How Big Companies Are Becoming Entrepreneurial
In the past, we heard of intrapreneurs or individuals that behave like entrepreneurs in major companies. These were the all-star engineers who would come up with original ideas and create new products. These days, companies have embraced intrapreneurship to drive technology, stay ahead of the competition and as a recruiting tool. This trend has been driven in large part by Generation-Y, a generation of entrepreneurs that want to reinvent the business world as we know it. Companies are going to have embrace entrepreneurship if they want to be successful. Google is a great example of a company that understands this. If you work there, you are in a startup culture within a major corporation. It is part of the reason why they receive thousands of resumes each day. My prediction is that hereafter, all companies will resemble startups and have a startup culture, regardless of size. Intrapreneurship programs are promising because talent can drive new ideas and products and caters to employees who are entrepreneurial nevertheless lack resources.
Colleges aren't the only ones starting their own entrepreneurship contests. Companies are using similar contests to engage their own workforce and as external recruiting and branding tools. Ernst & Young, to illustrate, has "The Technology Challenge," which is an internal competition where employees come up with new service offerings for their customers. PwC, another major consulting company, runs the "PwC PowerPitch", which is an research contest where the winning team receives the sum of $100,000 to implement their idea. Mitra Best, the US Technology Leader for PwC says that several of the top PowerPitch ideas have been implemented already and are creating value for the company. For instance, two of the top ideas in 2011 were on predictive analysis and PwC created an analytics centers as a result of the ideas. Three of the ideas were related to PwC's role in cloud computing, which are now in the "idea refinery" where workshops bring several ideas at the same time and develop two to three services around them.
The Start-Up Challenge
Amazon Web Services has the "Start-Up Challenge," which is a competition for start-ups that use its Web, e-commerce and cloud-computing innovation to build their infrastructures and businesses. Prizes include a cash grant of $50,000, mentoring sessions and a potential investment offer from Amazon. In 2011, Fantasy Shopper was the grand prize winner and Localytics was the runner up. Qualcomm Ventures offers the "Qprize Competition," which is an international business plan competition open to mobile industry entrepreneurs. The top prize is $250,000 of convertible-note financing. Corporate contests are promising because people are competitive in nature, it gives them the possibility to make a name for themselves at a big company, and great PR.
Companies are investing in startups instead of just acquiring them. The most recent example of this is Microsoft's "Bing Fund", which is a new angel fund and incubator program that seeks to partner with entrepreneurs that focus on the mobile and web experience spaces. Microsoft as well invested $240 million in Facebook for 1.6 percent of the company back in 2007. Last month, Dell announced the "Dell Innovators Credit Fund," which provides entrepreneurs up to $100 million in financial and scalable research resources. American Express announced last year that they would invest $100 million in digital commerce startups that would help fuel their digital transformation. As well, Advance Publications invested $10 million in Unified, a software company used by brands and ad agencies to buy, manage and measure ad performance on social networks. Startup investments are promising because companies can't always acquire a startup in the early stages, when they invest they get a new partner and they fuel growth.
When people speak of entrepreneurs in residence, they for the most part talk about successful entrepreneurs who have a position at a venture capitalist firm or within a business school. Today, innovative companies have embraced the idea of an EIR by claiming their own. Both Google and Dell have recruited EIR's to stay ahead of the curve and to advise them on startups. Stacy Brown-Philpot has been an entrepreneur in residence at Google Ventures since May. During Stacy never started her own business, she led operations for more than forty different products, including Google Search, Chrome and Google+.
Ingrid Vanderveldt recently landed her position as Dell's first entrepreneur in residence. Unlike Stacy, she is currently an entrepreneur as the CEO of Green Girl Energy, the creator of the GLASS Forum, CEO of Ingrid Vanderveldt LLC and Managing Director of VH2 Energy Investments LLC. More brands will start to bring on EIR's hereafter, especially in the research industry, where acquisitions and investments are the norm. EIR programs are promising because they have knowledge on what startups are worth investing in, can oversee entrepreneurship programs, and can be used to attract new startups into corporate ecosystems.
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