The business models of large corporations are being disrupted faster than ever before, e.g., Netflix is disrupting the video distribution industry, while new lucrative markets being created by innovative startups, e.g., Uber, Nest, and SpaceX. As a result of these developments, corporations are starting to realize they will need to re-invent their disruptive innovation model. We have proposed a new model that brings together corporate venturing, intrapreneurship, corporate development and business development. In order to determine whether they can successfully achieve their disruptive innovation goals, corporations will also need to find a way to measure their track record under this model. For this reason they must identify the right Key Performance Indicators (KPIs), which I call innovation-KPIs, to distinguish them from execution-KPIs. Silicon Valley’s ecosystem, particularly VCs, can play a key role in the innovation model’s re-invention and offer best practices for relevant innovation-KPIs.
Corporations from industries as diverse as agriculture, manufacturing, logistics retail and financial services are being disrupted at an unprecedented rate by a variety of innovations. From technological breakthroughs in cloud computing and big data analytics to disruptions like crowdfunding and social engagement, most of these innovations are created by startups, including many that are based in Silicon Valley. As corporations attempt to address the implications of these disruptions and become more innovative, they are trying to determine how to interact with and benefit from the startup ecosystems creating these innovations. In this series of posts I will present and discuss a new model for corporations to use as they consider disruptive innovation. The model is very much influenced from my experiences over the past 25 years in Silicon Valley as an entrepreneur, startup and large company executive, and investor, as well as by the interactions on this topic I had with over 100 corporations over the past three years.