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Why Internal Efforts to Spin-Out Often Fall Short


Skills & People
  • Spin-out/Licensing Team
    • People re-assigned from core business may lack requisite skills, market knowledge and contacts; people recruited from outside your industry may lack fluency and fit
    • Hard to create Venture Capital (VC) model of compensation within a public company in order to attract/retain the talent needed
  • Ventures led by technologists rather than experienced entrepreneurs with needed marketing, selling, financial and other skills
Orientation & Focus
  • “Technology Push” rather than “Market Pull”
    • Limited understanding of market “pain points” and unmet needs fueling “killer apps”
    • Insufficient validation by customers
    • Inadequate channel/marketing/distribution
  • Emphasis on designing products, rather than building sustainable businesses
Investor Discipline
  • Inability and/or unwillingness to do objective triage early to avoid wasted investment
Cultural Issues
  • Frustrating interface with external partners, and lack of commercial relationships
  • Difficulty embracing speed/agility and adapting to commercial negotiations and terms
Investment Horizon and Alignment
  • VC investment cycle (7-10 years) is longer than the attention span of most corporations
  • Reward structure gives insufficient motivation to core businesses
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