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Looking for a True Enterprise Entrepreneur in Residence

I’m researching an idea for how large enterprises which are not technology companies can promote innovation in their areas of interest.  My proposal: hire a true Enterprise Entrepreneur in Residence, whose defined KPI is: Quit my job. (No, that’s not a typo). This idea would have a trivial cost: just the person’s compensation.    

The sweet spot for an enterprise to trial this idea is probably a company big enough to have an innovation budget, but small enough that they do not have a dedicated VC group.  Companies which are not located in innovation hubs are also a logical fit.

Many large enterprises face the challenge of how to launch innovative, disruptive businesses; how to become fast adopters of innovative new technology; and more broadly how to work with the innovation economy.  A number of large enterprises have hired “Enterprise Entrepreneurs in Residence” to address this challenge.  But my experience is that the title is usually a misnomer.  

Enterprise EIRs are typically evangelists to the entrepreneurial community and/or intrapreneurs (who stay employed by the company while launching a new business).  Those are important and valuable functions, but they typically are not at all the same thing as an Entrepreneur in Residence at a VC fund.  The job of the EIR at a VC fund is typically to sit in the VC for a few quarters, until they figure out a new business they want to launch.  They are normally paid between $0 and a few hundred thousand annually. Then they leave the nest and launch a completely independent new enterprise, in which the VC may or may not invest.  

We’re talking with some of our limited partners about their hosting a true “entrepreneur in residence”.  This person’s job would be:

  • Understand the company’s pain points by talking with internal leads
  • Research a plan for one or more startup ideas
  • Launch the idea that she think is most promising within one year, quitting her job at the parent enterprise

In order to attract the most qualified entrepreneurs, I suggest that the enterprise impose no strings on the founder. She would have no obligation to raise capital from the enterprise or partner in any way.  But of course, since she’s well-networked internally and has relationships at the enterprise, it is very likely that she will raise capital from the enterprise either as an organization, or from individual executives.

The benefits to the sponsoring organization:

  • They will be in pole position to be an early investor or client of the startup.
  • They’ll get the benefit of an entrepreneur’s perspective on where are the inefficiencies in their processes.
  • If the EIR doesn’t choose to work with the enterprise, she’ll give valuable feedback on why she did not think that was a good idea.

Diana Dowling, a corporate innovation consultant, observed, our Enterprise EIR “model assumes that an enterprise can’t find an existing startup to solve a pain point  – hence it needs an EIR to fill the gap. But such a startup may already exist and (1) hasn’t been identified, or (2) – even more likely –  has been identified, but no one in the enterprise can decide what to do about it (ie how/when to engage). An EIR won’t solve these two problems.”  That’s true, but on the other hand, such a startup may not exist. The EIR’s newfound internal network can help her succeed in launching such a startup.

I’m looking for enterprises interested in experimenting with us with this idea.  For context, HOF Capital’s initial backers include 49 limited partners from 16 countries.  They vary in industry and expertise, but they all want to be early customers of the enterprise tech companies in which we invest. Our strategy is to provide our portfolio companies with initial revenues and customer feedback from the companies over which our LPs have influence.  As a result, we work closely with our backers, typically with their heads of innovation, M&A, business development, R&D, etc.  For more on how HOW Capital works with large enterprises, see How HOF Capital Accelerates Enterprise Innovation.

What do you think of this idea?  Do you know anyone pursuing it?

I earlier posted about another idea for promoting innovation which I think no one is pursuing: A trial balloon: How large corporates can coinvest with their employees’ angel investing

Thanks to Ram Trichur for thoughtful feedback.

 

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