innovation

Innovation Casino book summary

In December 2020, I published Innovation Casino, a book about how medium-sized and large enterprises can use corporate venture capital (CVC) to grow their digital ecosystems. Here, you can read a chapter-by-chapter summary.

Innovation Casino, a book about innovation funding

What’s in it for me? Beat the odds with CVC for digital ecosystems.

The book, Innovation Casino, uses its self-titled metaphor to describe the odds of generating financial returns from innovation so you can beat them. For decades, vertically integrated firms have made high-stakes bets on innovation. However, in the innovation casino, it is the players who bet big. Players think they will beat the odds, but few do. By taking a fresh look at your odds, you can retool your approach to win more frequently just as the house does in a casino.

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Companies invest 4x more in M&A than R&D in the USA

I’ve been zooming out to gain a broader perspective of how finance and innovation interact in the economy for my work with the #FounderFriendlyStandard.

I asked the question: How much more money do companies invest in mergers & acquisitions (M&A) than in research and development (R&D)?

Here is the statistic that I found:

Graph showing corporate investments in R&D vs. M&A from 2008 to 2016
This graph shows that between years 2008 and 2016, companies invested 4x more money in mergers and acquisitions (M&A) than in research and development (R&D) in the United States.

The above stat comes from merging two data sources.

The first data source is Mergers & Acquisitions United States from the Institute for Mergers, Acquisitions, and Alliances (IMAA).

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If you build it they’ll come moments

Baseball field at night being built

Baseball field at night being built

Lowell McAdam, the CEO of Verizon, told analysts, “This is going to be one of those if-you-build-it-they’ll-come moments…” He was explaining at the JP Morgan Technology, Media and Telecom conference why Verizon plans to keep investing in microcells and attaching them to buildings.

It’s the same reason John Donovan told analysts at the Citi Technology, Media and Telecommunications Conference why AT&T was boosting its network capacity. When network speeds get faster, new technologies spring up to consume that speed. According to Donovan, “5G is different because its performance is so much better that it’s going to enable a whole bunch of new-to-the-world use cases, whether it’s live maps, autonomous cars, virtual reality.” We are indeed witnessing an if-you-build-it-they’ll-come moment for telecom.

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