Bill Haskell is the CEO of Innventure, a company that has defied definition for years. That's fine because defining the ...Read more
"We found, fund, and scale companies around disruptive technology solutions to address billion-dollar market needs," explains Haskell. "Our systematic, quantitative approach helps mitigate many of the risks typically associated with building and scaling high-growth ventures. It's a business model designed to cultivate assets into billion-dollar corporations within five years."
Why it pays to know the numbers
Haskell is an applied mathematician who got his start working on Spaceborne imaging platforms. "I spent that first decade of my career with very complex technologies and large multinational corporations," he recalls. "I worked in areas ranging from highly-classified technology to business development."
Around 30 years ago, Haskell's career connected him with John Scott, a scientist with a dual Ph.D. in physics and high-energy astrophysics. As the two collaborated at work, they began to bounce around an idea for a revolutionary startup.
Scott had started a couple of venture-backed companies in the past, and this afforded them exposure to the pros and cons of venture capital. Instead of creating a typical company, they decided to launch a ground-breaking platform for inventing and building their own companies. The two scientists broke down the methodology behind company-building with the aim of improving their odds, convinced there was a better way than the traditional venture model.
"Venture capital invests in a portfolio of companies," Haskell explains. "Let's say they make 10 bets on 10 different companies. If they manage to hit two or three out of 10 successfully, it's a very good return on investment. Still, if you're an entrepreneur spending five years of your life, your best ideas, and your own capital on something that's going to fail 70 or 80% of the time, it's a lousy place to be. We set out to de-risk the company building process."
Perfecting the methodology and launching Innventure
Haskell and Scott studied the DNA of both successful companies and failing companies. "One thing we learned is that independent inventors follow their passion and don't always invent what the market is interested in," Haskell says. "So many businesses fail because they invent something that they think is really cool, but there may or may not be a market demand."
To address that discrepancy, they partnered with multinational companies. These industry giants are equipped with marketing forces traveling the planet to talk to customers and search for unmet market needs. After identifying a large enough gap, they scoured the stores of intellectual property in government labs and universities to find a technology that could solve the need.
"As my partner John always says, ‘we cheat,'" Haskell remarks with a laugh. "We know what the market wants before we start a company. We don't have to worry about whether the market will adopt the technology because we already know it's clamoring for it."
Improving the formula with disruptive orphan technology
Haskell and Scott called this company-building platform XL TechGroup. After several iterations, it evolved into Innventure. "Today, we still source our marketing intel from multinationals, but we learned to source our technologies from them as well," Haskell remarks. "These corporations spend billions on research and development. In fact, the top 100 spenders put half a trillion dollars a year into R&D, and only a single digit percentage of that ends up in commercial products."
On average, they spend up to $20 million on a technology, and they have thousands of these technologies collectively that are not being commercialized. Sophisticated multinationals look to find a home for these orphaned technologies.
Innventure approaches multinationals with specific ideas in mind. "The things we commercialize are disruptive," says Haskell. "We're talking about tech that transforms the entire market. For example, electric vehicles changed the market for automobiles, and the cell phone fundamentally changed the Internet. Market disruptors tend to be very large opportunities. We only start a company if we think it can be worth $1 billion in five years."
Innventure incorporates its own venture fund that is available to the companies it creates. This innovation removes the capital risk. "Many companies fail because they run out of money," Haskell says. "We have the capital to fund these companies well into their commercialization lifecycle. When we start a company, we're giving birth to teenagers — not infants."
By eliminating risk from market demand and funding, Innventure’s model is designed to have an over 80% success rate for the companies it launches, very nearly flipping the odds of the venture capital model on its head. However, to make this system work, Innventure makes very few bets, and they are not betting on individual entrepreneurs. "We're betting on our team," Haskell comments. We're not reading the business plans of entrepreneurs and deciding whether we like it or not as venture capitalists and private equity firms do. We take the technology and start our own companies."
The steps from orphan tech to billion-dollar disruption
Innventure's billion-dollar process starts by developing relationships with large multinational corporations like Procter & Gamble and Nokia. These corporations have the intellectual property the market needs and the horsepower to commercialize it. They become partners who mutually benefit by solving unmet needs.
Multinational corporations have more market intelligence than any entrepreneur will get their hands on in a lifetime. They know the market's needs and often have technology that meets them. However, for strategic reasons, multinationals may choose to not commercialize a technology internally.
For example, Procter & Gamble — a world-class company with deep technical expertise in cleaning — uses a lot of raw materials including plastics derived from petroleum products. To meet their corporate sustainability goals, they spent a lot of time and money developing a technology that essentially cleans color, odor, and contaminants from dirty plastic returning it to virgin quality resin that can be used over and over again.
"They have the technology that can solve an unmet need that they have, but they don't want to be in the waste collection or recycling business," explains Haskell. "They wanted the end-use product and understood that many other companies across multiple industries would need the same thing. So they worked with us so that we could convert that tech into an independent business that can serve them and the entire market while sharing the value that is created back with P&G. In short, this year, the first large-scale commercial plant will be coming online for PureCycle, and that plant's capacity has been pre-sold both to Procter & Gamble and other global customers for the next 20 years."
Innventure aims to dramatically reduce its risk by partnering with multinational companies with buying power and built-in sales and marketing. Their team leverages the strengths of their multinational partners to bring tech to the market. "They invent the technology, we turn it into a business, and then they ideally help us commercialize the technology by becoming a customer or channel to the market," says Haskell. "We call that process closing the loop."
As Innventure becomes more well known, multinational companies are reaching out with technology in need of a home. Regardless of the label they may try and put on Innventure, they come because they see the process works.
"Most people try to place us into an existing category like venture capital or private equity," says Haskell. "We're fundamentally different. We have a mature technology, we have a commercialization partner, and we know what it takes to compel the market to adopt this disruptive technology. We have the capital to take the technology to commercial viability and a seasoned executive team that has done this many, many times. We're quite different from other organizations. In fact, we haven't found anyone who does what we do.