Join hosts Murray Robinson and Shane Gibson as they share their unique insights and experiences with startups, scale-ups, venture capitalists, and corporate innovation.
In this episode:
We delve into managerial fear of innovation and its impacts on organizations. Why does this fear exist, and how can it be overcome?
We expose the illusion of “innovation theatre” and question the true nature of innovation in the corporate world.
Murray and Shane propose alternative models for organisations aiming to boost their innovative capabilities, drawing from their vast experience in the field.
This conversation is a must-listen for anyone involved in startups, innovation initiatives or looking to shake up their company’s approach to innovation!
Read along you will
Murray: In this episode, Shane and I talk about our experience with startups and scale-ups venture capitalists and corporate innovation. We talk about manager’s fear of innovation, innovation theater, and some models that organizations could use to be far more innovative than they are now.
Shane: Welcome to the No Nonsense Agile Podcast. I’m Shane Gibson.
Murray: And I’m Murray Robinson.
Shane: Hey Murray. And today I think we’re gonna talk about innovation in the world of agile.
Murray: Yeah. wanted to talk about innovation because I think innovation is ultimately the point of agile. Agile is all about building valuable products and services for consumers and users. So it’s an enabler of innovation.
And I’m inspired to talk about this because I was just reading that Canva, which is a Australian startup, about 14 years old is now worth more than Telstra. Australia’s largest telecommunications company. So Telstra has shrunk and canva’s grown from zero to, 66 billion over 14 years. And it’s run by, a group of young people who started it, in their early twenties. Canva provides a whole lot digital assets for, building websites. en Envato is similar. But both of them are appealing to the international market, particularly the American market.
There’s been some other really successful Australian startups recently. A cloud guru. I used to work with Sam Kreinberg the guy who started a cloud guru, and they sold that for 6 billion to one of the big education providers, and they’d only been going for about five years. Then there’s Atlassian in Sydney. That’s, worth a huge amount of money. I used to work for Seek, the big Australian jobs board before they went to IPO. Real estate.com. I met those guys in their garage. I know David Whiteman from Afterpay and I did a little bit of work with them in the early days.
And I think that sector’s grown with almost zero support from the corporate sector. I was just wondering what your experience is in New Zealand. What’s going on there?
Shane: So yeah, we’re seeing some successes. So I was lucky enough to work at zero just as they listed on the stock exchange. When I was there, there were 30 or 40 people and, they’ve grown to be a massive unicorn. We’ve seen vens Exited and Timelys exited. See the same pattern where they’ve been around for seven or 10 years and built sustainable businesses. Nowadays, everybody’s getting VC funding. It doesn’t have to be profitable , business doesn’t have to be sustainable. Yeah, at some stage it’ll blow again. But yeah, it’s good to see companies like Canva who have become sustainable businesses do well.
Murray: Yeah. And you’ve got your own startup.
Shane: yeah agile data io. We’re bootstrapping, so we’re not going for funding. It changes the way you think about it. And we’re almost two years in, so another five to eight years, and we’ll be an overnight success.
Murray: You’re right, it does take quite a few years normally. A cloud guru was only five years to 6 billion, and that’s pretty fast. Canva I think was, 14 years. Atlassian been around for, , 20 years. Iconix is a construction industry software company a bit like JIRA that started in Melbourne about 20 years ago and sold to Oracle about two years ago for a couple of billion.
I actually worked for a venture capital company, in Australia when I was doing my MBA. And it was very interesting to see because they were very conservative. Venture capital works on the two and 20 principles. If they raise 50 million to invest, they get 2% of that as a fee every year. So they get a million dollars every year just for managing it. And then they get 20% of whatever, increase there is in valuation of the fund. And it takes, seven years for the fund to pay off.
Their view was that one third of the companies they invest in will fail and they’ll lose their money. One third will do okay and return their money plus a bit. One third will get two or three times their investment and 1% will be this unicorn that’ll give them a thousand times return. It works all right without a unicorn but if you get a unicorn, it gives you fantastic growth. But they were really very conservative. I think things are different now because people who made their money in , some of the dot com ventures have been quite involved in helping startups with new things. Cause you know, it’s interesting and it’s fun and it seems like a good way to make more money..
Shane: Yeah, we’re definitely seeing that over here. So, the people that were the core founders or early people into trademe were all active in Zero and Vend and some of those others. And as those companies have exited, I’d expect that the early people in those companies that have cashed out will go and add to the community.
We’re also seeing some interesting stuff happening out of the US in the data and analytics space. In the US we’re seeing a lot of data and analytics software that was created out of Uber, out of Airbnb, out of Netflix. So people that were in those organizations were employees, were creating some cool stuff. They open sourced that code and put it out in the market. Then they’ve left those organizations, started their own companies using that software and made it commercial open source. So provided us a platform and get VC funding for that, which is really interesting because if you think about as a venture capitalist, you’re gonna give these companies 30 million seed funding, but they’ve already got a minimum viable product because the product was built for Uber. They’ve already got a market because data observability or data testing or those types of things is a known space. So we’re seeing a different pattern in the data and analytics space around startups for b2b.
But the problem I have with it, just like I have with agile transformation projects is it’s not sustainable. It’s a pyramid scheme. The goal of VC funding is to make money not sustainable businesses, just like the goal of agile transformation is to transform, not make a sustainable organization that adopts agile patterns to do things better. I’m not a great fan of the pyramid scheme.
Murray: For a long time in Australia, venture capitalists would only invest in things that had been proven overseas. They would only invest in Uber knockoffs and Airbnb knockoffs and delivery knockoffs. So something had to be proven in the US or the UK or Europe before venture capitalists would touch it. The Australian market’s not that big and the VCs were very conservative, so none of them wanted to back anything that could go, on the international market because it was too risky, it was unproven. It’s odd that VCs only want to invest in proven business models, but that was what was going on and that was quite stifling .
Shane: But if you look at Canva and you look at Atlassian, they picked a wave, they picked a change in the market. So you look at Atlassian timed it right with the Agile way of working revolution, and they provided software that supported it. Canva looked at this idea of design thinking and, beautiful counts and ugly doesn’t and they road that. There’s a cloud database called Snowflake, and they rode the wave of cloud computing for data warehouses. So the organizations that have picked a change in technology or change in the market, picked a wave, picked it early, invested, and then rode it at the right time, have done really well, but there’ll be 101 companies that picked the wrong wave or missed it and, crashed and burned. So they were innovative. They were just wrong product. Wrong time.
Murray: Yeah, I was reading an article about Y Combinator, which has been very successful in the US as a startup bootcamp. They give people who go through, $50,000 and they take 7% and they’ve been spectacularly successful. Cause one of those companies was Uber and another one was Airbnb and so on. But, the founder of Y Combinator said that luck plays an enormous role. They score idea one to 10 execution one to 10 and then the founder’s skills and ability to adapt, that’s one to 10. And then luck one to 10,000. So it’s completely outweighs everything else.
Shane: Yeah so thanks for killing me, as the co-founder of a bootstrapping startup. Yeah, thanks. I need to hear that. Might as well just go down to the horses or the casino and put some money on zero and spin the roulette wheel. Yeah, I think, you know, luck and timing
Murray: I think it’s like surfing. You gotta go where the waves are breaking and then you’ve gotta have the skill and the persistence to catch a wave. If you didn’t have the skill, there’s no point in going there you can’t surf.
Shane: So it’s interesting if you take that concept you talked about risk, about the VC’s funding, not sure bits, but ones that are more known. And we turn that round into the corporate world and we get on to that whole idea of innovation within a corporate. I don’t know if you’ve seen it, we’ve seen some large corporates go and hire a floor in another building and put out the bean bags and paint the walls with blackboard paint, and put down the fake grass and create the innovation hub.
Shane: but they’re not taking a risk. Yeah, they’re risking a bit of money and they’re putting their best people out there, but if the innovation hub doesn’t work, they just go back to the way they were working. They don’t lose their business. But then you look at companies like Kodak and Blockbuster who didn’t innovate, who didn’t take the next wave, the consequences of them not innovating successfully we’re dire. So again, it’s about that risk reward and the consequence of getting the risk wrong.
Murray: I’ve worked for companies that had the innovation hub with the beanbag, and you probably wouldn’t be surprised to hear Shane that these things are sold by big consulting and professional services firms as a solution to the corporates innovation problem. They come in and they set it all up and they take $5 million and they run it for a year. And generally they don’t achieve anything much even though it’s, fun for the people in it.
Basically it’s all theater. What corporates do in the innovation space I would call innovation theater, which is to say it’s all about appearances and looking like you’re innovating, but they don’t really do much innovation. And the reason for that is because in corporate space, you can only do something new if it comes from the senior executive team.
Only the senior executive allowed to have new ideas for new products and services, and they’re the only ones who can get the support, to build them. So it’s gotta come from there. If it comes from anywhere else, it’s just ignored. And then those people are very concerned about protecting what they have.
Often innovative things and innovative ways of working are quite threatening to the existing order and the existing people. And they tend to either not put much effort into it or put an enormous amount of effort, like a billion dollars into something that they didn’t even experiment with. They just decide this is the thing and they put a billion dollars into it and then find that people don’t want it. So corporates are very bad at innovation. My experience is that senior managers will go around stomping out innovative ideas wherever they see them. Cause they see them as a threat.
Shane: Yeah. And I suppose it depends on the culture. I love the story about 3M post-it notes, how somebody was trying to make a glue that was really rock solid and the glue he got didn’t hold. And he went to throw it away. And they worked out that using it on 3M post-its was a perfect thing. That’s where it came from. So often innovation comes out of failure, and if you’re a leader in an organization, can you afford to fail? It’s also about hunger. I remember a case study I read once about GE and that they would routinely fire 20% of their sales team every year. So they would set everybody quotas. They would track how close to your quota you were, and the bottom 20% of their sales achievers got fired even if they made their quota. So if every salesperson in that organization made their quota, the bottom 20 still got fired. So they built that hunger in. So if you are in a business that needs to change and you need some innovation, what do you do? Do you actually start up another company and you fund it and you say to the startup, your job is to make us irrelevant, Your job is to take us out, be hungry, annihilate us, but we still own you. So, maybe that’s a way you get innovation
Murray: No, they’ll never do it. They just won’t do it. There are companies like 3m, as you point out, that have innovation built into their core and are very good at it. And then there’s the people who make the stealth fighter bomber. Lockheed Martin are well known for their skunkworks. It’s very outcome focused. It’s very flat, very engineering focused. It’s all about trial and error and a real experimental, scientific approach. It’s all about doing something very small, testing it, make it bigger, testing it.
There’s a lot of really interesting work around this in the lean startup movement where basically they took what people were doing in Silicon Valley and that was working and they codified it. It’s all about trial and error as well, but with working very closely with customers and end users. But most of the products, that we are talking about, the challenge is finding product market fit.
Shane: Yeah. And how do you innovate with that? A few years ago Gartner came out with this idea called black Ops. So they talked about a slow lane and a fast lane. You had your production e water, foley type development . And then the alternative was small squads that went in, did little bits of short, sharp work, could have called it Agile. And so when an initiative came up, it got, selected as either going down Path One or Path two. So the whole rapid application development idea versus big product development. And then they iterated on that with this idea of Black Ops, which was the only way to change an organization is to ignore all the rules. So from a technology point of view, if you’re gonna go and implement a new system, it always took years. And the idea of the Black Ops was an elite team of people would drop in for one to three months and deliver something to production, but ignore all the rules. And you just keep iterating around that with different delivery of different products using that technique. It seemed like an interesting idea, but whenever I saw it tried, it was always, yes, you can come in and be black ops, but there’s a few other rules you have to follow. Like the design document and some architecture review and some security stuffs. We’ll be agile and, innovative. Yeah. But we’ll be agile and innovative while you follow our current processes.
Murray: in my view, Corporates are terrible at innovation because management doesn’t want to take any risks. But they wanna look like they do it. So they engage in this theater of appearances to make it look like they’re innovative and that theater includes hackathons and innovation hubs. But they don’t actually do anything much.
Shane: Yeah so if you were truly about innovation, one of your senior leaders would go and sit in the Innovation hub for the whole time and focus on that, because that’s how important it is and that that hardly ever happens.
Murray: Well, the core idea of big corporate is that failure is not an option and management are always right. If you wanna do something new, it’ll be a project and it’ll be done in a traditional way with a traditional business case. You’ll just do it and at the end you will have done what you said you were gonna do. But is it gonna achieve its business case? Probably not. And does anybody care? No, not really. It all gets washed out in the politics of the organization and nobody really knows, who was really responsible or whether it was really a success or failure . Cause it’s all just people debating it.
Shane: Yeah. If you’re gonna do something innovative, focus on how it’s gonna change your North Star or what OKRs are gonna move, I remember talking to somebody many years ago and they got bought in, to start up a innovation thing. They went out and bought iPads for everybody. Now, if the North Star was spending money to give tablets to everybody, they were, they killed it. Really great. If the North Star was the organization behaved in a mobile way and could work from anywhere it didn’t work because the only application on the iPad that they could use was email I download some games. None of the corporate applications that they relied on day in to day out was on the iPad, so they always had to go back to a laptop or a desktop device. So, what does success look like? What’s our acceptance criteria? What’s the value we are gonna add as a result of this change?
Murray: If I was a senior executive I could see two ways that we could be more innovative. One is for some sort of existential crisis to come along, like Covid, which forces you to make a lot of change. And also everybody around you is making a lot of change. So it’s becomes, socially acceptable to do the same thing as everybody else. COVID and working from home really drove, the biggest change we’ve seen in corporate life . Likewise, if a company, gets into a financial crisis where they’re unprofitable, that can be a time when, substantial change is allowed. And that’s often a, driver for an agile transformation or some other transformation.
Shane: I’ll add one more in there, which is a horrible one, but war. We actually get some real innovation when there’s a war. So I think from memory, Kevlar came out of the military
Murray: Jet planes, came out of war. There’s always massive innovation. Computers came out of World War ii. Turing and all of those guys developed computers.
Shane: Yeah, it takes a crisis like that for companies to change the way they work to something better.
Murray: If I was the CEO of a bank or a telco, I think the best way to get innovation would be to set up your own venture capital fund and put hundreds of millions of dollars into it. Ask people who are working for you for innovative ideas and run them as venture capital investments in a portfolio.
So people in the company see needs that the company has and that other people in the market have and the company agrees to be a friendly customer. To help them get going, they operate completely outside the company for normal financing and rules and so on. But they can use the company as a customer.
Shane: Yeah, I have a different opinion. So as a corporate, I’d take some of money and I’d find startups that look like they’re solving problems we have. And then I’d give them that money as a cornerstone customer, I’d say, here’s some money, but you need to come and solve these problems for us, because now we’re giving them real life examples, we’re giving them a real customer in the real world that needs that problem solved.
Murray: A cornerstone customer who’s also an investor would be very valuable for a startup.
Shane: Yep. So here’s the thing. They have to be a customer, not an investor, because if they’re the core investor, then they have too much control and they will start demanding features that the founders of the startup may not think is valuable to the market. So they’ll get siloed to only solving that customer’s problem. So they need to give them money, they get the benefit of changing their organization, but they’re not actually an owner of that startup because then they’re in control and they’ll force the wrong kind of features.
The second thing Id do. Is I would focus a massive amount of my time and effort internally, removing barriers from making the people that work with us innovative.
Shane: So you go talk to people in these organizations, they’ve got great ideas. They’re at the front line, they know where the problems are, they can see it, but they’re never allowed, they’re never enabled to fix it themselves. So that’s what we have to change. unblock them.
Murray: I absolutely agree with that. I was thinking about that as well. Agile has a continuous innovation cycle built into it with retrospectives and regular reviews. The team identify problems and then solve them. But the issue for most teams is that they can solve problems within their own team within a few months, and then they run it into blockers with the rest of the organization.
For example, they’re not allowed to deploy anything to production, and they have to go through an ops team, and that ops team, has a three, month lead time and all the problems you get with another team. Who can be very bureaucratic. And they get, blocked by their own management who don’t want to hear of any challenges.
In order to innovate you gotta have a problem to solve. But it can be very unacceptable in corporates to say, we have a problem. It’s often the case that senior managers will say, no, it’s not a problem, because it’s all tremendously successful.
Shane: I’m trying to do some root cause analysis that what stops agile teams being successful, and a lot of the time it comes down to scaling problems. As we grow and wanna do more with more people, we have a scaling problem. Sometimes it’s an empowerment problem. They’re not allowed to be self organizing and do whatever they know is right to iterate on the way they work. And the third one is dependencies. They’re dependent on somebody else that they can’t control that workflow and therefore can’t deliver.
I was talking to a customer I’d worked with and helped coach their team a while ago, and she was saying somebody comes in and starts us off. And then they leave. And the test is whether that culture carries on, whether it keeps on growing and changing. But I love that idea that, innovation is not a project. It’s not a transformation. You’ve gotta sow the seeds of innovation in your organization and feed and water it grow it? And then when it takes hold, get out of the way so it innovates without you.
Murray: I agree with you. I think you’re making a very good point, which is that people who are doing the work know what the problems are and they quite often know how to solve them but they’re not allowed to because of the politics of the organization and the current structure of the organization. So if we could empower people who are doing the work and support them with servant leadership and funding, then we can do a lot more. I saw an interesting one at, a large telco, there was a CEO who used a software tool, to asked people to raise ideas for change within the organization, and then people would vote on them. Then it would go through some sort of central process and executive would be allocated, to do something about it. It was unfiltered and a lot of really interesting things came up.
Shane: So let’s take that example because I loved half of it and hated half of it. So I love the idea that people who have the problem can expose the problem and the organizational brain could vote on onto, and, how’s there any different to when we do a retrospective of a Scrum team and they figure out all the problems they have and then we get ’em to.vote what they’re gonna do next.
Shane: But the second problem, the second part of it, this bit I hated, was then it went up to some hierarchal executive that got mandated with fixing this problem or innovating on this thing that they didn’t create, they didn’t own, they’re gonna do in their spare time. Why wouldn’t you just, again, adopt the agile mindset? Why wouldn’t you then say, okay, we have some constraints, but here’s a bucket of money that’s going to the top ideas. The people that wanna work on the ideas can put themselves forward. And, we have some self selection process across the organization those people can, be selected to do that work. We set what good looks like in the acceptance criteria, and then they run off and do it. Why does it need a hierarchy.
Murray: That would’ve been much better. So for example, I put up a lot of ideas because I’m an innovative thinker and a critical thinker. And some of the ideas I put up they acted on, some of the ones were easy to do but they never talked to me. Nobody ever contacted me. Nobody ever asked me, would you like to get involved with this? Since you put up the idea and have been lobbying for it? It all went through the hierarchy and went back down to some other traditional group to do. I think your idea is absolutely spot on.
What they should have done was to set aside a large amount of money for improvements, continuous improvement. And if people put up a good idea, then that person should then have moved into the innovation team with other people who are passionate about it and people who understood very well how to execute on it. And they could work together in a kind of internal startup .
Shane: That reminds me of a couple of software vendors I worked for. So we’ve gotta be careful that innovation isn’t theater, like you said, that there is actually value coming out of it. So one of the software companies wanted to change, they were getting stomped in the market. They needed to adapt. So they took, some of the smartest people outta that organization and put them together and let them go away and innovate. And that was really successful because they had fun. The problem was we ended up calling them the toy shop. Because they would go away and innovate and they would find something really interesting and they’d do a quick proof of concept but they were just toys, we couldn’t never deploy them to a customer. The toy shop was great if you wanted to get some smoke and mirrors for your next sales cycle, you gave it to them. They gave you something you could show the customer, and then once you sold it, you ran like crap before the consulting guys turned up to try and deliver it. So it was never production, it was never real.
The second example though was where the organization took a servant leader approach. So the people that were in that group, published out code, they published out patterns and toolkits and quick starts, and they made them available globally. It was an intranet site where you went to when you wanted something and it, it became a perme culture because the consultants would find these snippets of code and go use it on a customer and go, oh, but it doesn’t do that. And they’d update it and they’d push it back. It was internal only, but it was almost the genre of open source communities. And it was successful because everybody else grabbed some of that value and added to and gave it back. And that was really successful.
When I’m working with teams, I see people that are willing to change and be innovative, they are willing to change things that they know are broken, but does innovation really take a specific mindset? Do you have to be able to see the art of the possible? Do you have to be able to do blue sky thinking? Do you have to be able to do systems thinking to be innovative? Or are people with those kind of traits just better at it? So what do you think? Do you think innovation is a skill, a mindset, or an opportunity?
Murray: It’s all those things. People who are innovative They’re open to new experience as a personality trait. They’re intelligent, they’re widely read. They think a lot, they’re quite critical, they think independently. They want to try new things. They They get passionate about things, and they lobby for them, even though politically it’s probably not the right thing to do. And, they really want to make change and are passionate about making a change. They’ll put a lot of effort into it and solve a lot of problems. You need those sort of people and they need to be supported and the opportunity they’re tackling has to be, a real one. So there could still be a lot of luck where involve like surfing, where you’ve got the right person with the right capabilities and they got the right surfboard, there’s just no good waves out here or, so you see, I have to, it’s a combination of all those things. Commitment mindset opportunity funding and just luck.
Shane: Which all equates to risk, so to get that perfect storm, to get all those things lined up and to get a return on the investment you are making, there’s a massive amount of risk of that never happening. So our organization’s willing to see 18 out of the twenties?
Murray: Are they gonna take a venture capital mindset?
Shane: Yeah. Which is about, I’m gonna lose a lot of the time. Whatever we care about, money, people’s enthusiasm. The couple of times where we win, where we get it right are worth it. Yeah. Is that what they’re gonna do as part of their organization?
Murray: It seems very rare. There’s only the three M’S and the Lockheed Martin and Steve Jobs and people like that who seem able to do it at. Corporates seem to lose the will to do innovation quite quickly when they scale.
But something I was thinking of though, Shane, as you were saying that was that there’s a lot of processes and methods and techniques that you can use now to reduce the risk of failure or even better to find out that you’re going down the wrong track before you spend too much money.
That’s probably the key thing. All these people who spend 50 million on a project and then find that, hardly anybody uses what they produce, that’s the common corporate way of doing it. Whereas it’d be much better to spend, $20,000 to find out that people didn’t want what you were gonna just about to spend $50 million on.
And all that sort of stuff comes out of the lean startup, agile, entrepreneurial area, design thinking. There’s a lot of really good processes around there that we can use, which is basically about going out and talking to customers very early on with a concept and an idea, getting them involved in helping you to develop something that they want. and then executing on a small part of it very quick and getting it out into the market to, to show that you can actually do it and to get more feedback and to see if people will really pay for it. And then just the, this whole cycle of continuous innovation, continuously analyzing, designing, building, testing, marketing, as quickly as you can with a whole lot of small bets. You might, as an entrepreneur have your own vision of where things can go, but you actually might be wrong about what people want. In fact there’s nothing more certain than you are at least partially wrong about where the market is and what they want. So the key thing is to have your vision, but then make a whole lot of bets to learn whether you’re on the right track or not. And then to take that feedback to go to where the opportunity is.
Shane: Yeah. So let’s take that 50 million versus 20,000. I know somebody that’s working in a innovation space in the large government department and she’s one of the few people I know that have actually put in a process around how to experiment from an innovation point of view in a large government organization.
And when there is, there’s a $20,000 investment, a small bet, the process for getting agreement to do that small bet is relatively small versus, a 50 million investment in a large piece of work. I’m assuming you can’t take a 50 million project and break it down into how many 20,000 pieces of work that it takes. So there’s some constraint on how many of those can have, or either a natural constraint with the people involved or a an actual rules-based constraint. And it seems to be working really well.
Another organization that I’m working with, we wanna do some early tests. We have some theories on some technology, but, we’ve read all the documentation and it looks like they’re okay, but, we don’t know what else has done it this way. We wanna do a little bit of a proof, we want to do some early testing to make sure before we double down on it, it actually does what we think it will. Now to get that work done to get the contract signed for that piece of work and that work, let’s just say it’s $20,000. It’s weeks to months, so when we do innovation, we have to take systems thinking. We have to unblock things so that they can be fast and that we can manage and deliver them that way while still managing the risks that we want to manage.
So we have to be very clear on what risks are we trying to manage now. So yeah, $20,000 pieces of work are great as long as they really are quick, fast, $20,000 pieces of work, not six months of contract negotiation.
Murray: Yeah, that’s a good point. I am really interested in getting involved with startups and helping startups because it just seems to be such a natural fit with Agile and design thinking and the whole Lean startup movement. And also from a personal view, it’s just much more interesting and much more opportunities to do more challenging things. In the corporate world it’s all politics as to who gets the opportunities. I think it would be very interesting to get involved with helping startups. I was wondering what you thought about that, Shane, cuz you were involved in startups right now.
Shane: Startups are hard. You have so many more worries compared to a corporate piece of work. All your safety nets are gone. All the things that are givens are no longer givens. You don’t have a natural customer when you’re in a startup. When you’re in a corporate you know who your users are. You can go and demand, they be your customer. And a startup, you worry about how you gonna pay the bills, and a corporate, everybody gets paid. And a startup, sometimes it’s your house. In a corporate it’s just waiting for your next role. That’s a really interesting question, actually. I might have to do a blog on the difference.
What would Nirvana be? Nirvana would be to be an internal startup that changed the face of that organization. But, you get told that’s the case and it’s not actually true because the organization can’t wear the risk and disruption. So yeah, startup are fun, but man, my experience, they’re hard. What I’d be really interested in is whether anybody’s done a study. So let’s take Canva. I’m a guessing, when they were small, when they were 10 people, they were innovative.
Shane: When I was at zero, there were only 20 or 30 people and we were on the same floor in the same building. I was late to the party. There were the people I know from those days, they were what we call the top seven. The people that started it up in an apartment cuz they didn’t wanna buy office space. How about that for innovation, they took a residential lease out on an apartment and used it as an office cuz it was cheaper. What was the risk? I don’t think they were actually allowed to do it, but hey, you know what was gonna happen?
So I still know some people that work at Xero and it sounds like it’s a large corporate now, there’s hierarchies. You, you look at the jobs they’re putting out, it’s VP of that, or general manager of that, and product manager of product managers of that. Yeah, it’d be interesting to see how innovative they are now they’ve scaled. Is innovation truly a small company thing? Are Airbnb and Uber and Netflix, are they still innovative or not?
Murray: I think they can be, Steve Jobs seemed very innovative with Apple. Amazon and aws. Elon Musk seems very innovative with his companies. Having a leader who’s committed to innovation and who is willing to put a lot of money and support and, accept risks and accept things that don’t work seems to make all the difference.
Shane: So I remember reading Steve Jobs’s biography.
Shane: it didn’t paint him as a nice person to work for.
Murray: He could be a real jerk. A lot of the time. People said,
Shane: If I go back to my GE example, I’m assuming that the sales team were pretty innovative to keep their job.
Murray: I wanna make a counter argument to that. I think that when you say you’re gonna fire 20% of people every year, they get frightened and they stop innovating and they focus on things that are low risk.
Shane: Yeah, it’s interesting. I was watching the US Open and we had the 75th seed and the hundred and 50th seed come through which was unexpected. And one of the commentators said the difference between an experienced player who’s been here before and inexperienced players like these is an inexperienced player, will start playing it safe because they’re worried that, they’re gonna drop the shots and go back and not take the match. An experienced player will double down and be more aggressive and more risky because this is the time to make it.
Murray: What do you think about this idea of psychological safety that we hear a lot about in the agile community. That you need to provide a safe space for people so that they can take the personal risk of raising, problems and, coming up with solutions to solve them.
Shane: So if you look at those TV shows like Shark Tank or you go to some of the startup pitches, five companies go and pitch for $10,000. One of the questions that they’ll often ask them is whether the founders of those companies, their startup, Are a hundred percent on the company, or they got a side gig that’s paying the bills. And if you got a side gig that’s paying the bills, you get frowned upon because you’re not risking it all. You’re not that hungry. You’ve always got an out clause. So you’re not safe. That’s what they want. They want you in a place where there is no safety because you’re gonna do whatever it takes to hustle, to make it work.
Murray: Yeah. But also you are gonna be vulnerable to predatory venture capital.
Shane: Yeah. So everybody should be in a safe space, shouldn’t they? But maybe, if you are safe, you’re not gonna change. It comes back to what we said, war and famine. And disease. They force us to be innovative because if we don’t, we are in a really horrible position. That’s what drives innovation. The need to have to change. If we are comfortable and safe, maybe we never will. That’s evolution.
Murray: Why are you doing a startup?
Shane: Cause I’ve always wanted to do one.
Murray: Okay. How do you feel about it now?
Shane: I’ve played in this area before. I know how hard it is. There’s a problem that we know about cuz we’ve experienced this problem for 20 or 30 years. We’ve found a way to solve it that other people haven’t. Other people have done it like this, just not the way we’re exactly doing it. I think there is a wave we’re gonna hit where we’re gonna be in the right place at the right time. And lucky, after a lot of planning. And I believe this will enable me to do something that fills my boots and excites me.
Murray: Yeah, that makes a lot of sense. And you and your partner are both, working on other gigs to fund it, aren’t you?
Shane: So we’re both of an age and we have commitments where we can’t, we won’t risk at all. Advice I always give people when they’re in their twenties, you can live on two minute noodles. You shouldn’t have to, but now’s the time to go and be innovative and risk at all. Cuz you got nothing to lose.
Murray: but then you dunno what you’re doing either.
Shane: You get to your forties, your fifties, you’ve got so many commitments. Are you gonna risk at all or not?
Murray: I read that the average age for somebody starting a new business is 47.
Shane: I think there, there is a lot of people in their forties and fifties that take their redundancy money or their life savings . Use that to experiment with something they always wanted to do. And I think that’s where that number comes from. But again, no idea, cuz I’d haven’t seen the data and I haven’t done the analysis. I’m just, gut feel based on some people I know that happens a lot.
Murray: I’d be very interested in offering my assistance to anybody who is doing a startup who listens to this. I’m happy to provide some advice maybe to, for free to start with just because, I’m very interested in getting involved in sort of space. So if you’re listening and you want some help, you can contact me.
Shane: I think a better call out would be if you’re a big C. and you basically want to innovate using a data op a black ops approach. Get you to go in, remove all the barriers and constraints, and allow you to actually innovate within that organization as a startup. Do it right. Take all the things we’ve talked about today, take the things that stop it, get rid of them, the things that enable it, empower you to do it. And then yeah, do the startup from within one of those large corporates.
Murray: I definitely could do that cause I’ve run, large cross-functional teams that have everybody in it that you need to design and develop a product and take it to market. And I’d be very happy to do that for a big corporate. But it needs, serious commitment and serious senior executive protection cuz people within the organization are all gonna start shooting at you at the moment that things don’t go exactly to plan. If anybody’s in that situation, contact me. I’ll set up a whole kick ass digital product development team for you.
Shane: And based on the conversation today, we should take the VC approach, they should actually fund you to do it 20 times on the theory that two of them will stick.
Murray: yeah. Like an internal Y Combinator. That would be the ideal way to go.
Murray: I think when we come back to the no nonsense side of things, that’s our angle, isn’t it? There’s an enormous amount of fakery in the innovation space, particularly within corporates. I’ve done hackathons, I think they’re rubbish. People shouldn’t do. Innovation hubs set up by big consulting companies don’t seem to achieve anything. But I think there is the possibility of actually really doing it properly though with an internal why Combinator type of thing, if management are really serious about it and provide some serious funding and support.
Shane: Yeah. I think in summary for me, I often talk about Agiles not ad hoc. So using your terms, I’m gonna say innovations not theater , I’ve got quite a bit of experience working with teams and organizations to adopt an agile mindset without being ad hoc. I don’t believe I have a lot of experience doing innovation in a corporate without theater, but there must be people out there that are codified who are good at it. And so therefore, as you should always bring an agile coach in to help you on your journey, you probably need to bring in innovation coach.
First thing you gotta do is write a book . And on that note, I think we’ll call it quits. Yeah,
Murray: Thanks for that chain.
Shane: Catch you later.
Murray: That was a no nonsense. Agile podcast from Murray Robinson and Shane Gibson. If you’d like help to build great teams that create high value digital products and services, contact Murray evolve.co. That’s evolve. With a zero. Thanks for listening.