Things I found interesting this week:
- There’s an excellent new research report on corporate venture capital from 500 Startups (I wish this had been available when I was researching my masters dissertation on the topic). While CVC as a whole is continuing to boom, I was struck by the continued short-termism of the sector: more than 40% of the CVC units surveyed had a mandate of less than five years, or half the life of a typical mainstream VC fund, and hardly long enough to see investments through to exit.
- 31% of businesses in a recent survey have delayed innovation projects, and 13% have cut budgets for them, as a result of Brexit uncertainty.
- For anyone still spending in this area, capturing ideas from employees is one of the most powerful approaches to innovation: research has shown that a higher rate of implementing staff suggestions correlates with faster growth and superior net profit. But for large companies in particular, the signal to noise ratio on ideation can be a problem and this has led to the creation of a class of products for managing the process.
- Sticking with corporate innovation, there’s a nice case study here on how Condé Nast International launched its Vogue Business product.
- Not from Vogue Business but probably of interest to them, this Economist piece on the luxury goods sector describes a dynamic of slowing growth but the largest players taking a greater share of the market, while small to mid-size competitors struggle (the latter rely on struggling department stores, particularly in western markets, while the former own their own boutiques). Interesting parallels with media in terms of scale and distribution channels.
- On the subject of increasing returns to scale, there’s a superb chart here from Matthew Ball on the proportion of box office returns from the biggest franchises.
- For product people, there’s a thoughtful piece here on how Pinterest is taking a different approach to its curation algorithm: “there are troubles that have plagued higher-profile social networks: viral misinformation, radicalization, offensive images and memes, spam, and shady sites trying to game the algorithm… Here the company has taken a different approach than rival platforms: embrace bias, limit virality, and become something of an anti-social network.” (The conventional Silicon Valley playbook on virality is Nir Eyal’s Hooked: his follow-up got a thorough kicking this week.)
- Pinterest also stands out from its peers in having a stock price that has held up post-IPO, unlike Uber, Slack or Peloton. Against a backdrop of public market disappointments, this piece makes the argument for a tech market correction: “A close examination of both quantitative and qualitative data suggests that the tech market is reaching its peak, and that a correction is imminent. More importantly, we may be underestimating the extent of a potential correction.” (My emphasis).
- Finally, TikTok is introducing educational videos for Indian consumers: “TikTok is trying to discover new use cases for the platform to get wider acceptance.”