Novel combinations of products and services offered by startups are a valuable resource for established companies to monitor and leverage. Some open innovation companies follow this logic by investing, partnering, or allying with some of these startups. This process is not exclusively restricted to companies acquiring startups, but it also encompasses the ways they bring external knowledge through mutually beneficial relationships.
Some companies have even created internal venture capital pools with the purpose of:
1.Creating a mechanism to market technologies that would have otherwise been shelved
2.Forcing the organization to be more agile about idea execution and validation
3.Creating an experimental setting to receive insights and feedback about customer needs and trends outside the company’s core business.
Ultimately, these corporate venture capital branches represent an important effort by companies acknowledging their need and commitment to include externally generated innovation in their own efforts.
For more information, see chapter 3 in Open Innovation (HBSP, 2003) by Henry Chesbrough.