Helping Big Businesses Beat Startups

guest because Mark forty nine. It's an incubator working with the likes of Goodyear, Hitachi, Intel, Jet, Blue Shellon Moore and the founder and CEO is Linda Yates and she's out with a new book. Yeah. The new book is called The Unicorn Within How companies can create game changing ventures at startups speed. Linda joins us via zoom from the Bay Area right now, and if you're watching us on YouTube or on Bloomberg Quick Take, you can see that shot. Linda. Good to have you with us this afternoon.

How are you. It's great to be with you. Carol and Tim, thank you so much, well, thanks so much for joining us, and congratulations on the new book. You know it's interesting that we use the term unicorn here. Um as you write there are more than eight hundred and forty unicorns. That means that companies that are valued on the private markets over a billion dollars. That's equivalent

to two trillion dollars in market cap. The big question is is how do you recreate what these disrupting startups are doing and do that internally at a company that's established to make sure that it's not being disrupted? What's the best way to do that? So it's you know, if you think about it, large companies absolutely have an advantage over the startups. And I'm a Silicon Valley kid

right born bread there. But large companies have ideas, they have talent, they have channel, they have brand, they have customers, almost millions of them, So they basically have the opportunity to beat the startups at their own game if they can overcome the orthodoxes, the inertia, and the antibodies. So where we like to start with our clients, as we say, listen, there's no reason you cannot drive disruptive growth from within. Uh.

It's like a double helix. Though on the one strand of the DNA you've got the venture investing in French venture building. Both of those things kind of go together. On the other strand of the DNA, it's how are you going to basically seize the mothership advantage to help the ventures that you're building or the ventures you're investing

basically reached escape velocity and thrive. So, Lindy, you're not against entrepreneurship and startups right, r VC and that whole world, but you're just saying that large companies should kind of be doing more of it on their own internally. Absolutely, if you think about it, there was a there was a report that came out and if you think about the Fortune five fifty years ago, the average life of a company on the Fortune five D list was seventy

five years. Today it's fifteen years and declining. And if you look at that list from fifty years ago, eighty eight percent of the companies that were on the list then are now out of business, off the list, or completely irrelevant. Only twelve percent remain. And our whole thing is listening. There's literally no reason that any of the large hotel chains couldn't have created Airbnb. There's no reason that Tesla could not come out of any of the

large uh motor companies. So you're saying, be comfortable to disrupt your core business, which is so timely considering run a day, we're Facebook now, Meta is looking to disrupt what it's been doing, and it has churned out billions of dollars trillions of I don't know, like if you add it all up right over the years, But you're just saying be comfortable with that, and for investors, be comfortable when a company does that. Mary Barra has been

doing it pretty aggressively at General Motors. Absolutely, and in fact, this is one of the things that that we talked about all the time is listen. It's about understanding customer pain, marrying that with the art of the possible, what's the current technology and trends that you can bring to solve that pain, and then placing a series of small bets. The problem that large companies have is they often they want to throw all this money into a single venture.

It doesn't work, and they say, oh, that didn't work, Okay, we're not going to try that again. Right, So our whole thing is how do you remove the greatest a

risk on the least amount of capital. One thing I do want to say and having worked with Johnson and Johnson a few years back and was out on the West coast, out in San Diego, they did have essentially an incubator lab on site, and they encouraged startup companies to be in their facilities, top into their expensive machines and expertise to do work on whatever they're working on, with the idea that J and J could potentially get involved invest or buy them out or not, but just

gave J and J kind of an inside look at what entrepreneurs were working on that they could basically maybe be involved into a hundred percent. And so what we basically say is that what we're really helping companies do is build their growth engine, not just do venture building. In that growth engine, there are four arrows in that quiver.

It's venture building doing it organically, but it's also the buy doing strategic and partnering and also so it's the build by partner invest All of those are important and that's exactly what is happening with Jay and J and a lot of these other things. Uh, you know, three M did that even in the very early days, right of people's time could and should be spent on doing innovation. So all four of those that that those arrows in

your growth engine quiver are important. So I'm wondering about Linda the idea of big companies not being able to pivot, and in some cases it seems like it's because they want the smaller companies to fail because those ideas are expensive. The idea that you know, the next pepsi or coke or beverage, right, it could be developed outside of that company and then it would get acquired because they kind of do all the heavy lift venture capitalists and the

investor right exactly, private money. Let the private money do that work. So how do you sell this to investors? Because look at the difficulty that Meta Platforms is having selling this to investors. Well so, and I actually think that we are actually doing a piece of research right now called you in the Unicorn within because if you actually think about it, are large companies are in essence

held back by the financial markets right now? All of the startups in Silicon Valley when they go public, they get a hall pass for three or four or five years. The markets know how to value them. They value them on customer acquisition, they value them on revenue. But are large companies don't get that same hall pass right, their

ventures get judged by the core and legacy metrics. And so we're actually working with companies now to create whole new growth divisions to overcome exactly what you're talking about, which is to give them a chance to in essence, even if it's a blended valuation, if you will, but it give them that chance to give their internal ventures the same types of valuations because they have the ability to be much more successful because of what the core companies,

these assets and capabilities that the big companies can bring to bear to help these ventures thrive in the open market. And so separating those two is becoming a very important strategy for a lot of our multipility into our multinational public companies. Now it makes a lot of sense, certainly

in this environment. Hey, Linda, thank you so much. Linda Yates, founder CEO at mackte her new book The Unicorn Within How Companies can create game changing ventures at Startup Speeding, as we said, really timely considering the pivot that Facebook are formerly Facebook now Meta is doing as it steps deeper into the metaver speaking of deeper, the stock shares of Meta down more deeply, if you will, me afterwards, it's done. Almost four here. Yeah, she's tumbling. As revenue

forecast MRS at the midpoint. The third quarter was the second straight quarter of year on year revenue declines. Carol