When you think about “academic thought leadership” in entrepreneurship, Yale Hochberg is at the top of most lists. For me, as a VC, she is best known for her work on the Seed Accelerator Rankings. But as you’ll hear on this week’s episode of Agile Giants – Yael has done a ton of interesting work around innovation and entrepreneurship including recently starting a firm focused on corporate innovation. It was a highlight to have her join me on Agile Giants.
Show Links
- Yael’s Personal Homepage
- Yael’s Consulting Firm: Flywheel Innovation
- Yael’s Twitter
- Yael’s Rice Website
- Seed Accelerator Rankings website
Full Transcript
Sean Ammirati (00:08):
Welcome to Agile Giants: Lessons from Corporate Innovators. I’m Sean Ammirati, your host, co-founder and director of the Carnegie Mellon Corporate Startup Lab, and partner at the early-stage venture capital fund, Birchmere Ventures.
Sean Ammirati (00:22):
Each week I’m going to talk to guests who are experts at creating startups inside large corporations. I believe, fundamentally, a startup within a company is the same as one inside the proverbial garage, a group of entrepreneurs trying to make the world a better place using new ideas and inventions. However, I also believe some of the techniques and processes are just inherently different. This podcast is going to explore those similarities and differences.
Sean Ammirati (00:56):
On this week’s episode of Agile Giants, as we move to wrap up season two, I wanted to bring on one more academic thought leader, Professor Yael Hochberg, the Ralph S. O’Connor Professor of entrepreneurship at Rice University and the academic director for the Rice Alliance for Technology and Entrepreneurship.
Sean Ammirati (01:15):
Yael is probably best known for her work doing the Seed Accelerator Rankings, which has gone out and actually helped entrepreneurs figure out the different rankings around all those different emerging accelerator programs. But she’s done a ton of interesting things. She was actually the Kauffman Foundation, probably one of the leading thinkers and supporters of entrepreneurship and entrepreneurial research, they gave her a prize for distinguished research and entrepreneurship in 2016. And Poets and Quants, which ranks both MBA programs and MBA professors, named her one of the 40 best business school professors under the age of 40.
Sean Ammirati (01:51):
Yael is also doing some work in the corporate innovation space. With a few colleagues, she launched a consulting firm called Flywheel Innovation, which helps companies apply a lot of these entrepreneurial practices inside their business.
Sean Ammirati (02:05):
Just one programming note before we get to the conversation with Yael, next week will be the last episode of Agile Giants for the season, and then we’ll take a little break. I have a couple of projects I’m going to focus on over the summer and we’ll come back in the late summer, early fall to continue Agile Giants season three, but next week will be another one of the Q&A episode. I know that was really popular in season one and wanted to give a chance to answer some additional questions.
Sean Ammirati (02:32):
I’ve already gotten some through social media channels, but if you have any pressing questions, please message me on Instagram or Twitter, or send me an email. Thanks, and looking forward to wrapping up season two next week, but first, hope you enjoy this week’s conversation with Yael Hochberg.
Sean Ammirati (02:54):
So today I really have a special guest, as I said, and I really want to thank Yael for joining me. She’s literally one of the world’s leading thinkers on entrepreneurship and also corporate innovation, and so, appreciate her joining us on Agile Giants today.
Sean Ammirati (03:09):
Yael, thanks for making the time. I’m guessing most of the audience would know you from your seed rankings, but maybe just take a step up and let people get a full view of the types of things and stuff that you work on.
Yael Hochberg (03:23):
Thank you, Sean, for having me today. It’s great to be here and great to get a chance to connect with your audience. So my day job is the Ralph S. O’Connor Professor of entrepreneurship and professor of finance at Rice University’s Jones Graduate School of Business.
Yael Hochberg (03:39):
At Rice, I am the head of the Rice Entrepreneurship Initiative. The Rice Entrepreneurship Initiative, essentially, is responsible for all of the activities that we do on campus related to entrepreneurship education, whether that touches faculty, staff, students, undergraduates, engineers, the humanities, the sciences, the architecture school, we do it all.
Yael Hochberg (04:00):
We run a physical incubator space on campus that our student teams work out of and coordinate the curriculum. We have an undergraduate minor and a major concentration in the MBA program in entrepreneurship. Beyond that, I have a few other things that I do on a daily basis. So as you mentioned, I’m the managing director of the Seed Accelerator Rankings Project for the last, I guess it’s close to 10 years now, we’ve been running an annual or biannual ranking of accelerator programs for startups here in the United States.
Yael Hochberg (04:35):
So together, my colleagues, Daniel Fehder of USC and Susan Cohen of Georgia, we go out and gather a lot of information about the startups that go through these programs and the programs themselves and kind of the state of the world, and provide what we hope is a useful benchmarking exercise for entrepreneurs who are trying to think about where do I go, how do I choose from the multitude of accelerator programs that exist out there today.
Yael Hochberg (05:02):
So when I’m not doing that and I’m not teaching and I’m not doing research, I am also the co-founder of a consultancy called Flywheel Innovation. Flywheel does corporate innovation consulting, we work with large Fortune 500s around educating and designing innovation programs, working with innovation teams, working with the teams who are actually building innovation projects within the companies, and trying to help move some of our big industrials here globally into the brave new world of what will be in 50 years.
Sean Ammirati (05:35):
That’s awesome. Okay, so I do want to get to Flywheel because I have a feeling some folks’ ears perked up when you said that, but let’s start with the seed rankings. Because I remember in 2006/2007, helping an accelerator in Pittsburgh get started as a founding advisor, and having an honest conversation with the MD at that point about, “I think this is really important. I think you should do this but there are 10 of you. And I just don’t know if we need 10 accelerators.”
Sean Ammirati (06:07):
I was obviously off by a couple orders of magnitude as there’s thousands of them now. But what’s interesting is I think these accelerators have, in some ways, almost become like business schools, right? Where the best schools get the best entrepreneurs, which then continues the cycle of talent coming to those places.
Sean Ammirati (06:28):
Your rankings really have become kind of the de facto source for this is how these rank. So, I guess, how did you go about putting those together and how do you think about the trying to be as fair as you can to the rankings? And then I want to specifically get to a question for our corporate innovation audience on this.
Yael Hochberg (06:48):
Fantastic. Yeah. It’s interesting. I like to give credit where credit is due. I had a fantastic student by the name of Aziz Gilani at the Kellogg School of Management. Aziz graduated and went into the Kauffman Fellows program, which trains venture capitalists.
Yael Hochberg (07:03):
And as part of his work with the Kauffman Fellows program, he approached me and said, “Hey, there are these new things that are coming online, these accelerators like Y Combinator and Techstars, and the honest truth is we have no idea what they’re doing for the startups and if they’re doing good things or not, and I’d love to know who’s doing right by the startups and who’s not.”
Yael Hochberg (07:22):
And so together with Aziz, the first year, I kind of worked to advise him on thinking about what some metrics might be around how you might measure the efficacy of a startup accelerator. And he then promptly took the top five, plumped a bunch of money from his venture fund into them and said, “It’s all yours, do with it as you will.”
Yael Hochberg (07:41):
And I kind of picked that up and the following year spent a lot of time thinking about what are the right KPIs for this, what are the right metrics, right? And whose perspective do you think about it from? Because you can think about it from the perspective of the people who’ve put together the accelerator, the MDs, and what they want to return, potentially, to their investors or what they’re trying to do for their communities.
Yael Hochberg (08:04):
You also have to think about it from the perspective of the entrepreneur. When accelerators started out, and even to some extent today, the entrepreneurs would go to these programs and they would give up six to seven percent of the equity in their startups in return for 25 grand on average, I think it was back then.
Yael Hochberg (08:21):
And that’s a big chunk of change to be giving up in terms of equity in your company. So if you’re going to do that, you’re not doing that for the $25,000, you’re doing that, hopefully, for the value added of what the accelerator program can really do for you.
Yael Hochberg (08:34):
And that just sparked, from my perspective, a series of years of time spent talking to accelerator MDs, thinking about what it is that these programs consisted of, who was doing things that seemed to make sense, who was doing things that didn’t seem to make sense, and then really trying to be objective about it. So the issue of being fair is really, really important.
Yael Hochberg (08:56):
So like you said, the danger with rankings is always, you rank, people look at that, they then go to the top-ranked programs or apply to the top-ranked programs and the best go to the best, and you get this sorted matching all the way down the line. So you have a lot of responsibility if you’re going to throw stuff out there and say, “These are the best accelerators.” For a time, when there was still a manageable number of them, we tried to rank things in terms of a one, two, three, four.
Sean Ammirati (09:23):
Right.
Yael Hochberg (09:23):
At that point it became harder to really sharply differentiate in quality between certain groups, so we went into a tiering system where we went to platinum, gold, silver, and bronze and so forth. But we spent a lot of time thinking about what that set of metrics would be.
Yael Hochberg (09:40):
So we have a set of, I think it’s 24 or 25 quantitative metrics that go into the accelerator rankings. One of which is we actually survey every graduate that comes out of these programs and ask them… We get an NPS score on the program. Would they go back? Would they recommend it? What did they like? What did they dislike? And that tells you a lot in terms of did the entrepreneur feel that they got value out of the program.
Yael Hochberg (10:08):
But then we also look at things that are more measurable. You can argue with any of these metrics, right? But altogether, if you spread across enough of them, you can very clearly see the pattern, because there’s a bunch of these programs out there that are really great on everything, including what their startups have to say about them. But do their startups actually manage to go out and raise significant amounts of financing? Do their startups get good valuations? Do the startups survive?
Yael Hochberg (10:39):
And some of these metrics have drawbacks to them. Survival is an interesting one because with an accelerator program, you’re not always trying to get the startup to survive, sometimes you’re trying to get them to die fast if it’s not appropriate.
Yael Hochberg (10:50):
So we also tried to put some weights on some of this, and try and think about, just in a predictive model, what seems to be the things that are driving the ultimate success of the startups down the road, and then extrapolating that out more generally. But we were always very careful to try and measure apples to apples. So, you can’t go and look at Dropbox as a graduate from YC and try to compare that to someone who just came out of an accelerator in Greenville, Spartanburg, South Carolina a year ago, right? That’s not the right comparison.
Yael Hochberg (11:29):
So we look at startups one year, two years, and three years out, as opposed to necessarily doing what some of the media has done with just overall value created. That means the older you are, the higher you’re going to show up there, even though some of the newer programs that have been very specifically designed to help specific verticals are really excellent programs.
Yael Hochberg (11:50):
So, take each of these metrics, measure it a year out, measure it two years out, measure it three years out, throw it into the predictive weights and pull together an index from that, and then see where the very clear breaks are between the groups and tier.
Yael Hochberg (12:06):
And the response to the rankings has really been amazing, I think. To me, the big reward from this was just the entrepreneurs who said, “Thanks, because I didn’t know where to start.” Right?
Sean Ammirati (12:17):
Right.
Yael Hochberg (12:17):
It’s like you said, you know what? It was 20 of them, it was 10 of them, but there’s thousands out there, there’s hundreds in the U.S. alone, how do I know whether the one next to my house is the one to go to? Or should I pick up and go somewhere else? Do I have to go to San Francisco or can I go somewhere a little bit less crazy expensive or a little less crazy busy?
Yael Hochberg (12:39):
And there’s always going to be the few that stick out, but I think all in all, I think we’ve managed to give some recognition to some really good programs that maybe would have gone less noticed because they’re not in the major startup centers that you tend to think of immediately like Boston, New York, or San Francisco.
Sean Ammirati (12:56):
Yeah. So I have a followup question but first, we think of tech as this big world, and then you just dropped Aziz’s name and it’s like, you know what? This is just a remarkably small community.
Sean Ammirati (13:07):
So, I’ve known him for a long time. I had no idea he was involved in this, but he actually funded some students of mine out of the accelerator I was mentioning, BlackLocus, which ultimately sold to Home Depot and was one of his early successes. I mean, he’s had a great career, but one of his early successes in venture. It continues to amaze me how small the startup tech community really is, that’s amazing.
Sean Ammirati (13:33):
So how do you think about corporate accelerators as it relates to your seed rankings?
Yael Hochberg (13:40):
Yeah. So corporate accelerators is an interesting topic to think about in this context, right? So the thing that’s always true about corporate accelerators is that the goals are a little bit different than when you start an accelerator as, say, two former VCs or former entrepreneurs who are, say, trying to build an economic development effort in a new community or are trying to find the best startups to feed to large venture funds in the Valley.
Yael Hochberg (14:11):
A lot of the corporate accelerators are really kind of built with this idea behind them that they’re either going to give the corporation some windows on new technology or find opportunities to partner with startups that have really interesting new technologies and kind of bring them into the fold and do a better job of integrating them into the production plans for a large corporate.
Yael Hochberg (14:37):
So there are a lot of strategic goals around corporate accelerators, which make it a little bit harder in terms of how do you think about them. So just to give you some ideas around some of the things that we encountered, so when we first started this out, I made a little bit of an effort together with the head of Microsoft’s accelerator to kind of think about how we could integrate the corporate accelerators into this.
Yael Hochberg (15:03):
And one of the difficulties that we encountered, which honestly has some parallels to some of the things we encounter, even just looking at within the U.S. is, what do you do with an accelerator in Mumbai or an accelerator in a developing country versus a developed country when you’re talking about metrics like dollars raised for valuations? How do you normalize those things?
Yael Hochberg (15:26):
Even within the U.S. with seed accelerators, we have that issue, right? What does it mean to be raising money in Silicon Valley versus to be raising money in Cincinnati or in Austin, Texas? You’re going to have lower valuations in those places. And that’s not necessarily a ding against the startup itself, it’s a function of how much money do you have to raise to be able to survive in Silicon Valley and to be able to hire and so on and so forth, and there are lots of things that play out in that.
Yael Hochberg (15:53):
When you think about corporate accelerators, you’re often thinking globally, how do you think about what that means when you’ve got global networks of programs? How do you measure metrics around strategic objectives? The strategic objectives differ, some of the corporates create accelerators that accelerate their own internal teams, some of them create accelerators that they’re deeply involved with, where the idea is you’re pursuing a beta of some new technology in, say, a connected car, for example.
Sean Ammirati (16:24):
Sure.
Yael Hochberg (16:24):
Some of them just are sort of, hire someone external to run something that brings in companies roughly in their industry vertical or in their areas of interest, so that members of the company can go out and be mentors and see what’s going on and get an eye towards what’s happening in that industry, right? And that varies a lot. So it’s very hard to measure the strategic objectives.
Yael Hochberg (16:51):
So we actually ultimately chose not to include most of the corporate accelerators in the rankings, precisely because it’s difficult. We include them and someone would say, “But you’re not speaking to my internal metrics around what I was supposed to achieve from a corporate objective perspective.”
Yael Hochberg (17:12):
But I think that the corporate accelerators are a particularly interesting bunch because they really do serve this very interesting purpose of trying to connect this brand new innovation that happens sometimes sort of beneath the radar to large corporates that sometimes are a little bit monolithic, that don’t know where to look for it, don’t know quite how to find it, and that are at risk of missing out on some of these technological leaps or new services or products that are very complimentary to what they’re doing. And even from the perspective of just missing out on enabling technologies that could be useful, that are not directly connected to your industry.
Yael Hochberg (17:53):
So I think it’s been very interesting to watch this phenomenon emerge and to see how different companies have been utilizing it differently.
Sean Ammirati (18:06):
So I think that’s interesting and I agree about the strategic objectives, but I would also say the funding mechanisms behind non-corporate accelerators have different objectives as well, right?
Sean Ammirati (18:19):
As someone who spends way too much of my time at accelerator demo days, I can tell you that some of them are run by economic development funds that have non-financial objectives and others are run that look more like LPs with capital objectives. And, I guess, the pushback would be that if you think about serving entrepreneurs who need to figure out who to talk to, if I’m an entrepreneur with an idea, it’s a real choice, do I go to the Techstars, one of their 50 corporate accelerators, or do I go to the accelerator down the street, or do I go to the accelerator in another city? Entrepreneurs don’t exclude that from their decision-making process.
Yael Hochberg (19:06):
Yeah. I think you’re spot on. And I think we’ve also reached a point with the corporate accelerator landscape where I think it’s going to become inescapable for us if we want to be able to provide guidance to entrepreneurs, as opposed to benchmarking one private accelerator against another. We’re at the point where some of those are going to have to be part of the conversation.
Yael Hochberg (19:28):
We had this discussion when we got to vertical-specific accelerators. At every iteration of the rankings, we try to have a rational discussion around where do we think is the appropriate place to sort of draw the line on what belongs in this group and what doesn’t.
Yael Hochberg (19:48):
I think when you look at it from an entrepreneur’s perspective, these are real choices, right? And they can’t be ignored. And that’s definitely something that comes up and that we’re constantly still thinking about.
Sean Ammirati (20:07):
I guess, just a point of clarification, which I’ve always assumed, and maybe I’m wrong, the Techstars ranking on your seed accelerator list, is that just their city accelerators or is that all of the Techstars accelerators?
Yael Hochberg (20:23):
That’s an excellent question. It’s been a year and a half… We’re close on the point where we’re ready to do the next round of the rankings and COVID did not help that process needless to say, so I’m trying to remember whether we’ve got the corporate accelerators in there.
Yael Hochberg (20:40):
I know that Techstars is kind enough to provide plenty of data on them. I don’t remember off the top of my head if we included them in the last round. But here and there, we’ve had a corporate accelerator who says, “I’m just fine being judged entirely on your valuation, fundraising, et cetera, metrics.”
Yael Hochberg (20:59):
My goals are to get that for my startups, that’s fine, and they’ll wind up being in the rankings. The difficulty comes when you don’t know whether the goal of the accelerator is to actually create performance for the startup or to create insights for the company itself.
Sean Ammirati (21:14):
Yeah. That’s interesting. Okay. That’s fascinating, and I think probably was more enlightening than you can even imagine for the people. Because, and you know this from the work you’re doing with your consulting firm, this is one of the handful of tools, these accelerators, is one of the handful of tools that corporations are thinking about picking up and using, as they say, “Okay, how do I not just make my product incrementally better? How do I not just make my business incrementally better, but how do I really transform my business?”
Sean Ammirati (21:48):
And through your consulting firm, you’ve been helping companies kind of tackle that problem. So, first, maybe just talk a little bit about how the firm came together and the types of stuff you do and then I’ll have some follow-up questions from there.
Yael Hochberg (22:02):
Yeah, absolutely. I landed in Houston, I want to say about six years ago, and if there’s anything you can say about Houston, it’s got a massive collection of Fortune 500 firms. It’s also got a massive collection of Fortune 500 firms specifically in, what I’ll call, generally the industrial space.
Yael Hochberg (22:23):
These are a lot of what we sometimes think of as old industries. Mind you, the oil and gas industry is one of the most technologically advanced industries on the planet. It’s not old in a technological sense at all. But they are very, very large, and unlike the classic technology firms that we think of, they’re a lot less agile in certain dimensions than other types of corporations that are out there.
Yael Hochberg (22:49):
And I think for a lot of these industries, the gale of creative destruction that we’ve witnessed happen in industry after industry hasn’t quite happened yet, but it’s right there, they’re staring it in the face right now.
Yael Hochberg (23:03):
And arriving in Houston and looking at this, this became very clear. And I’d get people coming in, people who were working in innovation, who were working in the corporate venturing world, in oil and gas in particular, just sort of wandering into our program and meeting me for coffee and saying, “We’re trying to think about innovation, what should we do? How do we think about this? How do we think about creating new lines of businesses?”
Yael Hochberg (23:32):
When a large major comes and talks about doing innovation and creating a new line of business, they’re not talking about, “Can I create a startup that can have 50 million dollars of revenue in 10 years?” They’re talking about, “Can I create a line of business that’s going to have 500 million dollars of revenue in five years? Tell me what that could be.”
Yael Hochberg (23:51):
And they’re working with a completely different set of resources. It’s a very different ball game than trying to fund a small startup that you hope is going to be worth a billion dollars. You’ll get someone who’s like, “I’ve been charged with creating five 20-billion-dollar businesses in the next four years. What do I do and how do I do this?”
Yael Hochberg (24:09):
Or “I’ve gone out and I’ve sourced ideas from across my corporation and now I’ve got these teams, but we’re not used to working on new ideas, we’re not used to working without the entire support mechanisms. We don’t know how to go from zero to one in this context, it’s just not what we normally would do in our day jobs.”
Yael Hochberg (24:27):
So we kept hearing these same sorts of themes and one day my co-worker and I looked at each other after the umpteenth person had wandered in and said, “I think it’s time for us to actively stop… Not just make this one-time coffee chats, but actually see if we can really create change.”
Yael Hochberg (24:48):
And I made Houston my home, I’m committed to seeing it not go through another version of the ’80s oil crisis, but to think about how we can expand the opportunities for the big companies that are there and what that can mean for the innovation ecosystem in the city, what that can mean for the economic development in the city, the diversity of industry in the city and so forth.
Yael Hochberg (25:11):
And yeah, so that’s how Flywheel was born. And we’ve run bespoke workshops where we apply frameworks and help managers and innovation teams or teams who are working on innovation ideas apply those frameworks in place to the ideas that they’re working on.
Yael Hochberg (25:32):
We’ve worked directly consulting with the innovation teams, helping them with anything from, “How do I go out and do market research on this? How do I model and figure out where I can be, and if I can meet the metrics I need? How do I go out and form partnerships in areas that are not as adjacent to our energy sector as they used to be?”
Yael Hochberg (25:53):
Anything from ideas that are so completely offbeat that they’re nowhere near energy applications, but they utilize assets that otherwise would need to be decommissioned and destroyed and disposed of, to complete new ideas on how to use waste products that come out of fracking and other things and turn those into real revenue streams, business plans, you name it. It’s just a lot of fun.
Yael Hochberg (26:20):
The other thing that we’ve done that I think is maybe even more impactful is really just working with the teams that have been put in place to try and lead innovation. I think one of the things that we see happen again and again, in some of these big corporations is someone creates an innovation team, and that innovation team is charged with “bringing innovation into the organization.”
Yael Hochberg (26:45):
And if you’re the person who’s sitting there in that innovation team, and you don’t have a bridge back to the business unit, and you don’t have a bridge back to the problems that are actually the top of mind for the people who are running those business units, it’s very hard to think about innovation.
Yael Hochberg (27:02):
So you bring in some digital companies and you try and talk about digital transformation, or you see some cool technologies that you think might have some application somewhere in the company. It’s very hard to drive adoption in those situations if you haven’t really built a structure that is customized to reach whatever the goals are for the corporation.
Yael Hochberg (27:22):
And I think there are certainly plenty of corporations who are happy to play innovation theater, but there are others who really want to drive innovation but just don’t know how to structure to meet their goals.
Yael Hochberg (27:31):
And for every company, depending on what industry they’re working in and what their organizational structure looks like and what the actual goals are for what they want to get out of innovation, the needs are different. And how you structure that, how you structure the processes, what you do, which activities you choose. Do I do an accelerator or an incubator, whatever? A contest within the firm? All of that depends on what you actually want to achieve.
Yael Hochberg (27:56):
And I think a lot of corporations know they need to do innovation, but don’t even know how to go through the process of thinking about what is it I’m actually trying to achieve with that innovation. So we try to help with all of that.
Sean Ammirati (28:08):
Yeah. I mean, I just agree with literally everything you just said. It’s interesting because my background was entrepreneur and then VC, and I sort of stumbled into corporate innovation. You’ve been, arguably, the leading researcher on entrepreneurship and kind of stumbled into this corporate innovation. One of the things that I think is interesting is when I think about the similarities and differences between three 20-somethings at an accelerator and a Fortune 500 company doing innovation. There are some ways where they’re very similar and there are some ways where they’re really different. I’m curious from where you sit, what are some of the biggest similarities and differences?
Yael Hochberg (28:48):
So, I think ultimately, every real entrepreneur, whether they’re sitting in a large corporation or they’re the three 20-year-olds that you’re talking about, they’re driven to make change, right? They’re driven to create something new that didn’t exist. And I think the best corporate entrepreneurs are doing exactly that.
Yael Hochberg (29:07):
And I think that, as well, when all is said and done, the best corporate entrepreneurs, despite the strategic objectives and the difference in scale, actually wind up going through a lot of the exact same process, using a lot of the exact same frameworks, and have to do a lot of the same thinking, right?
Yael Hochberg (29:24):
Is there an actual need for what you’re about to create? Who are you creating value for? What are they doing right now to solve the problem that they have? And why is your solution going to be better for them? Why should they be willing to pay for that? And how important is it to them? And really just trying to understand, is there a pain point you’re actually going to solve here and can you solve it at a reasonable cost relative to what you’ll be able to sell it for?
Yael Hochberg (29:52):
And those things are just constants, right? It doesn’t matter whether you’re creating a new line of business, new product within a corporation, or you’re doing a new app, new service, new whatever it might be, as a couple of college grads. So I think those things are very similar. I think the differences often come in the extent to which the teams are given the leeway to really do those things in a significant fashion.
Yael Hochberg (30:22):
A lot of the corporate innovation teams we’ve worked with have been assigned 25% to their innovation project. But they’ve got a day job that eventually they have to go back to, and a boss who’s asking them to do things, and they’re distracted and they don’t have the time to necessarily put in. Often, they’re handed a lot of money, almost too much money, and told to spend it. But they’re not always given the tools to go through the process and they’re not always given the time and the autonomy to go through the process. So that’s one thing.
Yael Hochberg (30:56):
The other thing that’s very different, I think, within a lot of these corporations is just the sharp difference between how people work in a corporation on a day-to-day basis and what it’s like to be in the trenches, starting something new, right? You don’t have that full org chart around you. Things move at a different pace and they have to move at a different pace. There’s less formality.
Yael Hochberg (31:28):
I always think about the general difficulties that you have when you’ve got a big company and a small startup that are trying to work with each other. And the big company is taking the contract, and every time their lawyers look at it. It’s small for the corporation so it gets pushed to the back of the desk and it takes six months. And then someone who didn’t look at it, in some other department, who has a say, suddenly changes something, and you go around and around.
Yael Hochberg (31:53):
And this goes on for 18 months and in the meanwhile, the startup is either dead or has found themselves a new market and a new customer. And then people go, “We couldn’t work with them. They won’t follow our procurement procedures” or whatever it might be. It’s just such a different feeling, right?
Yael Hochberg (32:10):
And even as an entrepreneurial team within the organization, if that’s what you’re surrounded with, it’s hard to break off when 75% of your time or 50% of your time is dedicated to working in one way, and the other 50% of your time, someone’s asking you flip a switch, and start thinking in a completely different fashion.
Yael Hochberg (32:31):
Or you send these teams in and you do let them work that way, and then when it gets to a certain point of development, you send them back into the business unit, and they’re suddenly back within the same strictures that they had to work with before, and can’t continue with the process that they’ve been working on so successfully for the last year.
Yael Hochberg (32:49):
So, those are things that I think really are about corporate mindset and about how prepared the corporation is to think about what the needs are for teams that are going to be working on more innovative projects. And there are some technology companies that do that really, really well, and some things that less technological-forward companies could do well to think about and copying them and emulating them.
Sean Ammirati (33:16):
Yeah. Yeah. I mean, there’s a lot there that’s right. It’s an interesting thing because this then becomes a really interesting lens, I think, into what tools and frameworks can companies borrow from traditional entrepreneurship, and which ones don’t work really well, right? Because these sort of similarities and differences sort of, I think, color the lenses of the tools and the best practices.
Sean Ammirati (33:43):
I want to be respectful of your time. We’re already over the time I had told you you would take for this, but let me just wrap with one last question for you and then also let us know where people can find you online, follow you online, that type of thing.
Sean Ammirati (33:56):
But the last question beyond that is just, what advice do you have for your students coming out of Rice today? So you have lots of talented students come through your program today. I always think it’s interesting, we’re at this unique inflection point along lots of different dimensions, what are you telling your students today to think about, focus on, as they navigate the beginnings of their careers?
Yael Hochberg (34:21):
So, clarifying question, today, as in, in the middle of a COVID pandemic?
Sean Ammirati (34:25):
I guess either would be relevant. I think maybe the world we live in today, pandemic certainly is part of it, but also just rapidly changing, and I think careers look a little different than they did even 15-20 years ago.
Yael Hochberg (34:41):
The thing I’ve been consistently telling my students for the last… Oh my God, I’ve been doing this for 17 or 18 years now. The thing I’ve been consistently telling my students since day one of becoming an educator, is it’s really important to be passionate about what you’re doing and to really like what you’re doing.
Yael Hochberg (35:01):
Don’t take the job because it pays 10, 15, 20 grand more if it’s going to make you miserable. Find something that you’re going to enjoy doing every day. And if you do that, you’re just going to be so much more successful and so much better at what you’re doing. You will ultimately wind up rising to where you need to go.
Yael Hochberg (35:18):
And the other thing that I often tell them is try, with whatever it is that you take on, to learn something new. Try to find roles where you can really stretch yourself, where you can learn and develop and build the skills that you want. It’s the same sort of thing as you might say to startups, what are your goals?
Yael Hochberg (35:37):
It’s the same thing I say to managers of big companies, what are your goals? So tell me what your goals are, let’s work backward. What do you need to know? What kind of experiences are you going to need to have to get to that perfect, ideal, Cinderella job that you really want to have 5-10 years from now?
Yael Hochberg (35:55):
And let’s work backwards from what it is that you think you want to be, that you want to do, that you’re so passionate about. And let’s figure out what those things are that will teach you the skills and give you the experience that you need in order to get there.
Yael Hochberg (36:08):
And I think if you always know that you’re doing something for a reason in order to get to somewhere you really want to be, it’s also a lot easier to get through the stage of your career that’s, no matter what, going to be scutwork, and maybe not so glamorous. But it gets you to the point where you can do the things that are really impactful. So I’d say that’s the major advice.
Sean Ammirati (36:28):
That’s awesome. And where can people find your work online, follow you, that kind of thing?
Yael Hochberg (36:33):
Yeah, sure. So I have a website, it’s www.yael-hochberg.com, and you can find Flywheel at flywheelinnovation.io, and you can find me on Twitter, @yaelhochberg, and yeah, or you can find me on the Rice website. It’s not that hard to Google my name, I pop up. You can probably find 20 ways to contact me just like that.
Sean Ammirati (37:01):
Perfect. I will include links to those three sites, at least, on the show notes though. Yeah, thanks so much for joining me today, I really appreciate it. And best of luck, stay safe out there.
