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Opinion

Pinterest as corporate VC model

Pinboards: it’s a confession of our DNA, a wish list and an imagining of what would ‘complete me’. “I want this, it goes with that, this is the value it has to me, this is how I am going to use it.”
Isn’t that a great corporate VC model?
I’ve had shifts from entrepreneur to operations bureaucrat to sales and back again. It gives a real appreciation for certain types of dynamics and complexity. Small companies are just way different than big companies. Small companies are in a race, big companies are in an endurance contest.
I expect a coming “pinterest model’ for corporate VC.
Some context:
Until recently, large profitable corporations had been reluctant and innovation slow. It’s already well thought out by Clay Christensen, Geoffrey Moore and many others.
I can only contribute that its a balancing act and much of their plodding was deliberate as these companies first had to clean up their own legacy systems and architecture before they could monkey around with shiny new things. They had been burned with early 2000’s internet hype, made bad acquisitions and in many cases, that management team from the acquiring company still remains and they remember. Historically innovation has been expensive, time consuming and resource draining. Money, is a minor consideration, their greatest concern being effect on the ‘secret sauce’, that quality resulting from years of tweaking, trial and error that allows everything to run smooth. Introducing something radical into a precise mix can cause havoc on a large organization.
However, large companies now have completed significant strategic acquisitions, rolled up the fragmented industry competitors and had exponential growth. This in itself was challenging as a big killer of companies in times of buying top line growth is indigestion.
The best companies are now light years away from the tertiary players, they can breathe easier, their architecture is more flexible, they can plug and play new things. And, new generations of middle managers have a culture that can manage both movement and progress.
This new, more agile large company, top tier in it’s industry, wants to be on the field with the players rather than spectators in the most expensive seats.
What’s on their pinboard:
a. Engagement and intimacy. Because of shareholder demands, they’ve tripped and to create leverage they’ve changed staffing ratios and lost intimacy.
Intimacy is a premium business.
How can you make their clients cooperate collectively and be moderated within their platform.
Too many young companies and start ups are building the wrong product, they are creating an onion skin that sits on top of customer interaction instead of deeply ingrained within the system where it has to work seamlessly and collaboratively with depts such as billing, service, sales.
b. enhance operational excellence with technology process improvements.
Operational excellence is the most difficult to master and it takes time and maturity, its expensive. As an example, large companies have massive amounts of data. They need to own technology that leverages that data. Yup, they want to own, not lease.
What won’t be on their list:
a. Low cost client acquisition: Big companies have huge sunk costs for client acquisition, reducing that cost by a sliver divided over the projected life of the client just doesn’t matter. And be careful, Freemium is thought of by many big companies as a vitamin deficiency no matter how imaginative forecasting. They already have free as a lever.
(is Yammer an exception? No. It was a strategic play on customer intimacy.)
b. Nickel and dime aesthetic improvements that cause ten dollar disruptions.
Most of the big players already have a sufficient client facing end that works.
Superficial G wiz technology doesn’t play well with the secret sauce

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