Gartner other helping those senior C suite decision makers, right. You know, what’s real, what’s vaporware? And ultimately, what they should be betting on, as their classic term nowadays, is they’re digitally transforming their business, right? And what are the right solutions to help them achieve those transformation goals?
Matt Watson 07:11
And you’re trying to focus more on the emerging market, emerging technologies that could help them in some way?
Neal Hansch 07:19
That’s exactly right. It does, interestingly enough, though, so I would say, you know, 70% of our time is just that, right? We’re really focused on the startups. And this is probably a good point to mention, not just startups in Silicon Valley. Obviously, that’s our home. And still, despite the, you know, the media mentions, it’s still the number one area in terms of venture investment activity and new startup launches. But our mandate is to be like a mega surgeon across the world. So if one of our corporations is looking for that drone solution I mentioned, it may very well come out of Tel Aviv, Shanghai, or Stockholm, as well as coming from San Francisco or Kansas City, or New York City. And so yes, it’s it. But in addition to the startups, you know, many of these large corporates, they also want to talk to the senior executives at the tech incumbents who also have solutions to be considering, or they want to talk to the AI researcher, you know, choose your Stanford, you know, Berkeley, Oxford, MIT, so navigating the ecosystem, the main path of navigation is those emerging companies. But it also is the other kind of node as we think about it. And for these corporations to be able to dive in, you know, have those flows of insights and understanding and the right relationships as they’re going through these decision making, you know, paths and journeys for their business.
Matt Watson 08:47
So one thing that’s kind of a related topic I want to ask you about for a minute is, you know, I, my, from my experience of selling a couple of different companies as I feel like large corporations really struggled to be innovated, right? Like they become these big companies, and they don’t have the entrepreneurial spirit as much, they don’t have the risk takers among the management team, and they usually have to acquire it, right? Like they struggle to innovate on themselves because it’s just kind of not part of their DNA as much. I was just curious about that part of the topic and your kind of insight and what you see in that. Is that a fair statement, or am I totally wrong?
Neal Hansch 09:26
I think sitting with a straight face is guilty as charged so often, right? It is difficult. For behemoth corporations to move fast as we know, it can be difficult to be nimble by the sheer nature of their size and their infrastructure and decision-making processes, and if you’ve ever sold to an enterprise, you know working with procurement is probably the finest part of that. Yeah, as we sometimes joke, right? This startup will be, you know, come and gone before we So the NDA is being negotiated back and forth. So I say it with a smile again. It is a challenge. And it’s a challenge for all of them. And so it’s, you know, it’s cultural at times as well. And so it’s really in our mind, it goes back to the senior leadership, and being able to create those pathways, those processes to streamline it, so that when a large corporation is engaging with a startup, it has that ability to move it has that ability to, as an example, define the POC, or pilot program and set expectations mutually and say, Look, we’re going to run this for three months. And here’s the definition of success. And if it is successful, here’s how we’re going to be able to fast-track rolling out the solution, you know, across our large organization. So it’s challenging. Absolutely. And when we work with our we call members, this is, you know, does national become part of that, that work with them, which is how we ensure that the startups that come to the front door if they truly are best of breed, and they have solutions that can be impactful? How can we ensure that that engagement happens successfully, and then the scaling thereafter, is also, you know, set up for success?
Matt Watson 11:15
Well, I think that one of the big drivers for this these companies has got to be growth, you know, I sold my first company to autotrader.com. And one of the first things one of the coolest things I ever did was go to the board meeting with them after we sold the company and presented to the board about more about what my company did, and all that stuff. And it was, it was a really cool thing to go to a board meeting for a really super large company like that. But for them, you know, growth was a key thing, or acquisition was a key part of the growth strategy, you know, they had a product and an offering that was fairly stagnant, right, it was like very mature company, they’re not going to grow like 100% year over year or anything like that, like their growth is 10% 5% 20%, whatever. It’s more of a, you know, incremental growth, where our company was growing 100%, year over year, right. So you get a lot of these big corporations, you know, like, say, Apple or Google or Facebook and any of these kinds of companies, they’re simply not going to grow at the rate that, you know, of course, the stock market wants to see them grow anymore. And the only way they’re going to be able to get additional growth, incremental growth is through acquisition and these sorts of partnerships, right? I mean, is that the primary driver? For most of them?
Neal Hansch 12:26
I think, I think you’d hit the nail on the head, certainly inorganic growth, growth through acquisitions is a powerful tool in their overall quiver. And I think it particularly is powerful when it’s bringing the organization into a new market. Right, right, bringing in a new product than otherwise they’d say, Well, we can build this ourselves. And the answer is probably yes, you can now how long is it gonna take for you to build two years from now or you can buy this platform for this team? I think we see a lot of them also. So there can be, you know, building multibillion dollar acquisitions that bring all of what we just said, they were also seeing a lot of talent acquisitions. Right. So we’ve been engaged by large CPG, historically, whose I need 100 AI, and, you know, ml professionals, and, and it would take them three years to recruit it, right, where they can buy a team that’s already been working together, or he has a platform as well. So yes, I think m&a There’s a lot of certainly we have a lot of conversation as it later in the macroeconomic environment we’re in what does that mean in terms of m&a activity levels, and buying emerging companies that I think there’s a lot of corporates that have lots of cash on the balance sheet. And so you can make a case there’ll be even more because inquisitive and 2023. And so, yes, m&a is not necessarily the outcome, but always in our work with the corporations. But it’s certainly a tool that every single one of them has been using, and I think it will just increase and it also brings up the point of r&d, where’s your, you know, where’s r&d coming from? And I think the pendulum has continued, whether that’s internal r&d efforts versus what we’re talking about here, which is external. And I think so often, the pendulum is continuing to move towards more external r&d To complement the internal r&d that’s happening, which really means buying innovation, in addition to the innovation that you’re definitely over developing, so to speak in house.
Matt Watson 14:25
So I’m sure most of the work you do is under a lot of confidentiality, and NDA is all that kind of stuff. But curious if you had any just examples of some of the big companies you’ve worked with and partnerships they’ve done and the outcomes of those. Do you have any examples like that you can share that don’t violate all sorts of confidentiality.
Neal Hansch 14:46
So there is a lack of potentiality. Yeah, we tend to be pretty forthcoming about who our members are, but the nature of the work.
Matt Watson 15:00
I would say maybe touch upon the types of outcomes which is not the name of the company, but basically everything else.
Neal Hansch 15:03
Yeah, exactly. So, you know, major European telco, right, looking to find companies here to bring back to their network overseas. Right. So that’s scouting for the right startups, the right gaming, or AR VR startups and platforms, or, you know, financial services. And so it’s an example where they’ve got a team on the ground here, but actually, a lot of folks, the entrepreneurs don’t know, they’ve heard of the company, too. They know them from afar, but they don’t recognize what they’re interested in. Right. So you think telco maybe it’s, you know, equipment for the telco, as opposed to recognizing nurses and gaming. So if you’re a gaming company, based here in the States, you want to penetrate this overseas, Western European market, this is a prime partner for you. And so a player like that, and our over work with them, over several years found, you know, multiple startups that become became, you know, powerful partners for them, which I think taking your question a little different direction, which is also the power, of course, so you referenced earlier, the challenge of startups working with corporates, but you know, the success in doing so is, you know, could be a step function in the trajectory of those startups, right, that that corporate, either a represents a big potential customer and a blue chip customer at that gray, which provides validation and, and not just being customer than if it blossoms to a partnership, they represent a channel to a whole new market. Yeah. So we’ve got you got members in the Middle East. So the largest, historically large shopping mall operator and hospitality operator in the Middle East. And so if you’re a retail tech startup, you were probably trying to sell to, you know, Nordstroms, or Westfield malls or Simon malls here in the States. And these are the kind of examples we love. We introduced them to the largest shopping mall operator across, you know, the Middle East in North Africa, and that founders, oh, my God, these guys can be transformative to my business.
Matt Watson 17:07
Yeah, that brings up a great point. There’s the international side of this, you know, at Full Scale, we’re based in the Philippines. And so, yeah, the types of technology, the companies, the products, you see there, some of them are the same, you know, there are products there that they would use in the USA. But then you have other other services that are like a ride hailing service, like Uber is not there it’s grab, or they have a motorcycle sharing service called Juncus. You know, that you have these different, you know, different players. But you’re absolutely right, like, there’s a lot of great ideas, but there might be totally different use cases for them and other different countries around the world. And, you know, if you’re a startup based in the United States, like you might, that’s all totally foreign to you or like, well, how would I take this and apply it in some other country. And so that is a great, great thing you just mentioned there as being able to take that technology and partner with the people around the world.
Neal Hansch 18:06
Ya know, and it’s an excellent point that you just built on. I mean, we, for our business, we view it as we’re building bridges, right, between certainly Silicon Valley and say, Dubai, or Tokyo or so, or south or, you know, Johannesburg, as the case may be. But we also view them as bi directional riches, right, just as you point out, there’s innovative new technologies or services or new business models coming out of other markets, and, and how those come in this direction. It’s not all about Silicon Valley, exporting all the magic, so to speak. And I, you know, personal story. So before I joined Foundry, I worked in Africa for four years in tech, new venture creation and venture investing. And that probably for one of the best examples, which was M PESA, which started in East Africa, actually from Safari called the telco. But this was an example where, look, there’s the bank account penetration in that region, credit card penetration, de minimis, and so it kind of skipped over. And that was one of the most prescient examples of mobile money, right, were posted in a bank account, but everybody had an M PESA account, and they were using phones, moving money. And so as an example, so what does that and you know, so much innovation in Southeast Asia? And elsewhere? So yeah, maybe just beating a dead horse here. But that bi directional flow of ideas, technologies and new services, and certainly aside in the messaging apps, as we all know, as well, depending on the part of the world, you’re in, you’re there iMessage or WhatsApp or line WeChat and then boy, look what what the the ecosystem around a WeChat and how might that informed what we will can should be doing here in the states are the kind of services we’ll see coming out of Europe?
Matt Watson 19:55
Yeah, it’s interesting in the United States. We complain about iPhones and I iMessage or whatever, and then other people in Europe would just look at us like, we’re stupid. Like, we don’t use whatsapp or something, right? Like it’s a whole whole different deal. I do want to take a second to remind everybody that finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io, where you can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs. And then see what developers are available to join your team visit FullScale.io to learn more. And yeah, the international part is always interesting to me because like in the United States, like malls are basically dead here. Like they’re, you know, 10 or 20% of what they used to be in the past. But you go into like the Philippines, they have some of the largest malls in the world. Like, I was there in the summer for three weeks, and I went to the mall, like almost every single day. And the same thing. They’re largely unbanked, like 70, or 80% of people don’t have a bank account. So yeah, it’s in. And as you can imagine, shipping things across 7000 Islands is a terrible idea. And so like online, e-commerce was shipping there is a whole nother whole nother problem. So yeah, you just get these different countries that have totally different, totally different things. So excited to tell me a little more, a lot more about being in Silicon Valley these days. And you think that it has changed from what it was 10 years ago, 20 years ago, it’s still there’s more capital there. There’s still a lot of startups there. But you know, now with even COVID, and things going people going remote seems like a lot of people are leaving this state. What? How do you see that?
Neal Hansch 21:33
Yeah, yeah. And, and certainly, I’m going to be a bit biased as I’m voting with my feet right now. As is, yeah, I’m here in San Francisco. And I’ve been in Silicon Valley for the better part of the last 25 years. I think the first thing I’d say is, on a personal note, I love the rise of the rest, right? Whether it’s in the Philippines or in Nigeria, or pick your country, but the fact that innovation and startup ecosystems are more distributed, and more supportive, and more activity levels than ever before. And, you know, I think that what’s the old saying, talent is universally distributed opportunities that we’re seeing that that equation change. And, and so I think, Silicon Valley today, certainly the pandemic helped accelerate the, as we all know, the work from home of, hey, wait a minute, I can work for Salesforce, but I don’t need to come downtown to their office every day. And I think we still see that in San Francisco itself right now, which is and I’ve been in, you know, New York, London, Paris, team and elsewhere around the world. SF is slower to recover in terms of the downtown vibrancy. So I think during the pandemic, we certainly saw a lot of folks move. If you look at where the movement happened, actually, most of it happened in California, interestingly enough, so you know, not that California is certainly not known for the most friendly business environment. But a lot of the movements stayed regional, a lot of the movement, you know, Arizona, Austin, of course, they’ll have the ball Miami, and whatnot. Again, we love that we love these different ecosystems continuing to grow. I think we all know, building powerful ecosystems and the types of eclipses we’re talking about is measured in decades, not months, quarters or years, right? It’s the talent base. It’s the academia, it’s the existing corporations, and whatnot. So I think Silicon Valley still, you know, from that perspective, recognizes, you know, continues, again, continues to be the leader. And yet at the same point, I think the longer term trends are, that the, you know, the next nine, most active ecosystems are going to continue to rise at a fast, faster pace, then, you know, probably within 50 miles where I’m sitting today. And the good news is, it’s not a zero sum game. It’s not an either or, it’s not truly, it’s not truly a competition. And, and I think what I also love seeing is talent that you know, has spent time whether it’s Silicon Valley, or New York, or London or pick your city, and then they’re moving back to their home country, back to the other comments, and starting companies, they’re bringing that, that experience and company building and growth hacking and whatnot. So, So simply put, you know, as the world is open back up, if we look at some tangible data points, the companies we work with, and the companies we’re talking to, and we hope to work with, we’re starting to see those visits come back, where, hey, they’re gonna come in town, and they want to meet with seven startups, and they want to meet with the tech companies, and they want to meet with the most relevant venture backers that are backing those companies that are likely going to be impactful to their existing businesses for the fortune 2000. So, but again, the press loves, I think, the saying, the death of Silicon Valley. I think about every seven years that headline hits once again. And so to no surprise, but certainly the pandemic accelerated some of the trends we’re talking about. And, I think once again, it goes all the way back to ecosystems, and over time building them and supporting them and driven by talent driven by the flow of capital. And so if I was to fast forward for the next 10 years, would love to see how the Austin’s and Miami’s and others, Chicago and we can go on and on and on, yeah, everywhere, how they, how they rise, yeah, everywhere.
Matt Watson 25:35
And in every every city has, you know, some strengths or weaknesses right of, of, there’s a lot of talent or certain industries that are big in those areas, you know, like Kansas City has its unique strengths, where if you want to create a company in a specific industries, like agriculture, veterinarian, science, automotive, software, healthcare software, you know, different things that are, there’s been a lot of it here in Kansas a good place to go and find talent in relation to those things. And Silicon Valley has been so big for so long, because they were the leaders of that talent, you know, and I think that’s still a struggle we have in Kansas City, it’s like, hey, we can find software developers and salespeople and different stuff like that. But if I want to have a really, really good product manager, who’s, you know, worked at SAS companies, or product marketing at SAS companies or whatever, like, there’s just not very many of those people in Kansas City. And that’s the good thing about going remote now, as companies are more likely to hire those people remotely, so that if anything, I think will help all these other communities.
Neal Hansch 26:42
Couldn’t could not agree more. And I’m glad we the conversation had this direction, that reminds me of two things one is, so while most of our work is with the large data, multinational corporates, we also work with a few states, historically, like we worked with the state of Michigan, with the Office of the Chief mobility officer, and a to your point, it as we’ve done that work over the last number of years, just appreciation for the talent in that state, obviously, historically, so much of it was automotive industry related, but now it’s really mobility more broadly. And so if you’re going to start a mobility startup, right, regardless of where it starts, as you grow, you have to be thinking, you know, do I want to tap that talent base? Yeah, absolutely expertise, that’s expertise. And then a completely different point. But, this does go back to Silicon Valley, as well. But more broadly, the US, you know, forget what the stats are. But it’s something like, somewhere in the 30 to 40 to 50% of startups, you know, the founding team, it or, you know, was not born in the US? Right? It’s that, that one of the hardest challenges is the immigration policy. And, and so, you know, so much of that is our borders are closed, that’s another big impact, at least when we’re talking about the tech industry, the, you know, the big impact on the influx of talent, the talent that stays here, for their first job and to build their first and second, third and fourth company. So that’s the other kind of wing of the talent conversation. And I think that’s, you know, that’s something that, especially the last few years, what’s going to happen with that, and we see it right now we’re seeing it on the, you know, just more on the friends and family thread, we’re seeing it as companies are doing layoffs here in the Bay Area, all those folks are here, but their visa is tied to their job at that large tech company. And so it’s like, wait the next three, six months? What happens with that talent? And does it stay local? Or does it you know, by by, you know, forced to move back or move out to another area because of the visa no longer being there?
Matt Watson 28:47
Yeah, I feel bad for all the people getting laid off these days on LinkedIn every day, it seems like I see somebody posting about it. And I definitely am concerned about those that are on those visas. Like that’s just a terrible place to be, you know, it’s like they’ve got 30 days or 60 days, or whatever it is to find another job and find somebody else to sponsor them and put them in limbo, like, yeah, that’s a terrible place to be. So that’s not good. So curious. Have you seen back to the corporate side of this, of them wanting to be more entrepreneurial and creating additional companies within the company? I don’t like h&r blocks. I think that this is in Kansas City, if you don’t, if you didn’t know a triblock is from Kansas City. And I think there’s been some others that really tried to do this or like, hey, you know, we we know, we’re big and we move slow. And we, you know, slowly, we can’t get out of our own way. How do we create a separate organization to like, go do something curious how often you see that and is anything that your work like involved in that?
Neal Hansch 29:52
Yep. That is truly an excellent question. And I realized you referenced it earlier and didn’t get a chance to touch on it. So Uh, well, a little bit of history. So the Foundry in our name, the original, that thesis of Silicon Foundry was we were going to build companies with corporates, you know, that foundry metaphor. And so they were going to have an idea, we’ve had an idea, we could launch, you know, provide the resources, bring in the entrepreneurial talent to launch new ventures, right out of the gate, day one with corporations. Now, I think we might have been a little ahead of the time, this would have been 10 years ago, give or take them to the firm. But I would say in the last two or three years, in particular, this idea of corporates, having venture studios having new ventures or venture builders, which is okay, where do where where can live the activity of, we’re dreaming up a new product, a new service, a new platform, it needs to have the resources, it needs to have the breathing room. So not probably saddled inside of an existing business unit, you know, it needs to be able to go about the ideation process, the initial product, or service, build, and launch. And so this is very much a topic that we see especially the corporates are kind of on the more forward leaning on the forefront, thinking through how do we construct this? Do we do this in house? Do we do it? There’s an ecosystem of third party providers that say, Hey, corporate, once worked together, we can manage this, this effort, this, this program for you. For our business, we’ve probably worked with at least a half dozen of our members thinking through all of this. And in one case in the Middle East, with a group called DIFC. We’re helping think through how do you have a platform where you’re attracting venture studios who may work with corporates to go about this? So yes, I think the challenge is for many corporates, if they tried to do this without giving it that governance, that structure that that, you know, freedom, degrees of freedom and the right resourcing, then very hard to launch some of these types of new ventures, especially if maybe they’re cannibalistic to an existing line of business, or they’re taking the company in a new territory, that doesn’t naturally fit into a any existing line of business or business units. So we’re definitely I’d say the rise in this has really been the last five or six years max. And so again, it’s that terminology of venture builder, venture studio, or new ventures arm. And so that’s the group who, and often where does it report up and into maybe the Office of the CEO, or the head of innovation or whatnot. And so, looking at the structure and the talent, maybe one last point I’d make is how you capture the intrapreneurship. Right, right. Intrapreneurs inside your big company, where do they go? Right? What are their ideas to go get life to them, and to explore them? We have one, I’ll give you one example there. DNA, DNA in Japan, a company that’s been around for 20 plus years that made their money originally in gaming. So it’s like a, it’s a, a portfolio of technology related ventures, they decided to launch a venture studio. And it’s known as delight ventures today. And that was one of the things that it does is it helps the intrapreneurs. At DNA, if they have an idea, they can then approach the studio, and if it’s accepted, gets funding, and you know, their day job now becomes building that new venture. And it has a venture arm now attached associated with that as well. So anyways, that’s just one physical manifestation and example of here’s an existing successful Corporation, and they realize, you know, that that next wave of new ventures, you know, maybe one path for that and to capture those intrapreneurs is to have this vehicle this channel, this platform for them to go to, and then, you know, get the resources backing and that they need to bring it again, bring that idea to life.
Matt Watson 34:07
Yeah, do you? Do you think we’ll see a lot more of that? Or do you think these companies see that as so complicated? They’d rather just go acquire something, you know, they’re like, I’d rather acquire this thing, then try and build something new because they just struggled to build whatever it is.
Neal Hansch 34:21
Yeah, I think I think it’ll be both. So I think we would certainly say it’s not an either or decision. Yeah. I think if you look at the dollars allocated towards it, it’ll still be higher in the m&a Right, sure. Go do $100 million, or billion or $10 billion deal. But I think we’ll see. I think venture studios and venture building. I think the thing is that they’re actually displacing more of today, and if we fast forward ahead, our corporations are participating in accelerator programs. So if you’re familiar with that, right, we can say let’s get together. You know, in some cases, maybe the accelerator program is for a single corporate, but often it was, here’s our accelerator program. Mobility, you know, let’s go get 1015 Mobility related corporates to back it, and to help work with those startups. And I think the accelerator model has been around for 1520 years. But I think a lot of corporates did that. And and, you know, maybe it felt good. And it was checking a box. Right have what are you doing for innovation? Well, we’re part of the accelerator program. But the meaningful substance, when you get out of that three years later, was often a couple of pilots with startups. And so I think, I think this is part of the maturation.
Matt Watson 35:33
And so I’ve actually seen that in Kansas City. So there’ve been some accelerators, and some of them weren’t thematic, there was like one that was banking related, it was healthcare related. And, and I can’t remember who all the companies were involved, but like, there was a local bank here, that was kind of a higher technology bank, like they had a lot of the API’s and a lot of different things you would need to build on top of. And so yeah, they have like their own, you know, 10 companies that went through the accelerator, and they basically helped fund them, give them access to all their API’s, and all the different things they would need to do to build FinTech products on top of them. And I think that’s another really great way to work is you know, like, hey, we have a platform, we can give you a little bit of funding, come build on top of us, right, like do some new cool thing on top of us. And I think that’s a really great way to do this for those that have a platform that you could build on top of that way.
Neal Hansch 36:26
I completely agree. Yeah. Especially if you’ve got that true. When we say platform, we’re using the metaphorical sense. It’s the true technology platform. Yeah. And attracting the right attracts the right emerging companies to say, look, here’s access, here’s the API that is built on top of this. And that’s a very tangible value in both directions. I can tell you, for me, when I was at McAfee, Adobe, that was a software platform, we were investing in startups who were building on top of our platform. Right? So they it was like you’re building on top, you know, let us resource you with investment dollars, because if you’re successful, obviously that drives more adoption and usage, and goodness, and ultimately revenues for us as the operator and owner.
Matt Watson 37:11
Yeah, absolutely. Well, I do want to remind everybody, if you need to hire software engineers, testers or leaders Full Scale can help. We have the people and the platform to help you build and manage a team of experts. When you visit FullScale.io. All you need to do is answer a few questions about our platform and match you up with our fully vetted, highly experienced team of software engineers. At Full Scale, we specialize in building long term teams that work only for you to learn more when you visit FullScale.io. Well, I really appreciate having you on the show today. As we wrap up the show, I’m just curious if you have any other kind of final tips for you know, entrepreneurs out there listening to the show today.
Neal Hansch 37:47
Yeah, maybe I would just make a few quick comments about, you know, entrepreneurs. You know, a good chunk of the conversation today was from the corporate lens. But as an entrepreneur, if you’re selling into corporates, you know, especially on a strategic sale, it’s really the the advice of make sure that who you’re talking to is at the right position and has the ability to you know, make decisions and deploy capital, it often the entrepreneurs will say, Gosh, I spent all this time navigating the corporate, I thought I got to the right person, but didn’t qualify that, in fact, that was the right audience. And then if you get in just deep on, okay, we’re gonna go work for the next three months. And here’s the pilot, here’s the proof of concept or whatnot, defining success at the front end of, hey, if we do this together, this is the outcome of that pilot, what then happens, and so it’s really expectations and sessioning and defining. And so it’s putting in that work to make sure you’ve navigated to the right group, or individual to engage with. And then once you get underway, ensuring that expectations are aligned. And, you know, again, all that is, is how to be successful as an entrepreneur working with the corporate, because if done right, we know it could mean, you know, an acceleration of your trajectory. Success is defined by revenues and a highly noteworthy customer that can then lead you to others. And so just that last bit of advice of, you know, entrepreneur corporate success, it’s we as we all know, it’s a two way street. It takes insides but, you know, here’s a way to help ensure you’re going to invest that time and energy in the potential and what it could mean on the back end. Is that your life?
Matt Watson 39:33
Yeah, and I’ve, I’ve been down this path, my first company, one of the first things we did is we had like a big partnership with a company that was not a motive is like one of the very, very biggest companies automotive that most people have never heard of. It’s like a multibillion-dollar company, and they were going to resell our software. We’d figured out a partnership that made sense, and they were going to resell our software, and we spent like the next year trying to get them to do that and whatever, and for a long list of reasons never happened. And that’s the other thing is, like, you don’t want to put all your eggs in that basket either because you just never know. It’s like one go-to-market strategy, right? Like those kinds of partnerships and for us, if we had bet everything on it, we would have just died.
Neal Hansch 40:14
Yeah, that’s an excellent boy. Truly. Yeah. So often, I think, Alright, I got this partner, boy, they’re just gonna start reselling me. It’s fantastic. And we all know partnerships also take a lot of care and feeding. Oh, yeah. Day in, day out, week in, week out. And so you’re making a big investment in your time, and to your point, it’s one of your quivers, you’re gonna sell direct, and hopefully, partnerships can augment that. I think there’s also the saying that you have to be able to prove you can sell yourself first. Yeah, repeatedly before you can expect a partner to be able to do it for you successfully.
Matt Watson 40:47
Yeah, it’s always hard to get that big corporate partner to focus on you and focus on what you want them to do. And they’ve got a million other things to do too. So I will thank you so much for being on the show today. Again, this was Neal Hatch with the Silicon Foundry. It’s sifoundry.com. And Johan Conch. Sorry. Thank you so much for being on the show today. And anything else?
Neal Hansch 41:16
No, thank you. And I’ll just sign off as we start. Happy holidays. And here’s to everyone hitting the ground running and a strong environment as we head into 2023.
Matt Watson 41:27
All right, thank you so much for your time today, sir. Thank you.