An Entrepreneurs Unfiltered Take on Corporate Innovation

first of all, before we get into it, um, how are you and where do we find you today?

Hi, Jacob. I am, I'm great, thanks. I'm very good. I'm very good. You find me in, in London and specifically Hackney in East London. So the most unfiltered thing here is probably the, the natural wine that everyone seems to be drinking these days.

Amazing. Classic Hackney. Thanks, Sean. Sean, look, you've got a pretty unique perspective, right, I think, on corporate innovation. I'm so excited to have you as a guest because You've worn these 2 hats, right? You've worn the hat of the startup entrepreneur, something that corporates want to and sort of try to mimic the behaviors and characteristics of sort of founders. We often hear corporate innovation teams being told to sort of be more startup, whatever that means. But you've also worn the hat of the sort of corporate employee. And I guess I would wager, you know, I've been working in this field for a long time now that, you know, the vast majority of corporate innovators that I've worked with do not have a background in sort of entrepreneurship and sort of new venture creation. And so really the place that I want to start is to understand, as someone that has worn both hats, you know, what are the big sort of pros and cons as you see them of building ventures inside an established company Versus sort of doing it out in the wild?

Yeah, that's a big question. I think it's, I would say the main, I mean, first of all, I would say they're 2 very different things because if we go back to just even the fundamentals of risk, when you create something yourself and you give up your job, you tell your partner, if you're lucky enough to have one, that That, right, we're gonna half our salary for the next, like, hopefully 6 months, 12 months. You're gonna make sure you pay your mortgage. You have to work out all your finances. It's not really an individual decision that's kind of made very lightly. And sometimes you actually have to be in a kind of more fortunate position to be even able to take that leap. So fundamentally, when you mentioned the word like skin in the game, it's more than just your own skin. It can be a lot people, your friends, your family. So that first step is very different to applying for a job, going through a couple of interviews, getting a job, and then after the first month, they just give you money. So even from that kind of first step, it's a very different approach to how you've— the foundations are completely different. And you start that first step not lightly, right? You don't have that conversation with your significant other and you don't take that risk if you don't fundamentally believe that what you're gonna do is gonna be exceptional. And you basically take your first step with a vision that is far bigger than anything you can achieve. And one of the things that I think is actually really similar in both is you, when you're doing a new venture within a corporate, you don't have so much of the personal risk, but you do have the risk of stakeholders within the business. You have the expectation that Right? This team's the innovation team, and they're gonna do all these amazing things. But the thing we always do in both a startup and a corporate is you really overestimate what you can do in a year, and you really underestimate what you can do in 10. And that is something that happens in both. And sometimes in the corporate side of things, you tend to kind of over-egg that a bit because you're like, we have to show results, we have to do this. And it's sometimes, you forget that Yeah, but in 10 times, if this is 100, in 10 years, if this is 100 times bigger, like, think of the upside. And that's something that when you're in a startup and you run your own business, you're always thinking of the upside. Like, all of those sleepless nights are about the upside. And sometimes in the corporate innovation side of things, you forget that and you think about, it becomes short-term very quickly, which is something you never ever lose. when you're running your own startup.

That's a really interesting point on risk. And I guess in large part, Sean, do you think that that's because of the way that ventures in the wild versus ventures within corporates are funded? One of the things that we've observed, particularly over the last 2 or 3 years, is I guess the sacrifice Is it corporate sacrifice, sort of the true exploration of the future in favor of sort of short-term wins and short-term gains? But is that, is that to do with the way that ventures are funded, right? Like in the wild, you're working on sort of milestone-based funding, um, you know, pressure from investors on short-term results. So, you know, they're not expecting short-term results. Is that where you've put the difference down to?

Well, I think it's, there's a number of things, but if we strip it back to purely, if you think of it just purely from a financial point of view, when a VC invests in a startup, they look at the kind of exponential returns and the kind of the fact that that investment could return the whole cost of their fund. So they kind of work on this power law that one investment will return that whole fund. So It's a very different approach to a CEO or a C-suite of a corporate company. They don't think of it like that. They don't look at the product innovation and think like, could that be worth more than this whole company? So it's like from a fundamental structure, it's totally different because you're looking at power laws on one side and the other side, you just, you aren't looking at the same sort of return model. So it's a very different structure and it's something that I often think about is how And I must admit, I forgot to kind of do my little disclaimer before. These are all my own personal opinions and not the opinions of my employer. I should caveat all of this is that the way that you look at the structure and giving that, the financing model you mentioned, kind of funding within corporates, they aren't looking for that power law return, right? That, so you're kind of, which is really interesting because sometimes when you actually create things within the corporate environment and you Again, another difference is you start one company with one vision. When you're inside a corporate and an innovator or a venture studio like ourselves, we have a pipeline. We have a pipeline coming through. We're trying to solve business problems. We're building squads across the business with experts in different fields. But what you don't have when you do that is focus. You don't have pure focus on execution, which you do have when you work on one vision. And that's why I think a lot of the most successful companies kind of, they align that long-term vision of the company with that focus on what are these kind of the most innovative minds in the business, what are they working on? And it's about making sure that's tied to the long-term vision so it doesn't get in the way of the day-to-day. But that's an art more than a science, I think. And I'm not sure anyone's really cracked it quite yet.

So having been sort of both sides of the fence, I mean, we talked about one of the pros, I guess, of sort of building inside an established company being that risk is still present, but it's a different and potentially less fatal kind of risk building inside companies. The trade-off is that we're not looking for sort of 100x or 10x returns. What are some of the other Sort of pros and cons, as you see it, of building it inside an established company versus out in the wild, having done both?

I think that the pros of building internally is, look, you get, and especially for me, you work across kind of multiple products with different experts, different technologies. You have really interesting conversations on a daily basis. You work on solving multiple problems and looking for multiple opportunities. at the same time. So from that vein, it's much more interesting, if I can kind of put it that way. You kind of come across a lot of opportunity and sometimes you find things that you truly believe in and then it becomes really about like, okay, how do I champion this? Like, how do we get buy-in for this idea or this opportunity? I think sometimes the kind of flip side of that can be that what you might see a venture studio that you're like, okay, is this a feature? Is it a product? I don't know, like, is it a multimillion-pound idea in the 1-year versus 10-year kind of timescale? And if you're on the outside and you look at, okay, that's a £2 million idea in a relatively untapped market, that becomes an opportunity for you to go after. But sometimes if it's not that, if it doesn't align with that core strategy piece, then it won't be a focus for the business, right? So sometimes you just have to look for the the specific opportunities in those large enough areas. And I think a conversation we often have is what we're working on, a feature or is it a product? And I think that's always a really interesting thing inside a company because when it's a feature, like what does it apply to when you have multiple products and multiple business units in different geographies and how do you get to scale and what is the actual advantage of what we're building? I think the thing when you're a founder, is a lot of times you're creating a, you're solving a problem. And if you think of the best founders, the best businesses, they often create their own market. So they kind of look at, I don't know, take Airbnb, right? Their TAM at the time they started the company would have been relatively small because nobody really did it, but they created a new market and they created this kind of beautiful marketplace dynamics where they actually made people make money from their houses that they were never doing before. And then they create a kind of lovely network effect. And when you think of that kind of market creation, that only happens if you apply the solution and you try it. Whereas lots of time it's trying to get to that point of execution, which can be difficult within larger companies. Because if you're trying to say we've got a £1 million opportunity, it depends. Is it really interesting? I'm not sure. depends on what the focus of the business is at the time.

Yeah, that's super interesting. Also, I guess, speaks to the fact that you're not operating in a greenfield, that there's an existing product set, there's an existing customer base, which I guess you could see as a huge advantage because the ability to deeply understand the problems of thousands, millions of customers is something that a startup would kill for, right, to get that close. But yeah, how do you make those decisions on, hang on a minute, what are we working on here? How do you make a decision on whether this is a feature of an existing product that exists within the business or whether it's a new business entirely?

Yeah, I mean, from within a corporate company, I think a lot of that is around one of the things I think I underestimated when I started in this role was the value of the network. And then that's the kind of people network I mean internally because you have to get a lot of buy-in. You really have to understand what's on different roadmaps where to see how things can fit. And you, in a very similar way to what you do when you're a founder, you build your business case. You try and show that there's movement. I mean, one of the things we always look at is like, what are the trends happening outside? Like, what's the market doing? What's happening in the startups? Like, who's getting investment? Like, where is money going? And we try and tell that story. And one of the things we always focus on when we pitch anything is like, what is our narrative? Like, what is our story? And if you watch some of the best startup founders, they pitch, you buy into them even when you're like, I don't know what you're talking about. Like, but I just, I want in. And it's kind of like trying to take some of that ethos where you're like, how do you make someone talk about ERP and finance software and be like, wow, like I want a part of that. And it's like, How do we take that? And if you take a feature, what if you apply a feature to 20 different countries with 20 different products, right? Like then you have like the economies of scale to apply that to and then it becomes really interesting. So your $1 million isn't a million, it could be $20 million and that could be how quickly can we get to that point. The thing is larger companies will always win on distribution. Not to slate Microsoft, but take Microsoft Teams and I used to have a company which did a similar thing. So this is probably not fair, but they had a really bad product for a really long time. But they won because it was inside the majority of people's computers. And that was it. They gradually got better at what they had and now they have like a pretty solid product which doesn't fall over that much. And like they really won on that distribution piece. And for us, a lot of the times it's about like how can we win at distribution and are we actually solving a real customer problem? And a lot of the times you don't get to that real customer problem until you put something in their hands. And you test it because what people say and what people do is really, really different. I used to run a business which was a food marketplace. So we worked with farmers on the supply side and we worked with food processors and supermarkets on the demand side. And one of the mistakes we made at the start was that the farmers, when we spoke to them, were like, yeah, we wanna be able to access it from our phones. We wanna be able to kind of get online at any point and do all these things. We were like, amazing. We built this platform, spent some money on it. We were like, great. It does all the features that they wanted to do and no one was using it. And then we realized it's because they didn't have any phone signal. They didn't have any 3G when they were in the fields. So then we had to like turn it around and put it on SMS. And then we started getting the uptake. And that was only when we were like, why is nobody using this? And then we started speaking to them. No, because it doesn't work. Like, what do you mean it doesn't work? And then we realized it's because they had phone signal, but down in deepest, darkest Kent, in the UK, this is in the UK, like you don't get very good 3G, 5G, any G. So we then realized like, oh right, when we kind of, we created it and tested it, we realized like, okay, that's not what they need, right? It might be what they want, but it's not what they need because they can't use it. And it's very similar to in a corporate where you have a real ability, you have customers already. One of the hardest fights when you're a startup is getting those first customers. The difference is like if you can build evangelists and you can build customers who believe in what you're doing, you get that feedback loop much tighter. So you accelerate faster and sometimes finding those customers can be difficult.

I mean, distribution is clearly sort of a huge advantage. How much of an advantage as well, having sort of been on both sides of the fence, is brand, right? I guess as a startup, you're fighting a lot of the time to establish credibility, not just with customers but with investors as well. How helpful have you found like the backing of the brand on the stuff that you're building?

Yeah, with what we do is extremely important because you're dealing with people's accounting, finance, HR, payroll. So for that, it's extremely important. I think on the outside world, it really depends on the product. Because it depends who your target audience is. If you're looking at millennials, do they, or not millennials anymore, Gen Z, sorry, showing my age.

We're the millennials now.

No, it's not us, it's not us, it's the other ones. Gen Z, then it's, does brand matter as much to them or are they looking for challenger brands? Like, then again, it comes down to the customer, like who's actually gonna use the solution. So for us, Internally, yeah, brand is extremely important. Trust is one of our main values. So making sure that we have everything is fundamentally built on trust is really, really important. And especially when you're dealing with people's money, it's even more so. I mean, you saw Revolut got in trouble for all the complaints and things they've been getting recently in the news. So it's really important because when you lose trust, it's really hard to get it back. Um, so there's a fine balance there.

And are you fundraising externally for the ventures that you're building in the studio? Uh, because I guess what one of the sort of other, I guess, sort of hypotheses that, that I've got is that, you know, as a startup founder, I, I, I think unless you've worn that hat, people really underestimate just how much time is sunk into fundraising, investor meetings, pitch decks. That's clearly a distraction that you don't have as part of a sort of corporate innovation team. But is that kind of canceled out by the amount of sort of stakeholder management that, you know, you need to do within the, within the organization? Do you, do you, or do you see that as a big advantage that you don't have this external distraction of, of fundraising?

Well, I, I think it's, it's kind of two different things, if I can kind of— and, and I, I know I'm maybe a bit contrary here, but I see running a startup and kind of being in a corporate venture studio is there is crossover, but they're 2 very different beasts. And part of that is because when you mentioned the kind of fundraising piece and for a startup, like for a period of time, that becomes the CEO's only job. So their only job becomes fundraising and that is really time consuming. It's really difficult. With our venture studio, we don't fundraise externally. We look for internal sponsorship and buy-in from internal kind of stakeholders. The difference I think is, how can I say it? The difference I think is that when you meet investors, your aim is always to, when you're a startup founder, is to very quickly get to a decision. The worst investor conversations you kind of get into is where people are just on the fence or they're not sure and they kind of go on and they go on and your bank balance is getting lower and lower and lower and you wanna get to a quick decision. And it's really similar in terms of inside a corporate, right? You just want decisions. One of the challenges within a corporate is there's actually, and this is a general comment, there's very few people who can really make big decisions. And it's about finding the right people who have the right belief and buy-in in what you're doing. And That's kind of the two sides of the same coin almost because a lot of the time you just get stuck in the conversation side of things. And most startups don't really die because someone else builds their product or there's competitors. It's mainly kind of suicide or suffocation, right? They just run out of steam. And it's a similar vein, right? You have to be ruthless when you're inside a corporate venture, like a venture studio like ours. If we aren't getting buy-in and no one's doing it, Like, okay, let's put it back on the shelf and let's find the time because one of the big things that people kind of discount is the timing of what you're doing. When you're a startup founder, the timing is the external market you're looking at. Paul Graham always talked about like you have to ride the wave, right? You don't wanna be before the wave, you don't wanna be after the wave, you wanna be on the wave, right? So you're looking for the wave, you're not looking for like what's happening in the market. And very similarly, when you're in a corporate, you're not only looking for that wave, But you're looking for like the company's focus at that point in time, right? So you're looking for like an internal wave plus an external wave. And a lot of times the internal wave is slightly behind the external wave, but you have to match that story. So it can become, you have almost like multiple challenges inside the corporate. But I think a lot of that is solved when you can align with the longer-term vision of the company. So if you can kind of pinpoint 5 years, 10 years in the future and say, look, yeah, but this will get us closer to over here, then that's a really important open conversation to make sure you have. It's like, I remember, what do you call him, Marc Andreessen used to talk about IBM and the wild ducks. I don't know if you've ever heard about, you know, the wild ducks from IBM. And like, that really worked like in the '70s and '80s because the access to information was like, it was sparse, right? Like you'd have to go to events, you'd have to meet people. So like, Your network was what was important, your individual personal network. And the wild ducks in IBM were allowed to focus on anything. They were just looking at new products, innovation. They weren't focused on the core. They were allowed to dress how they wanted. They didn't even have to wear suits. They could wear cowboy boots. And part of this, I was like, oh, that's amazing. Like, why doesn't it work now? And when I really thought about it, it's because the access to information, everyone has the same, right? Like search engines changed that. Generative AI has changed that. We all look for really easy ways to do things and not— it's very hard to find a niche. And we're always looking for like, right, what's the quick solution, right? What does strategizer say we should do to like solve this problem? And they don't know, like we don't know. You have to solve like the problem that you have internally, which is why like when you sit down and have conversations like we have in the past, right? It unlocks things in your mind when you think like, okay, right, like actually that doesn't apply here. We have to kind of try and kind of change the playing field and what we're trying to kind of sell into the business. So yeah, I think it's really interesting because we look for those comparisons, or I do anyway. And a lot of the times it's just that the last 20 years has changed completely, right? And the next 10 will be even more drastic, I think, with the movements of GenAI and different things.

So you've worn sort of both hats. What's interesting is that corporates talk all the time about, I mean, You know, I maybe go to three or four conferences a year, but at every conference, a consistent theme that emerges is, you know, how can we empower our teams within corporation X, Y, or Z to sort of be more startup? By be more startup, I think they mean, you know, faster. Yeah, basically. And what I guess what would you you know, having worn the sort of founder hat, what do you observe? And this is just a general sort of observation about corporate innovation in general. What do you observe that corporates are getting wrong in their efforts around corporate innovation?

I think kind of when I think of that risk point, and it's funny when we talk about risk, when you're a startup founder, you don't really think of it as risk because if you don't make a decision, that is making a decision, right? So when you don't make a decision, usually stuff breaks or nothing happens and that's bad. So you're always kind of forced into this, right? Okay, like let's make a decision and move on. If it's wrong, we'll go back, but you're always going slowly forward, if that makes sense. I think one of the things that I think corporates get wrong is they make that sound really easy. Right? Like when you said it there, like, oh yeah, of course. Yeah, that makes sense. Why doesn't everyone just take more risks and move faster? Because if everyone does that, everything changes. Your whole organization changes. All of a sudden, a lot of the stuff that normally works doesn't work anymore. Like, are you okay with that? Right? Because if people take more risk, there's gonna be more reward, but there's also gonna be more broken stuff. And I think this is something that kind of, I think of like this decision, my kind of decision-making framework is very simple. It's like, if something can be undone, just do it. Yeah. Like, just do it. It doesn't really matter, right? Like, if it's gonna have huge long-term impact and it's gonna affect customers directly and it's gonna be something extremely drastic, like end of life in your product, then don't do that. Like, just wait a minute. Like, let's make a more informed decision. But the thing about what you said about kind of like the risk, the decision-making, how fast people move, and what Zuckerberg used to say, like, move fast and break things. The thing about that is that that's a cultural thing. That's a— it's not like, it's not something you go into work and you're just like, okay, cool, I'm gonna today's the day, it's Tuesday, I'm gonna break some stuff. You have to, you have to like, that has to be part of the culture and culture comes from the leaders within any organization. Regardless of what people say, right? They get people into coaching and all this stuff. If you're leaders in your organization, and I don't mean managers, we mix up the term leaders and managers very much like in all corporations and in startups as well and investors and everything else. But when people lead and they take risk and you see them doing it, then you do it. You don't even think about it. It just happens. But if it's not coming from the top, and this is very difficult when you are a NASDAQ company or a FTSE 100 company because you have shareholders, you can't be, you can't be taking risk all the time, right? But you have to have, like, if you want to have that innate culture run through your organization, The company has to take risks, the leaders have to take risks, the managers have to take risks, everyone else will then take risks and it just trickles down. Like, it's a very cultural thing. And that, I think that's something that's often overlooked. Like, a lot of people talk about that as if it's just, why aren't we doing it? And like, because you can't just do it, you can't. It has to be, you have to lead and you have to show people and then they will follow.

Yeah, and it's kind of weird to have this sort of annexed— yeah, to have that expectation of this annexed team within the corporation. I have this expectation that their culture will be, you know, night and day to that of the core, that of the parent company. It's kind of a weird expectation to have.

Yeah, I mean, and that is possible, but like, what are they really going to achieve? Like, unless they're working on a subcategory that the company's making a bet that I don't know. I'm trying to think of like an alternative. Take Tesla working on a new battery or something that was top secret and they had this like little core group of people and this was gonna solve all these problems or SpaceX doing something similar. I don't know what they do, basically go to space. But what I mean is like, you can have that in isolation, but again, like how does it benefit the core product in the longer term or the core business in the longer term? Like when you, when you want You can have a high-performing team coming up with lots of ideas and proving out lots of concepts. But if there's no execution, it doesn't matter. It's just like what, it's just for show, right? Like, or I think it is. I think it looks great. It sounds great. People talk about it at conferences, but like what actually comes of it, right? Like, whereas if you can get your organization performing with that sort of mentality, then I think you see movement. Because to me, it's like, and this is something that Sage does really well, right? Like, they empower everyone to kind of try and be innovative and be more innovative and take risk, right? Be higher performing. And we now work across more and more teams, right, within the product organization, within different parts of the business units, because that's where we can add more value. It's not being really isolated on our own, doing lots of really fun, cool stuff. Then, like, where does it go after that, right?

Yeah, yeah, yeah, yeah. It's incredible how, uh, just the shift I think that we've seen over the last few years from this sort of centralized, like, decentralized sort of networked model. And I'd argue that the latter, and, you know, the model that you're employing, is, is a lot more successful, right? Because it's impossible to get anything done as part of a larger organization if you're kind of on, on an island sort of removed from the people that are going to back, fund, sponsor, sell in the stuff that you're building. You talked earlier about sort of looking at where capital was flowing, looking at trends in sort of the private markets and looking at the types of value propositions, types of business models, types of technologies that are getting funded. When you're sort of looking at a corporate, you're looking at the business model and thinking about sort of some of the core assets that exist within that corporate. What do you think that most— we talked about distribution, for example, but what are the assets that you think have got the most untapped potential for sort of driving innovation within corporates that perhaps corporates aren't really looking at, but as an entrepreneur or sort of founder, you kind of take a slightly different view on? Where do you think corporates should be looking for growth That they're not looking now?

Good question. My first thing that popped into my head was people, actually. And I'm not like, there's a better answer somewhere when I find a chance to think about it. But I think people like you're, if you think of the distribution to customers, like if I go back to the point we were just talking about where that kind of untapped potential where if you could get And I'm not to sound like a slave driver, but if you can get people to kind of outperform by an extra 10% or an extra, like, feel that little bit more inspired, feel like everyone's innovating, everyone's kind of playing their part, like, I reckon that's a pretty huge compounded effect. Like, if you can drive that motivation and buy-in from your people, and I think that's really important. Like, when people feel valued and they see their results the results of the work that they do in the kind of new and innovative products, right? Like, this isn't just some siloed team. Like, but when other people are part of that, and that we often see this actually within our team, when we assemble squads to work on specific products, people are really excited to work on the stuff that we're working on. And you can genuinely tangibly feel it. And people want to be part of the squads. And then when we have another squad, they want to be part of it again. And it's kind of like, if you can I think get that kind of, if you can inspire people to perform that little bit more, I think the compounded effect on the organization would be astounding. And I think it's a lot more difficult than just saying, why can't we be more startup? Because that's not a thing.

And when you, what do you think are some of the sort of invisible, we've talked about sort of people, but what do you think are some of the sort of invisible barriers to innovation within sort of big corporates that for a founder coming in sort of fresh, yeah, are like glaringly obvious? Like, what are the things that, you know, from other corporate innovators that you, that you talk to, just general trends, there's things that you would like to sort of knock down or barriers that you would like to be able to, I guess, safely remove, right? Not, not remove at the expense of the core business, but sort of safely remove. What, what, what would those be, Sean?

So I think execution is a core point, right? You see a lot of innovation teams who don't have the ability to execute completely on a product or solution. So they'll get things to a certain point and then it becomes a point of buying and selling into the other areas of the business. There's a point where you can kind of safely validate from researching something.

Hmm.

And there's a point when like the farmers, the example I gave earlier, until you put it in someone's hands and see what they do, then it's very difficult to see that. And this is, we, one other company kind of with a corporate innovation, which was completely separate, but they were linked to the core, but they had kind of end-to-end capabilities. They were almost like a separate company and they did things that was, it was just amazing because they could properly build test, iterate, kill, like sell, like they operated almost like a little, like a kind of individual venture, but they were part of a massive, massive bank company. And having that ability to actually execute and create the products, I think is something that a lot of companies kind of miss out on because you get to a point where you de-risk something, you show a massive opportunity and then it becomes about selling in and networking. Whereas if you can actually show, look, we've got 1,000 customers using this product and then you can compare it to the customers using other products and then you can show the revenue that's coming in from this product. That's a very, very different conversation than if you're, if you just have the kind of conceptual ideas.

Why do you think that there is this adverseness to action, right? You know, founders have a bias for action. Why do you think this adverseness to action exists within corporates?

Because you already have products, you already have your moneymakers, right? Like you already have, when you're a startup founder, you don't have anything. The only thing you're trying to do is get customers for this new product. Whereas immediately when you're inside a company, there's already focus on many, many different things. And this is the same with a lot of founders you'll meet as well, right? Like the magpie effect where they just cannot keep their head down. They see a shiny thing and they're like, right, let's get GenAI in the product. Let's get something else in the product. Let's do this. Let's quantum computing. Let's do this. And then they never really focus on the problem that they're solving for that core customer. And it goes back to that point of the vision before, right? Like, if you can, the challenge is you have hundreds of millions and billions of pounds flowing in already. So are you gonna jeopardize that?

Hmm.

Like, it's massively simple for me because I'm like, yeah, sure, why not? But at the end of the day, right, not my decision. So it's, the difference is you're competing for mindshare of those customers already. You're competing for engineers, you're competing for time, just time in people's diaries sometimes, right? It's not the same drive, right? Your company's drive isn't to create new products, it's not to create new businesses. They may wanna be innovative. Every company wants to be innovative, but their sole purpose is not to create the solution that you're working on and solve the problem that you found. When you're a founder, that's your only purpose.

That's a really, really interesting way of, yeah, A, thinking about it and B, yeah, B, framing it as well. Yeah, really interesting. And in terms of You know, we saw one of the sort of stats earlier, and something that we sort of hear quite a lot from leaders is that they are just at the very early stages, the, the front end of sort of innovation, that they— a lot of leaders feel like their organizations are quite bad at, um, sort of identifying and acting on sort of new emerging opportunities. Let's take I don't know, let's say AI as an example. Haven't seen corporates building a huge amount of anything sort of interesting in the space. How can they become better at that? Because if there's one thing that entrepreneurs are really, really good at, it's riding the wave, right? Like just being on the crest of that at the right time that allows sort of capital to flow in, hopefully generates interest from sort of customers, allows you to build a great company. Why do you think large corporations are so slow to new and emerging opportunities, and what can they do to fix that?

I mean, if we take AI specifically, that's something that Sage have actually done really well. They've had AI labs up for kind of 7 years. When we spoke about that kind of like side department, Sage have that in the States. So when the kind of GenAI movement came about, they were actually able to move really, really quickly on implementing those solutions. And we have, they have hundreds of kind of solutions internally in the products that customers would never even know that are there, things like fraud detection and different things like that. So there's a huge amount of that that happens. I think the mistake a lot of founders make, which I've made before, right, is like you try and sell the sexy technology, not the problem or the solution you're trying to solve or what your customers are doing, right? Like, so when GenAI came about, every pitch deck an investor receives has GenAI in it, even when there's no place in there in the solution, right? Like, but it becomes the thing. It was, it's the same when AI came about before GenAI, it was everything was AI. If you had a cake shop, it was like aicakes.com, right? And it didn't really do anything, but it just became the way of doing it. I think with corporates, The challenge is like Sage was in a really good place with AI because they'd spent 6 years with like, I think, a team of over 60 engineers working on that piece. It's not something you can just hire in a team of 60 people overnight and say, okay, we're gonna implement this technology. A lot of that technology is also, it's not available as a service quite yet. So it's harder for techno, for larger companies to roll that out because again, You plug something like that into an existing product, what happens? Who knows, right? Like, does anyone use it? Does it break the product? Like, so there's lots of questions that I think it's not as easy for a corporate to do that unless they've been working on it. I think it's, and a lot of these, when these things come out in the press, I think they're quite often oversimplified and overhyped at the start. And you kind of have to wait till the kind of the curve drops on the other side a little bit and give yourself time to kind of find out like, does this matter to me? Like, do we need it? Should we have it? And I think that's a really important question to ask, right? Like, because if, does every corporate need to implement every technology that comes out? Like, I don't know, it has to be relevant to their to their business. But it's, yeah, it's the old like moving a tanker ship versus moving a speedboat analogy, right? Like speedboats can turn really fast, tankers can't.

So corporate innovation has had, I think, sort of broadly speaking, quite a tough sort of 12 months, huge amount of uncertainty geopolitically, bit of a weird sort of economic environment for anyone probably outside of the US where things just seem to sort of chug along as normal. A huge amount of sort of short-term pressure from shareholders on delivering more sort of immediate returns. We've seen sort of Walmart Store Number 8 go by the wayside, Ford shutting down their sort of centralized unit. How do you think over the next few years corporate innovation not necessarily is going to change, but how do you think corporate innovation is going to have to change over the next a few years in response to what we're up against externally?

I think it's gonna have to open up. I think, like, we often talk internally about kind of open innovation and how we can work more with research institutes, startups, like universities. Like, I think that's gonna be crucial. I mean, we've seen a huge benefit from us working cross-functionally across products and business units internally, right? Like, even from the indirect effects of working with our team, just having different methodologies, doing things fast, like making decisions quickly, you kind of see like a change in people's kind of mood a bit, right? Like they're like, actually, this is exciting. And like, I think when you bring in founders or you bring in the latest technology, I'm not talking about generative AI, I'm talking about like, I don't know, like something interesting that's happening where there's some money going around just now, like quantum computing, where in 10 years' time, if that breaks through, that will be Fundamentally, it will shift the way we operate. It will shift the way AI, right? Like, so when I'm, when I think of these waves, I think of like, like that, that's a wave that's gonna come. You might be too early, you might be too late, but if you can make that wave, that's gonna enable generative AI to, to power like hugely complicated kind of algorithms there. When we look at like the new technologies from energy, right? Like you, you look at Google buying up and investing in nuclear power, right? You look at Amazon, they're buying these kind of technologies to power their data centers. So you're kind of looking at, right, like what's powering the future rather than what's enabling is what I'm kind of trying to say. And I think that comes from opening up.

I saw a story in the FT today about BlackRock investing quite heavily in brickmakers, for example, in the UK, given that the UK government is on a big sort of housebuilding mission. Yes, selling shovels in a gold rush, right?

That's it.

That's the analogy.

That's the one. Yes. Yeah. But to me, I think it's about opening up, right? Like, I think that's when you really learn. It's from the conversations you have. It's from the people who have the fresh ideas. It's from like the collaboration. To me, that's always been the best way. And even when you're a founder, you meet some founders who are when you're a first-time founder, you often protect your idea. You think it's the best thing in the world. You think everyone's gonna steal it. But then you realize, like, when you're on your second or third company, you're like, nobody cares. Like, nobody genuinely cares about this idea as much as I do. So it doesn't matter who knows about it because every conversation you have, you learn something, you kind of get, you get some feedback and then you gradually get better and better and better. And that over time is that compounded growth makes you feel unstoppable, right? You can move faster. And I think that's the same for corporates, right? It's something we feel really strongly about at Sage, right? Like, how do we have that powerhouse in the Northeast where we can have this kind of open innovation facility work with the opportunities? We want to be a leader in AI, right? Like, let's do it. Let's like invest in the research institutes. Let's like kind of see where the solutions are coming from in the future. And I think that's where the opportunities are really, really gonna be. I think if you kind of hunker down and just try and ride it out, time will pass you by.

And to wrap up, Sean, and kind of on the same theme, if you were gonna kind of rip up the rulebook on corporate innovation, if there is a rulebook, I guess there isn't a rulebook, but there are probably some widely held sort of beliefs and conventions as a sort of ex startup founder now in this world, what would your sort of top 3 commandments be for the new sort of corporate innovation playbook?

Oh my goodness, my commandments. I think if I follow on from my previous point while I'm thinking of something else to say, be open. I think Like, that's the best way to kind of share ideas and build knowledge and kind of create that hive mind. I think be open, but focus, like, focus and focus on the long term. So, like, I think lots of what you do, you have to kind of prove yourself when you're working at a larger company. You have to show small wins, and the long term is often the thing that that sacrifice, right? And that's very similar for a startup as well. But I think at the start, you never lose your long-term vision. You never ever lose it. And I think for big companies, and I think especially for kind of corporate innovation, it's how do you align with that long-term vision and that long-term strategy and play your part there? It's a very long answer. And then if I had to do a third one, I don't know. I actually, what can I do for a third one?

There doesn't have to be a third one, Sean, or we could announce it in the email.

I think solve genuine problems in big enough markets and don't be afraid if the market's not there yet. Just believe in the problem that you're trying to solve. Regardless of whether you're a big company or a small company.

Yeah, I would put a big plus one on that. It's incredible how much time gets spent validating ideas versus how little time gets spent validating that the problem actually exists in the first place. Yeah, yeah, for sure. Sean, it's been great having you, um, as our guest for Future Foundry Live this month. Thanks so much for, um, for joining us.