From its earliest beginnings, Innventure’s founders wanted to create companies that would transform markets. Anything less, we weren’t interested in. One of the first lessons learned was the power of market data. See, many inventors invent what they're interested in, not necessarily what the market needs. They invent what gets them excited. As an example, we once met with an inventor who was particularly excited about his newest invention, the “Electronic Tongue”. His idea was that you go into a restaurant, take a little chip out of your pocket, and you have a sommelier put a couple of drops of wine on the chip. Then, that chip is going to tell you whether you like that wine. Cool tech that could possibly have other applications, but people want to taste the wine for themselves, so no market demand.
While we recognized the power of understanding market needs, we decided that we weren’t smart enough to know in advance what the market demanded, so we decided to work with Multinational Companies (MNCs) who have a myriad of marketeers along with the marketing forces of their channel partners out there interacting with the customers every day - hearing from them, what they need, and what they want that they don't have. We learn quantitatively, in real dollars, what the market wants and at what price.
In other words, we “cheat” by finding out the market needs in advance. When the MNC finds an unmet market need for something disruptive that doesn’t align with their corporate strategy, they can share that need with us - along with volumes and volumes of valuable market knowledge - to help us quantify the demand and target a specific solution to address that need. The MNC can typically collect significantly more data in the same timeframe than a lone entrepreneur or a venture capital firm can collect.
If possible, the MNC becomes a channel to deliver that product to their customers when we are successful in developing a solution that addresses the market need. The power of levering this marketing and sales horsepower is designed to achieve rapid market adoption for a disruptive technology that may otherwise take years to deploy. Serendipitously, if the MNC sells our product through their channel(s), they can see growth in revenue from those channel sales.
We source technologies from MNCs that have disruptive potential but that are not a part of the MNC’s core business. Typically, the MNC will have spent millions of dollars developing the technology and will have protected it with a comprehensive patent portfolio. Accessing this technology gives new life to these assets and saves us significant time and money to get to the market much quicker than if we started the technology from scratch.
All of these interactions with our MNC partners are designed to significantly reduce the risk and time to realize the commercial success of our new Innventure Companies, making it one of the many reasons why the Innventure model has the potential to yield a very high success rate when compared to typical startups.
How does Innventure manage the introduction of companies built around disruptive tech into the market? Most investment models assume conditions won’t be affected by the introduction of a new solution.
Multinational Corporations (MNCs) invest heavily in research and development to innovate next-generation products and deliver new value to their customers. New product introductions typically use existing manufacturing infrastructure and current supply chains.