Don't refer to the incubator program as a corporate venture capital outfit.
The most important tip of the spear for the company is the experimental playground called the Nova, which is used to explore areas where the corporation has spotted areas ripe for future growth. Backed by a relatively large team and a healthy budget, the company is rolling up its sleeves and exploring different versions of the future.
I had an interview with Sokwoo Rhee, the corporate VP and head of the North America Innovation Center. The interview is edited to make it clear and long.
Are we a CVC? The answer is no. VC is a venture capital play. Their ultimate goal is to have a high return. They invest in companies that have the potential to grow their market value. We invest and care about the growth of the companies, but we also look at how the business we can create together will grow. If the company has something that we need to grow our business as well, then we will invest and work with them. We will put our resources behind the company by doing a proof of concept. A financial investment is just one part of that. We want to create joint businesses and joint ventures. We may make acquisitions for some companies. CVC is a financial play and more of a business creation play.
"You're probably tired of hearing about the metaverse every day," laughs Rhee, eliciting an honest nod from your correspondent.
One of the largest manufacturers of appliances isLG Electronics. We want to look at the future, specifically at areas that we believe are ripe for future growth, areas that aren't necessarily operating today. We aren't yet for areas where we want to grow. We established this center last year to find out what those things are and to grow new businesses in the new growth areas.
The team came up with five different areas of focus, specifically targeting aspects of the market where the company can leverage its platform and innovation reach. Digital health, the metaverse, EV infrastructure and smart lifestyle are the areas. The latter is an extension of smart homes, home automation and living smarter. The overarching mandate of the company is to look at representation across all categories.
Helping under-served communities and products and services that can make an impact in communities to improve quality of life are some of the things we look for. A lot of corporate innovation started inside. A lot of R&D centers and innovation initiatives take a lot of time, and you spend a lot of time in the lab to create something new. We are doing something that we call outside-in innovation. R&D capability is not provided by the Nova. We will not be building new innovations internally. We want to encourage outside entities to propose ideas and work with us in this new future growth area. We want to figure out how we can work together.
New businesses can mean a lot of different things. If the idea, suggestions and partnership hit a home run, we will create a new business unit.
That sounds like a corporate incubator. The devil is in the details, and that's why there are so many exciting twists in the corporate accelerator mix. Implementing how it works with its startup is much broader than simply writing a check and hoping for the best.
Sokwoo Rhee is the head ofLG Nova. The image is of the Nova.
The process and the benefits.
The Grand Challenge program is the first step in finding its feet. It started with a competition in September called the "Mission for the Future", which was met with a lot of interest from startups, and it received over 1,300 proposals from more than 100 countries.
Unlike many other incubators, it isn't looking for technology proposals and isn't taking the corporate venture capital approach of investing. The incubator is looking for submissions for how startups want to bring their products to market by using the reach and impact of the company.
They make a list of 50 or so companies from the 1,300 proposals. Each of the companies has been assigned an EIR who will work with the startup to flesh out the ideas and put together a proposal, figuring out what the potential synergies are with the bigger strategy of the company.
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