Corporate use of the driving forces powering tech tornadoes
Use the disruptive forces of tech tornadoes in a corporate cyclone JV
The tech. giants have become tornadoes disrupting industry after industry. Start-ups are also springing up and the most successful of these are growing into new Tech. giants. Even loss-making Tech. companies with enormous cash burn find it easy to raise much more venture capital than a traditional corporate which has been profitable for years. Tech. tornadoes disrupt and then dominate industries with 5 powerful driving forces:
Tech Tornado Drivers:
- Passion for innovation
- Long term strategy
- $ billions venture capital
- Best technologies
- Best global talent
A virtuous circle is created where these drivers reinforce one another.
The traditional corporate, however, can face a vicious spiral downwards as Tech. tornadoes enter their industry. They lose their best talent, access to capital shrinks and so their technology becomes outdated.
Founders drive innovative long-term growth strategies
Tech founders have a passion for innovation along with ambitious long-term strategies spanning decades. Traditional corporate boards answer to stock markets and shareholders seeking dividends and steady, predictable quarterly growth. This makes traditional corporates exceptionally risk averse. This permeates every layer of corporate management who must relentlessly drive their staff to achieve quarterly performance targets. This stifles innovation and slows the adoption of new technologies.
Access to $ billions of venture capital
The most convincing Tech. company founders can access vast amounts of venture capital to invest in their ambitious long-term strategies. Their VC investors seek opportunities to disrupt looking very high returns and accepting high risk. In marked contrast, the traditional corporate is constrained to financing growth capital and new product development from its own balance sheet justified by short term return on capital.
Investment in New Technologies
The rate of technological change is accelerating exponentially putting traditional corporates at a rapidly growing and fundamental disadvantage. They have neither the access to capital nor the shareholder appetite for risk to invest in new technologies at the rates that the tech tornadoes do. The internal culture of most corporates is risk averse and innovation is deployed more slowly by staff fearing the consequences of failure implicit with being innovative.
Attracting and rewarding the best global talent
Attracting and developing the very best talent is the most powerful weapon in the tech armoury. The industries that they disrupt and then dominate have management and staff shackled to the endless corporate treadmill of quarterly financials. Bureaucracy is more important than creativity. Corporate pay rates are flat. Most tech companies however, nurture creativity and inspire their talent with bold visions of the future and how the individual can make a difference. Rapid company growth presents fast career development. High salaries and generous stock options ensure that individuals in Tech. companies really share in the organisation’s financial success.
The scale of these profound strategic challenges facing a traditional corporate at every level seem insurmountable. It would require a complete re-invention of the corporate organisation for it to become a tech tornado itself. In any case, corporates have shareholders, customers, infrastructure and supply chains that seek stability. Critically, the Board and its corporate management layers do not know how to set up and then run a tech tornado anyway.
Corporate cyclone JVs
The new corporate equivalent of a tech tornado is a ‘corporate cyclone’. This is created when a corporate forms a joint venture (JV) with INNOVO which has the expertise to provide the corporate with all the forces used by tech tornadoes. These include a passion for innovation, the capabilities to execute a long-term strategy, enable access to $ billions of external venture capital and the best technologies. Above all, a corporate cyclone JV with INNOVO can attract and reward the very best global talent.
The JV can be initiated by a Founder/CEO with a passion for innovation and the corporate experience to leverage INNOVO’s extensive capabilities. The Founder/CEO brings the corporate to the JV. Alternatively, a corporate can initiate a JV with INNOVO and appoint or recruit its own Founder/CEO. Once formed, the JV can raise very large-scale venture capital because of its ability to execute an ambitious long-term strategy.
The large corporate has to all the capabilities of INNOVO through the JV. For example, INNOVO knows how to recruit experienced corporate entrepreneurs for the JV. These are ambitious, driven, experienced corporate executives with a passion for innovation. They commit to the JV for high deferred pay and stock options because they believe in it – they are not salaried. Everyone who works in the JV is protected by governance based on retrospective fairness enforced by independent arbitration. They get a fair, uncapped share of the audited value that they create with the corporate. The level of potential rewards for the JV’s corporate entrepreneurs are similar to executives in tech tornadoes.
A corporate cyclone JV is a limited company which can raise $ billions of venture capital. Unlike a tech tornado developing its own technologies however, INNOVO can provide the best technologies from its external partners. It knows how to commercially screen millions of external innovations and technologies to find the most promising for the corporate. JV executives can then work with the corporate to rapidly test and then deploy the ones that generate the most added value.
Above all, the best global talent is attracted to the cyclone JV. They are excited by the freedom to leverage their expertise to create the maximum new value for the corporate assured that they will earn a fair share of it. Earning tradeable share options in the cyclone JV can offer them the life changing financial returns enjoyed by executives in Tech. tornadoes. INNOVO gives 10% of its own JV income to good causes further attracting the best talent committed to making a difference.
INNOVO knows how to set up lasting JVs in weeks. The corporate’s existing structure is unchanged and it remains committed to serving its customers. Its shareholders see no change in the corporate board’s commitment to reliable quarterly financial growth. As corporate shareholders, they automatically share in corporate’s substantial stake in the new cyclone JV. More importantly, they can see that the corporate now has access to $ billions of new venture capital, the latest technologies and the best global talent through the cyclone JV. Not only can these new cyclone forces be used defensively, they can also enable the corporate to swiftly take market share from traditional competitors slow to adapt. The corporate’s own quarterly financial performance benefits from the additional, rapid and substantial input from the JV. The corporate can enjoy much higher returns than normal because the high risks and associated very high returns are contained within the cyclone JV which is externally financed.
If you are interested in exploring INNOVO Corporate Cyclone JVs, please select one of the following: