EiG: Big companies told to ‘stop protecting your business’

EiG: Big companies told to ‘stop protecting your business’

Wednesday, October 21, 2015 Totally Gaming
Embrace disruption and entrepreneurial spirit, Sood urges industry

Big businesses need to nurture the entrepreneurial spirit of their start-up acquisitions and embrace disruption if they are to maximise the benefits of their investments, according to Rahul Sood the Creator of Microsoft Ventures and CEO of Unikrn.

In a fascinating ‘Outside-in’ session at EiG 2015, Sood spoke of the vital lessons from selling a start-up to a larger company, and the impact the process had on innovation.

Sood revealed that the takeover of his start-up VoodooPC by technology giant Hewlett Packard and the subsequent integration process had been a “jarring” experience that had stifled his creativity.

He went on to create Microsoft Ventures, through which seven accelerators were established around the world.

“When we were acquired by HP I refused to move to California,” Sood said at the session entitled ‘Turning ideas into blockbuster products’ at Arena Berlin today (Wednesday).

“I was arrogant. I thought we could run it from the outside, but if you want to infiltrate a culture, you have to be on the inside.

“Over time you’ll find that there are people in big companies that like to say ‘No’ for the sake of it. You have to be empathetic and understand how you can turn a ‘No’ into a ‘Yes’.

“At Microsoft I must have got about 100 ‘Nos’ to the incubation fund before getting a ‘Yes’, but I was able to change that because I was on the inside.

“The problem is that people aren’t encouraged to take risks in larger companies. If all you do is protect your business then you are protecting a dying business.”

However, Sood added that such M&A opportunities can be positive for all concerned, if the cultures of the partners are complementary and the timing is right.

“I’m not a fan of start-ups getting immediately snapped up by bigger companies,” Sood added.

“The important thing is to take the best of what the big business offers in terms of structure, systems and good processes that can bring scale.

“The small company should bring an entrepreneurial culture. However, you have to have like-minded teams on both sides to make that happen.

“Above all, big companies need to stop trying to protect their business and should embrace disruption.”

Sood is now the CEO of gaming and e-sports company Unikrn, which entered into a global partnership with Tabcorp in April.

As previously reported by TotallyGaming.com, Unikrn has secured funding in recent months from investors such as Mark Cuban, the owner of the Dallas Mavericks NBA basketball franchise.

Sood previously told TotallyGaming.com that e-sports is an industry “that few understand yet so many follow”.

“The timing in e-sports couldn’t be better right now,” Sood added at Arena Berlin.

“The fan base for e-sports is very large. It is currently about the same as the fan base for ice hockey’s NHL, and by 2017 it will be as large as American football’s NFL.

“I would say that we’ve achieved the impossible in the first few months at Unikrn. We have raised $10m (€8.8m) and increased our reach to 10 million users.

“It’s been insane and it’s great because part of that acceleration was thanks to Tabcorp. They knew exactly what we needed to do and they helped us with liquidity and risk management.

“So there are good things that come out of a big company, and Tabcorp is a fine example. But they are also taking from us an incredible, innovative start-up culture.”

For all of the latest updates from EiG 2015, click here to check out our live blog.

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