Corporate venture-building has drifted too far from the core business in an attempt to emulate startups and explore untapped markets. This approach often neglects the inherent advantages of large enterprises, resulting in elusive innovation ROI and struggling venture-building efforts.
In response, forward-thinking companies are rediscovering the value of the “Spin-In” approach. By staying closer to their core businesses and experimenting in adjacent markets, these companies leverage their existing strengths while maintaining enough independence to foster innovation. At Peer Insight, “The Science of the Spin-In” provides a balanced approach, offering autonomy for early success while ensuring strong ties to core advantages for profitable integration.
Key insights from this webcast include:
- ROI — Companies that leverage core strengths can improve innovation success rates threefold.
- Balance — Mimicking startups can be misguided and undermine Spin-Ins; a balanced approach is essential.
- Flexibility — Partnerships should function like plug-ins: temporary and opportunistic. Permanence and complexity can impact value creation.
- Options — There are six potential exit strategies for corporate innovation, yet many teams are unaware of them or their best option.
To watch the webcast replay, click “play” above. You can also download the slides at the link below.
Here are seven key highlights from the webcast transcript on spin-ins as a strategy for corporate ventures:
- Definition and Relevance of Spin-ins: A spin-in is defined as a growth opportunity for a large enterprise that leverages both existing and new capabilities. Spin-ins are increasingly important as companies recognize the strategic advantage of utilizing internal assets to drive innovation while avoiding the external risks associated with spin-outs.
- Shift from Spin-outs to Spin-ins: The speakers noted a shift in corporate innovation strategies. In the past decade, venture building focused heavily on externalization (spin-outs). However, there is now a growing recognition of the internal strengths companies possess, making spin-ins a more attractive option for leveraging these advantages.
- Nike Case Study: The webcast explored the Nike accelerator’s approach to spin-ins, contrasting two projects: an augmented reality stadium experience (a transformational but disconnected innovation) and a cyclical shoe subscription service for kids (closer to Nike’s core business). The shoe subscription had a clearer connection to Nike’s assets, making it a stronger candidate for a spin-in.
- Importance of Leveraging Corporate Assets: One of the key benefits of spin-ins is the ability to tap into a company’s unique assets, such as brand, distribution networks, or internal data. These assets give a corporate spin-in an “unfair advantage” over traditional startups, accelerating growth and increasing the odds of success.
- Partnerships in Spin-ins: Partnerships play a crucial role in the spin-in model. By collaborating with startups or smaller companies, corporations can temporarily “borrow” capabilities without the long-term commitment required by traditional partnerships or acquisitions, speeding up market entry and minimizing risk.
- Stage-based Funding and Metrics: Like venture capital investments, spin-ins require stage-based funding. Success metrics should focus on validating assumptions through milestone achievements and “tripwires” that signal whether the project is on track or needs reevaluation. This disciplined approach helps avoid resource waste on underperforming projects.
- Challenges of Internal Integration: Successfully transitioning a spin-in from incubation to integration within a corporation requires thoughtful planning. It’s essential to conduct internal experiments and gather data to ensure the business can absorb the innovation. The key is not to rush this process, as forcing premature integration can stifle the new venture’s potential.
Speaker Bios
Clay Maxwell, Managing Partner, Peer Insight
An expert in corporate innovation and entrepreneurship, Clay has spearheaded complex new growth initiatives, designed innovation systems and structures, and advised corporate leaders and entrepreneurs on all aspects of disruption strategy. From enterprise SaaS to fintech and digital health, Clay has led a multitude of product, service and experience design projects. In so doing, he has worked with and built businesses for the likes of Intel, Nike, Fidelity, Kimberly-Clark, DTE Energy, Capital Group, Baker McKenzie, Goodyear, AARP and the NIH. He founded PX Venture Studio and serves as Managing Partner of Peer Insight + PX.
Clay is also an active investor, advisor and board member to a number of startups and holds an undergraduate degree from Duke University.
Josh Clayton, Partner, Peer Insight
With a background in launching startups and building new ventures inside organizations, Josh thrives on designing new products and services and seeing them through to their first dollar of revenue. As Partner at Peer Insight, Josh has accelerated growth initiatives with clients as varied as Johnson & Johnson, AARP, The Capital Group, Baker McKenzie, The Project Management Institute, Canon, Expeditors, Leading Educators, Goodyear, and more. At Peer Insight, Josh has worked both upstream, helping companies develop and explore an innovation portfolio, and downstream, leading efforts to build MVPs and find market traction. Before joining Peer Insight, he was the Director of Innovation and Design at iMentor, a national, non-profit organization, where he designed and incubated new products and services before scaling them at iMentor and to partner organizations. This intreprenuerial role provided Josh with deep insight into the complexity of standing up new initiatives within an existing organization and network. Josh has a BS in Business Administration from the University of Missouri and an MFA from Rutgers University.
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