STARTUPS  

AND  
ACCELERATING  
CORPORATE  
INNOVATION

Presented  by  

Anand  Sanwal
CEO  &  Co-­Founder

asanwal@cbinsights.com

@cbinsights
ABOUT  CB  INSIGHTS
A  unique   combination   of  data   science  and   machine   learning   to  help  you  see  what’s  next.

About   CB  Insights
Backed  by  the  National   Science  Foundation,   CB  Insights  uses  data  science  and  machine   learning   to  
help   our  customers  predict  what’s  next—their  next  customer,  their  next  investment,  the  next  market  they  
should  attack,  the  next  move  of  their  competitor  or   the  next  c ompany   they  s hould   acquire.

The  world’s   leading   global  

corporations   including   the  likes  of  
Cisco,  Salesforce,  Castrol  and   Gartner  
as  well  as  top  tier  VCs  including,   NEA,  
Upfront   Ventures,  RRE,   and  FirstMark  
Capital   rely  on  CB  Insights  to  make  
decisions  based  on   data,  not  decibels.  

To  make  y our   life  easier,   visit  

http://www.cbinsights.com

”A detailed discussion of data collection and how the company parses them is written by CB Insights’ data
scientists; it convincingly tells the story of scalability and accuracy for what they call “The Cruncher.”

From “Predictive Analytics And Novel Visualization Draw Customers To 'Must Have' Data” published April 8, 2015

2
A  FEW  OF  OUR  HAPPY  CUSTOMERS
The  most  publicly  reference-­able   customers  of  anyone   in  the  industry
“CB Insights' intuitive user interface, analytical capabilities,
and detailed investment information create a very powerful
tool for our team's research needs.”
Nate D’Anna
Corporate Development
Cisco
“CB Insights provides our team with a holistic and thematic
approach that really captures market activity….we've found
CBI to have the best access for the most accurate market
view.”
Jack Leeney
Portfolio Manager
Telefonica Ventures
“We have been looking for a tool that could give us the
ability to track, research and identify investment
opportunities. CB Insights provides this simply and in a
simple, easy to use interface. The depth of information
that we get is exactly what we need. Great product.”
Jonathan Tudor
Ventures Director
Castrol innoVentures
See what other customers have to say at
http://www.cbinsights.com/customer-love
“We're using CB Insights at Salesforce Ventures to
analyze industry trends that are relevant to our strategy. It's
helped improve our efficiency.”
Matt Garratt
Sr. Director, Corporate Development
Salesforce Ventures
“Designed by a VC insider who truly knows the space and
understands end-user needs.”
Greg Bae
Investments & Biz Dev
Comcast Ventures
“CB Insights perfectly illustrates what I expect today from
such online services to stay tuned to our fast-changing
Tech Landscape. Accurate and up-to-date data mash-ups,
intuitive UIs, smart data visualization capabilities and
direct API access… all packaged together with
straightforward pricing.”
Simon Mencarelli
Senior Manager, Strategic Planning
Dassault Systems
3
WHO  THE  HECK  AM  I?

Anand  Sanwal
CEO  &  Co-­Founder
Prior  to  launching  CB  Insights  in  2010,  Anand  managed  the  
$50  million  Chairman's  Innovation  F und  at  American  Express  
and  also  worked  in  their  corporate  venture  and  M&A  units.  
Before  American  Express,  he  worked  overseas  in  India,  
China  and  London  for  a  #  of  startup  companies.  He  is  the  
author  of  a  book  "Optimizing  Resource  Allocation"  and  has  
degrees  in  Chemical  Engineering  from  the  University  of  
Pennsylvania  and  in  finance  and  accounting  from  the  
@asanwal Wharton  School  of  Business.

asanwal@cbinsights.com
4
WHAT  WE’LL  COVER

1. The  faster  pace  of  disruption

2. Innovation  theater

3. Possibilities  not  problems  – The  “Yes,  

and…”  approach

4. Build,  Buy  or  Partner?

5. Unbundle  thyself
THE  FASTER  PACE  OF  DISRUPTION
What  got  you  here  won’t  get  you  there

6
TODAY’S  EMERGING  BUSINESS  MODELS  &  STARTUPS  
BECOME  TOMORROW’S  PROBLEMS

Source: Clay Christensen Disruptive Innovation Framework

@cbinsights 7
IT’S  HARDER  THAN  EVER  TO  STAY  ON  TOP…

The   lifespan   of   an   S&P  500   company   is  shorter   and   shorter.

@cbinsights 8
…AND  THE  THREATS  ARE  MULTIPLYING

Cost   to  Launch   a  Tech   Startup

Source:   Upfront   Ventures

@cbinsights 9
TECHNOLOGY  ADOPTION  IS  QUICKER  THAN  EVER

The   penetration   of   technology   happens   quicker   than   ever   before.   Time   is  not   on   your   side.

@cbinsights 10
 HOW  QUICKLY  DOES  ADOPTION  HAPPEN?

Source:   Wealthfront,   New  York   Post

@cbinsights 11
WHATSAPP  USER  GROWTH?

Source:   Facebook

@cbinsights 12
UNBUNDLING  WELLS  FARGO

All   the   startups   attacking   Wells   Fargo   (or   Citi   or   Bank   of  America)   product   &  service   lines.

Source:   https://www.cbinsights.com/blog/disrupting-­‐banking-­‐finte ch-­‐s tartups/

@cbinsights 13
WORRY  LESS  ABOUT  THESE  COMPETITORS

Disruptive,   discontinuous   innovation   rarely   comes   from   your   giant   competitive   peers.  

@cbinsights 14
AND  WORRY  MORE  ABOUT  DEATH  BY  A  THOUSAND  CUTS

There   is  an   army   of   emerging   players   that   are   attacking   legacy   players   at  an   individual   product   &  service   level.  

@cbinsights 15
SO  WHAT’S  A  CORPORATION  NOT TO  DO
The  perils  of  innovation  theater

16
INNOVATION  THEATER

@cbinsights 17
HIRE  A  CHEF

@cbinsights 18
BRING  ON  AN  INNOVATION  SHERPA  OR  DIGITAL  PROPHET

@cbinsights 19
HAVE  A  STARTUP’Y  OFFICE

open  office xBox

@cbinsights 20
VISIT  SILICON  VALLEY  – “EMBRACE  INNOVATION”

@cbinsights 21
LAUNCH  AN  ACCELERATOR  – GET  ARTICLE  IN  TECHCRUNCH

@cbinsights 22
CASUAL  DRESS  CODE

@cbinsights 23
HIRE  SOMEONE  WHO  PLATEAUED  AT  GOOGLE  OR  APPLE  

@cbinsights 24
POSSIBILITIES  NOT  PROBLEMS
The  “Yes,  and…”  approach

25
THE  HEAD-­IN-­SAND  DISMISSIVE  APPROACH  TO  DEALING  
WITH  INNOVATION,  STARTUPS  &  THREATS

Brian  Moynihan,  CEO  of  

America’s  second-­largest  bank  by  
assets,  said  most  of  the  robo-­
advisers  are  going  after  investors  
who  aren’t  rich  enough  for  the  
bank  to  worry  about.

They  are  below  the  bank’s  wealth  

“cut  off,”  Moynihan  said  on  the  
bank’s  quarterly  earnings  call,  “for  
lack  of  a  better  term.”

Source: Q1 2015 Bank of America earnings call recap by Quartz

@cbinsights 26
THE  END  STATE  FOR  MOST  STARTUPS  IS  FAILURE

@cbinsights source:  https://www.cbinsights.com/blog/venture-­‐c apital-­‐funnel/ 27

TONS  OF  STARTUPS  THAT  MIGHT  IMPACT  YOUR  INDUSTRY  
WILL  FAIL

@cbinsights 28
BUT  THE  ONES  THAT  SURVIVE  BECOME  THE  PROBLEM

@cbinsights 29
BUT  MOST  INCUMBENTS  FOCUS  ON  WHY  THEY’RE  BETTER  
AND/OR  WHY  THE  STARTUPS  WILL  FAIL

“Our  brand  is  trusted…”

“Supply  chain  is  complex…”

“This  is  a  highly  regulated  industry….”

“We’ve  been  doing  this  for  140  years….”

“Clients  trust  us.  They  won’t  trust  some  startup….”

“We  have  a  cost  advantage….”

“Our  risk  management  capabilities  are  proven….”

@cbinsights 30
STOP  DISMISSING  STARTUPS!  IT  IS  INTELLECTUALLY  LAZY.    
DO  THIS>>  

@cbinsights 31
HOMEWORK  #1  – FOCUS  ON  POSSIBILITIES  NOT  PROBLEMS

1. Identify  a  startup  or  emerging  industry  

that  you’ve  previously  dismissed

2. Write  down  3  to  5  reasons  you  think  it  

might  work  and  become  successful

3. Email  me  your  answers  –

asanwal@cbinsights.com

@cbinsights 32
HOMEWORK  #1  – WHY?

• Forcing  a  cultural  mindset  shift  more  

than  anything

• Optimism  leads  to  innovation.  “Yes,  

and…”  is  inherently  optimistic

@cbinsights 33
BUILD,  BUY  OR  PARTNER
How  are  corporations  doing  it  today?
BUILD
Incremental  or  disruptive?

35
CORPORATIONS  ARE  GOOD  AT  FLAVOR  INNOVATION

@cbinsights 51
ONE  OPTION:  COPY  EMERGING  STRATEGIES  WHICH  HAVE  
TRACTION

@cbinsights 52
THE  DISRUPTIVE  MOONSHOTS  ARE  OFTEN  HARDER

@cbinsights 53
PARTNER
Really  access  innovation  or  good  PR
HAVE  SKIN  IN  THE  GAME  OR  DON’T  WASTE  STARTUP  TIME

“Joint value
creation”

@CBINSIGHTS 40
PARTNER  IN  EXCHANGE  FOR  EQUITY  – MISALIGNED  
INCENTIVES?

• $25  million  investment

• Howard  Schultz  joined  board

• $56  million  loss  to  Square  (discounted  card  fees)

@cbinsights 56
NORDSTROM  DOES  IT  WELL

Source: https://www.cbinsights.com/blog/nordstrom-e-commerce-case-study/

@cbinsights 57
WALK  BEFORE  YOU  RUN  

@cbinsights 58
BUY
A  nibble  or  a  full  bite?

44
CORPORATE  VC  TODAY:  FROM  TECH  TO  HEALTHCARE  TO  
FINANCE  TO  ENERGY  TO  MEDIA

@cbinsights 60
2015:  CORPORATE  VENTURE  CAPITAL  ON  TRACK  FOR  NEW  
HIGHS

The   first   half   of   2015   saw   corporate   VCs  participate   in   357   deals   totaling   $7.85B.   At  the   current   run   rate,  
corporate   VC   deal   activity   is  on   track   to  top   2014’s   high.   Funding   dollars   involving   corporate   VC   arms   has  
topped   $3B   in   each   of  the   last   3  quarters.

@cbinsights

@cbinsights 61
CVC  DEAL  SIZES  ARE  NOW  DECIDEDLY  LARGER  THAN  VC  
OVERALL

Average   deal   size  with   corporate   venture   participation   has   topped   $21M+   in   five   of  the   last   six  quarters.   In  
contrast,   average   corporate   venture   deal   sizes   stood   ≤ $17M   in   2013.

@cbinsights 62
CORPORATE  VCs  PARTICIPATE  IN  1  OF  EVERY  5  VC  DEALS  
IN  2015

Corporate   venture   firms   participated   in   just   over   20%   of  the   1,768   venture-­back ed   rounds   in   the   first   half   of  
2015.   That’s   compared   to   CVCs   participating   in   15%   of  venture   deals   in   H1   2013.

@cbinsights 63
NUMBER  OF  ACTIVE  CORPORATE  VENTURE  FIRMS  IS  UP  
82%  SINCE  Q1’12

106   different   corporate   VC   firms   completed   an   investment   in   Q1’15   – a   multi-­year   high.   That’s   a  82%   jump  
from   the   same   quarter   three   years   ago.

@cbinsights 64
MORE  THAN  HALF  OF  ALL  US  UNICORNS  ARE  BACKED  BY  
CORPORATE  VCs

It’s  not   just  VCs   who   are   hunting   unicorns.   Among   the   74   US   private   companies   valued   at  $1B   or   more,  
51%   have   a  corporate   venture   unit   as  an   investor.

Source: https://www.cbinsights.com/blog/corporate-venture-unicorns/

@cbinsights 65
CORPORATE  VCs  WITH  THE  MOST  UNICORNS

Source: https://www.cbinsights.com/blog/corporate-venture-unicorns/

@cbinsights 66
INTEL  CAPITAL  TOPS  CORPORATE  VC  FIRMS  BY  EXITS

*Exits  by  Comcast  Interactive  Capital  since  2011  were  counted  under  Comcast  Ventures

@cbinsights 67
THE  UNICORNS  WITH  THE  MOST  STRATEGIC  ACQUIRERS

Source: https://www.cbinsights.com/blog/corporate-venture-unicorns/

@cbinsights 68
KLEINER  PERKINS  IS  THE  MOST  FREQUENT  VENTURE  
CAPITAL  CO-­INVESTOR  WITH  CVCs

Kleiner Perkins and NEA are the most frequent co-investors with CVCs since 2010 followed by Andreessen Horowitz.

Source: https://www.cbinsights.com/blog/top-venture-capital-corporate-syndicate/

@cbinsights 69
THE  MOST  ACTIVE  CORPORATE  VENTURE  CAPITAL  GROUPS

CVC Investor Recent New Investments

@cbinsights 70
THE  MOST  ACTIVE  CORPORATE  VENTURE  CAPITAL  GROUPS

CVC Investor Recent New Investments

@cbinsights 71
DIGITAL  HEALTH  /  HEALTH  IT  DEALS  BY  CVCs  CLIMBING

Corporate   venture   deals   into   the   growing   digital   health   and   health   IT  arena   rose   44%   between   2011   and  
2014.

NOTABLE  CVC  
INVESTORS

Select investments

Select investments

Select investments

@cbinsights 72
FIN  TECH  DEALS  BY  CVCs  JUMP

Corporate venture deals into financial tech or ‘fin tech’ ticked up 75% between 2011 and 2014.

NOTABLE  CVC  
INVESTORS

Select investments

Select investments

Select investments

@cbinsights 73
CYBERSECURITY  CVC  DEALS  HIT  HIGH  IN  2014

As reported threats continue to rise, corporate venture deals into cybersecurity rose 25% on a YoY basis in 2014 and hit a
quarterly high in Q3’14.

NOTABLE  CVC  
INVESTORS

Select investments

Select investments

@cbinsights 74
COMPARING  SELECT  CORPORATE  VCs:  TECH

Number of New Median Deal Size Most Frequent

CVC Investor Stage
Deals Per Year

50-60 $8M Seed

30-40 Series B
$11M

10-20 Series B
$13M

20-30 $15M Series A

10-20 $15M Series C

@cbinsights 75
COMPARING  SELECT  CORPORATE  VCs:  HEALTHCARE

Number of New Median Deal Size Most Frequent

CVC Investor Stage
Deals Per Year

1-10 $17M Series A

1-10 $14M Series A

1-10 $9M Series C

1-10 $10M Series A

1-10 $24M Series B

@cbinsights 76
COMPARING  SELECT  CORPORATE  VCs:  MEDIA

Number of New Median Deal Size Most Frequent

CVC Investor Stage
Deals Per Year

10-20 $10M Series A

1-10 $15M Series B

1-10 Series B
$8M

1-10 $3M Seed

1-10 $6M Series C

@cbinsights 77
COMPARING  SELECT  CORPORATE  VCs:  FINANCIAL  
SERVICES

Number of New Median Deal Size Most Frequent

CVC Investor Stage
Deals Per Year

1-10 $19M Series C

1-10 $28M Series B

1-10 $14M Series D

1-10 $19M Series C

@cbinsights 78
Technology  companies,  especially  VC-­backed  ones,  are  
increasingly  (and  somewhat  artificially)  expensive

@cbinsights 79
The  Dichotomy  – Exiting  for  $1B  way  harder  than  financing

@cbinsights 80
There  are  deals  at  the  low  end  but  for  many  corporations  who  
want  needle-­moving  M&A,  this  doesn’t  work

@cbinsights 81
Top  Acquirers  of  2015

Top Tech Acquirers: Q1'15 - Q3'15

1-5 6 - 10 11 - 15
Microsoft Snapdeal Tripadvisor
Google IBM Motorsport.com
Accenture Zealot Networks FoodPanda
Yello Mobile Amazon Apple Inc.
j2 Global Twitter Rocket Internet

@cbinsights 82
UNBUNDLE  THYSELF
Who  might  eat  our  lunch

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UNBUNDLING  FEDEX

Source:   https://www.cbinsights.com/blog/sta rtups-­‐dis rupting-­‐fe de x-­‐u ps/

@cbinsights 35
UNBUNDLING  APPLE  iOS

Source:   https://www.cbinsights.com/blog/unbundling-­‐apple-­‐ios/
@cbinsights 36
UNBUNDLING  STARWOOD  (THE  HOTEL)

Source:   https://www.cbinsights.com/blog/disrupting-­‐european-­‐banking-­‐finte ch-­‐s tartups/

@cbinsights 37
UNBUNDLING  STARWOOD  (THE  HOTEL)

Source:   https://www.cbinsights.com/blog/unbundling-­‐t he-­‐h ote l/

@cbinsights 38
DISRUPTING  WALKING

Source:   https://www.cbinsights.com/blog/disrupting-­‐walking-­‐t rans porta tion-­‐sta rtups/

@cbinsights 39
UNBUNDLING  THE  AUTOMOBILE

Source:   https://www.cbinsights.com/blog/sta rtups-­‐drive-­‐auto-­‐indus try-­‐dis ruption/

@cbinsights 40
UNBUNDLING  PAYCHEX

Source:   https://www.cbinsights.com/blog/disrupting-­‐walking-­‐t rans porta tion-­‐sta rtups/

@cbinsights 41
UNBUNDLING  HSBC

Source:   https://www.cbinsights.com/blog/disrupting-­‐european-­‐banking-­‐finte ch-­‐s tartups/

@cbinsights 42
UNBUNDLING  HONEYWELL

Source:   https://www.cbinsights.com/blog/disrupting-­‐honeywe ll-­‐s tartups/

@cbinsights 43
UNBUNDLING  P&G

Source:   https://www.cbinsights.com/blog/disrupting-­‐procte r-­‐gamble-­‐c pg-­‐sta rtups/

@cbinsights 44
UNBUNDLING  CRAIGSLIST

Source:   https://www.cbinsights.com/blog/craigslist-­‐unbundling/
@cbinsights 45
HOMEWORK  #2  – WHO  ARE  THE  ATTACKERS?
The  players  that  might  inflict  upon  us  death  by  a  thousand  cuts

• List  your  business’   products   &  services   (or  use  

your  website   if  possible)

• Identify   all  the  startups   who  are  attacking   each  

product   &  service  
(include  the  ones  you  think  are  stupid.  Remember  “Yes,  and…”)

• Study   those   gaining   traction,   look  for  themes  

among   business   models,   etc

• Send   me  what   you  come  up  with  

(asanwal@cbinsights.com)
@cbinsights 46
HOMEWORK  #2  – WHY?

• Help  you  understand  the  landscape  in  

one  fell  swoop  (need  to  refresh  this  
over  time)

• Catalyzes  action.  Visceral  view  into  

threats  works  to  get  leadership  
motivated

@cbinsights 47
HOMEWORK  #2  -­ AUTOMATING  THE  IDENTIFICATION  OF  
STARTUPS  WITH  MOMENTUM  (THE  ONES  TO  WATCH)

Stalk  the  smart   money Identify   performance   metrics   momentum

Get   in  front   of   the   best  
startups   early

Understand   signals   of  
growth

• Hiring   activity
• Web   traffic
• Media   chatter
• Social   media   volume
• Sentiment
• Industry   health
• Investor   quality
• Tech/software   stack

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Web | www.cbinsights.com

Twitter | @cbinsights

Email | asanwal@cbinsights.com

Tel | 212.292.3148

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