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In-preneurs

In-preneurs

In-preneur

In-preneur

In-preneur—no, not an Intrapreneur, who is someone inside a company that wants to set up a business within the confines of the corporation. An In-preneur is someone who wants to sell INto a large corporation, or who seeks funding from INside a corporate, enabling them to become a viable partner with the big firm.

Business startups, as well as established small businesses can get a start or develop their enterprises by working with large firms to mutual benefit. This form of leverage requires not much effort from the big firm and gears up to a huge advantage for the individual starting a new business.

For example, Through the Local Producer Loan Program, Whole Foods Market lends money to small, local, independent producers to help them expand their businesses.

This can come from special programs to purchase from small suppliers, like Walmart that announced in late 2010, a plan to double the sales of fresh produce from local farms in its US stores by the end of 2015, as a part of its strategy to revamp the company’s global produce supply chain.

There can be other reasons why an entrepreneur might want to become an in-preneur, for example, if  you can sell the startup to a bigger company and the acquirer’s equity value will likely grow substantially faster then yours will, or the acquirer can get more value out of your company than you can.

SoftCity is an interesting business. It was started by Marc-Antoine Ross and his co-founder Blaise Rabaud. That’s nothing new, a couple co-founders, but what is different is the fact that SoftCity is wholly owned by Avanquest, a public company. Marc-Antoine had some history with Avanquest (having done some work for them in the past) and as a result, they worked collectively to launch the new startup.

Bringing the Outside In

Chevron, the oil major, looks to purchase from small companies that provide the high quality goods and services, but they  must  “value-added” qualities like:

  • Cost savings
  • Financial viability
  • Competitive pricing
  • Customer focus
  • Innovative business solutions
  • Excellent safety record

So, it’s no push over. Like Chevron, many corporations that buy from small business, also require that they fit profiles that include minority and women ownership, or be certified by the Small Business Administration. Since chances are high that you have little experience of selling to big business, they ask you to learn more about how to do business with large corporations by attending seminars and workshops, as well as understanding their business.

Lockheed Martin is an active supporter of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These are Federal programs designed to fund small businesses to conduct research and develop emerging technology. Whether working as a subcontractor or a technology mentor, Lockheed Martin provides small businesses with various assistance during different phases of their SBIR/STTR projects; including supporting technology requirements, evaluation, co-development, and insertion into larger systems.

Lockheed Martin also has Technology Collaboration Centers, in San Diego, Calif., and Washington, D.C., that provide a collaborative environment for employees to work closely with small business technologists and the customer community to innovate, experiment, stress and analyze new capabilities and evaluate proposed technology insertions for existing systems.

State Governments undertake similar plans. Massachusetts, for instance, has a Small Business Purchasing Program for companies with sales less than $15 million and non-profits, too. The Federal Government has many programs designed to help small business access the world of government contracting. One example is the Mentor Protégé Program is an outreach program designed to encourage large defense contractors to develop technical and business capabilities of small disadvantaged businesses to enable them to compete more effectively for defense-related work.

Open Innovation

Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate innovation. With knowledge now widely distributed, companies cannot rely entirely on their own research, but should acquire inventions or intellectual property from other companies when it advances the business model.

So, for entrepreneurs, open innovation presents many opportunities for revenue generation, as well as fruitful partnering with companies that have both financial and other resources that the small outfit may lack.The image above is from Dr. Henry Chesbrough the Executive Director of the Center for Open Innovation, at the Haas School of Business at Berkeley.

Many companies recognize that they are not masters of all the skills and ability that can offer them the ability to enter new technologies, supplement their existing ones, or to add process skills and experience that will allow them to break into new markets or channels of business.

Crowdsourcing

Crowdsourcing is progressively used by many organizations who know that they don’t know it all. Crowdsourcing companies leverage the work of many distributed individuals with whom they have loose, ad-hoc relationships. This is happening a lot in tech and pharma companies. One of the examples that Jeff Howe talks a lot about in his book, Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business, is iStockphoto, the royalty-free stock image source. I make use of Trendwatching, an independent and opinionated trend firm, scanning the globe for the most promising consumer trends, insights and related hands-on business ideas. They rely on their network of hundreds of spotters in more than 120 countries worldwide.

Procter & Gamble has used crowdsourcing with their research-based product development, reaching out to scientists outside their own R&D departments. They form a good example of how crowdsourcing can be useful not just with simple, repetitive tasks but also with complex research and development.

New Ventures at Old Corporations

The competitive environment has produced many factory closures in the developed world. In most cases management is traumatized and just want to get out and stem losses. Many creative solutions to closures have happen, but not nearly enough.

The most well-known in the US is Springfield ReManufacturing in Springfield, Illinois. Thirteen employees bought what was a part of International Harvester plant and the company has now grown significantly and spawned others. An example is NewStream Enterprises that was established in 1990 and has been a leading force in customized supply chain management, continually increasing efficiencies while adding services to its core capabilities, also as an employee-owned company.

In the late 70s, I was fortunate to have led a consulting project that had originally been about closing down the Shepperton Film Studios in England (to free up the land for housing) and re-careering the people who worked there. However, while we did work on finding new directions for many of the highly specialized people who worked at the studio, we also came up with the idea for a ‘Shepperton Film Centre’. Happily the owners ‘bought’ the notion. It was based on not losing the unique set-up of a studio with its stages and workshops, but turning it into a place where film and media companies could relocate, thus maintaining a film-related activity on the site. In several mutations later, Shepperton is part of the Pinewood Studios Group, a publicly-quoted company that operates three studios and has as many as 300 companies on the sites, as well as continuing to run the studio operations.

 

PLEASE NOTE: There is tons of useful stuff on Startup Owl, a site that’s been going for a dozen years. So keep browsing, but know that the founder, Will, now devotes most of his time and energy to his new website that you should definitely visit: https://venturefounders.com

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