Grow Digital Revenue with an Ecosystem Innovation Fund
About the Book
Innovation Casino describes how a large firm can grow digital revenue by funding startups to build new products and services on its platform. Large firms often struggle to invest in innovation because of their complex, internal organization. As a result, they can only make a few bets on innovation, and the likelihood that those bets will pay off is small. One way to bypass these organizational roadblocks is to transform a large firm’s core product into a digital ecosystem. Much like the App Store on the Apple iPhone, a digital ecosystem can give a large firm the opportunity to participate in thousands of bets on innovation produced by outside firms—rather than trying to innovate by itself. By doing so, large firms are more likely to succeed because they are playing the “house” side of the innovation casino, rather than the players’ side. (The term “innovation casino” is a metaphor for the odds of generating financial returns from innovation.)
The challenge in building a digital ecosystem is growing the network effects between outside developers and customers who use your platform. This book proposes a way to jumpstart network effects by combining open innovation with seed funding so that outside companies—not internal teams—build new products and services that give customers more reasons to use your platform. Such a seed fund would transfer the approach of the US government’s Small Business Innovation Program (SBIR) to venture capital. As a grant program, SBIR is missing a way to generate returns. Venture capital fills this gap by making equity investments and raising capital from outside investors. To describe such a hybrid fund, this book introduces the term “ecosystem innovation fund,” or EIF. A large company with an EIF can become the house in the innovation casino by funding startups in its ecosystem with outside capital, returning principal from these investments, and delivering gains from its stock price. Innovation Casino weaves these strategies together for business leaders seeking an advantage in the platform economy.
This book is for leaders of medium and large organizations in the following roles: C-Suite, Research and Development, Corporate Strategy, Product, and Marketing.
About the Author
Publisher: Founder Friendly Standard (Dec. 8, 2020)
Length: 118 pages
ISBN: 979-8697273838 (Paperback)
Business & Economics > Corporate Finance > Venture Capital
Business & Economics > Organizational Development
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