Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Coming up
Speaker 1: next week, Tim and I are involved in a Bloomberg
Speaker 1: Live Growth summit talking with leaders of all industries on
Speaker 1: how they are finding growth, getting growth out of their
Speaker 1: existing businesses and for more. You can head to Bloomberg
Speaker 1: Live dot com to uh find out about the vendor
Speaker 1: it maybe join us and keeping with that, our next
Speaker 1: guest because Mark forty nine. It's an incubator working with
Speaker 1: the likes of Goodyear, Hitachi, Intel, Jet, Blue Shellon Moore
Speaker 1: and the founder and CEO is Linda Yates and she's
Speaker 1: out with a new book. Yeah. The new book is
Speaker 1: called The Unicorn Within How companies can create game changing
Speaker 1: ventures at startups speed. Linda joins us via zoom from
Speaker 1: the Bay Area right now, and if you're watching us
Speaker 1: on YouTube or on Bloomberg Quick Take, you can see
Speaker 1: that shot. Linda. Good to have you with us this afternoon.
Speaker 1: How are you. It's great to be with you. Carol
Speaker 1: and Tim, thank you so much, well, thanks so much
Speaker 1: for joining us, and congratulations on the new book. You
Speaker 1: know it's interesting that we use the term unicorn here.
Speaker 1: Um as you write there are more than eight hundred
Speaker 1: and forty unicorns. That means that companies that are valued
Speaker 1: on the private markets over a billion dollars. That's equivalent
Speaker 1: to two trillion dollars in market cap. The big question
Speaker 1: is is how do you recreate what these disrupting startups
Speaker 1: are doing and do that internally at a company that's
Speaker 1: established to make sure that it's not being disrupted? What's
Speaker 1: the best way to do that? So it's you know,
Speaker 1: if you think about it, large companies absolutely have an
Speaker 1: advantage over the startups. And I'm a Silicon Valley kid
Speaker 1: right born bread there. But large companies have ideas, they
Speaker 1: have talent, they have channel, they have brand, they have customers,
Speaker 1: almost millions of them, So they basically have the opportunity
Speaker 1: to beat the startups at their own game if they
Speaker 1: can overcome the orthodoxes, the inertia, and the antibodies. So
Speaker 1: where we like to start with our clients, as we say, listen,
Speaker 1: there's no reason you cannot drive disruptive growth from within. Uh.
Speaker 1: It's like a double helix. Though on the one strand
Speaker 1: of the DNA you've got the venture investing in French
Speaker 1: venture building. Both of those things kind of go together.
Speaker 1: On the other strand of the DNA, it's how are
Speaker 1: you going to basically seize the mothership advantage to help
Speaker 1: the ventures that you're building or the ventures you're investing
Speaker 1: basically reached escape velocity and thrive. So, Lindy, you're not
Speaker 1: against entrepreneurship and startups right, r VC and that whole world,
Speaker 1: but you're just saying that large companies should kind of
Speaker 1: be doing more of it on their own internally. Absolutely,
Speaker 1: if you think about it, there was a there was
Speaker 1: a report that came out and if you think about
Speaker 1: the Fortune five fifty years ago, the average life of
Speaker 1: a company on the Fortune five D list was seventy
Speaker 1: five years. Today it's fifteen years and declining. And if
Speaker 1: you look at that list from fifty years ago, eighty
Speaker 1: eight percent of the companies that were on the list
Speaker 1: then are now out of business, off the list, or
Speaker 1: completely irrelevant. Only twelve percent remain. And our whole thing
Speaker 1: is listening. There's literally no reason that any of the
Speaker 1: large hotel chains couldn't have created Airbnb. There's no reason
Speaker 1: that Tesla could not come out of any of the
Speaker 1: large uh motor companies. So you're saying, be comfortable to
Speaker 1: disrupt your core business, which is so timely considering run
Speaker 1: a day, we're Facebook now, Meta is looking to disrupt
Speaker 1: what it's been doing, and it has churned out billions
Speaker 1: of dollars trillions of I don't know, like if you
Speaker 1: add it all up right over the years, But you're
Speaker 1: just saying be comfortable with that, and for investors, be
Speaker 1: comfortable when a company does that. Mary Barra has been
Speaker 1: doing it pretty aggressively at General Motors. Absolutely, and in fact,
Speaker 1: this is one of the things that that we talked
Speaker 1: about all the time is listen. It's about understanding customer pain,
Speaker 1: marrying that with the art of the possible, what's the
Speaker 1: current technology and trends that you can bring to solve
Speaker 1: that pain, and then placing a series of small bets.
Speaker 1: The problem that large companies have is they often they
Speaker 1: want to throw all this money into a single venture.
Speaker 1: It doesn't work, and they say, oh, that didn't work, Okay,
Speaker 1: we're not going to try that again. Right, So our
Speaker 1: whole thing is how do you remove the greatest a
Speaker 1: risk on the least amount of capital. One thing I
Speaker 1: do want to say and having worked with Johnson and
Speaker 1: Johnson a few years back and was out on the
Speaker 1: West coast, out in San Diego, they did have essentially
Speaker 1: an incubator lab on site, and they encouraged startup companies
Speaker 1: to be in their facilities, top into their expensive machines
Speaker 1: and expertise to do work on whatever they're working on,
Speaker 1: with the idea that J and J could potentially get
Speaker 1: involved invest or buy them out or not, but just
Speaker 1: gave J and J kind of an inside look at
Speaker 1: what entrepreneurs were working on that they could basically maybe
Speaker 1: be involved into a hundred percent. And so what we
Speaker 1: basically say is that what we're really helping companies do
Speaker 1: is build their growth engine, not just do venture building.
Speaker 1: In that growth engine, there are four arrows in that quiver.
Speaker 1: It's venture building doing it organically, but it's also the
Speaker 1: buy doing strategic and partnering and also so it's the
Speaker 1: build by partner invest All of those are important and
Speaker 1: that's exactly what is happening with Jay and J and
Speaker 1: a lot of these other things. Uh, you know, three
Speaker 1: M did that even in the very early days, right
Speaker 1: of people's time could and should be spent on doing innovation.
Speaker 1: So all four of those that that those arrows in
Speaker 1: your growth engine quiver are important. So I'm wondering about
Speaker 1: Linda the idea of big companies not being able to pivot,
Speaker 1: and in some cases it seems like it's because they
Speaker 1: want the smaller companies to fail because those ideas are expensive.
Speaker 1: The idea that you know, the next pepsi or coke
Speaker 1: or beverage, right, it could be developed outside of that
Speaker 1: company and then it would get acquired because they kind
Speaker 1: of do all the heavy lift venture capitalists and the
Speaker 1: investor right exactly, private money. Let the private money do
Speaker 1: that work. So how do you sell this to investors?
Speaker 1: Because look at the difficulty that Meta Platforms is having
Speaker 1: selling this to investors. Well so, and I actually think
Speaker 1: that we are actually doing a piece of research right
Speaker 1: now called you in the Unicorn within because if you
Speaker 1: actually think about it, are large companies are in essence
Speaker 1: held back by the financial markets right now? All of
Speaker 1: the startups in Silicon Valley when they go public, they
Speaker 1: get a hall pass for three or four or five years.
Speaker 1: The markets know how to value them. They value them
Speaker 1: on customer acquisition, they value them on revenue. But are
Speaker 1: large companies don't get that same hall pass right, their
Speaker 1: ventures get judged by the core and legacy metrics. And
Speaker 1: so we're actually working with companies now to create whole
Speaker 1: new growth divisions to overcome exactly what you're talking about,
Speaker 1: which is to give them a chance to in essence,
Speaker 1: even if it's a blended valuation, if you will, but
Speaker 1: it give them that chance to give their internal ventures
Speaker 1: the same types of valuations because they have the ability
Speaker 1: to be much more successful because of what the core companies,
Speaker 1: these assets and capabilities that the big companies can bring
Speaker 1: to bear to help these ventures thrive in the open market.
Speaker 1: And so separating those two is becoming a very important
Speaker 1: strategy for a lot of our multipility into our multinational
Speaker 1: public companies. Now it makes a lot of sense, certainly
Speaker 1: in this environment. Hey, Linda, thank you so much. Linda Yates,
Speaker 1: founder CEO at mackte her new book The Unicorn Within
Speaker 1: How Companies can create game changing ventures at Startup Speeding,
Speaker 1: as we said, really timely considering the pivot that Facebook
Speaker 1: are formerly Facebook now Meta is doing as it steps
Speaker 1: deeper into the metaver speaking of deeper, the stock shares
Speaker 1: of Meta down more deeply, if you will, me afterwards,
Speaker 1: it's done. Almost four here. Yeah, she's tumbling. As revenue
Speaker 1: forecast MRS at the midpoint. The third quarter was the
Speaker 1: second straight quarter of year on year revenue declines. Carol