Scaling Innovation: Strategies for Startups and Corporations

Jonathan Morgan [00:00:00]:

Welcome to the Strategy Gap, a show for leaders who want to bridge the gap between strategy creation and strategy execution. I'm Jonathan Morgan, and along with Joe Krause, each episode we have conversations with strategy and operational leaders on key issues in strategic planning and strategy execution. If you're looking to actually accomplish your goals, this is the show for you. Joining us today is Abhay Jain. Abhay is a strategist and business builder who has built along career launching, advising, and operating businesses across media and technology. Actually, in 2016, he sold a consumer facing music platform he built from the ground up called Soundscope. And since then, he's been a management consultant, advising the likes of Facebook, Verizon, Fandom, Disney, and much more. All around strategic growth and innovation.

Jonathan Morgan [00:00:53]:

Most recently, he joined A+E Networks, a $16 billion film and television company, about three years ago as a vp of strategy, where he leads deal strategy and growth partnership strategy across a portfolio of business units. By understanding innovation, first as a startup founder, then as a consultant advising major corporations, and finally as an operator within a larger organization, he seen innovation succeed and fail from all angles, especially within the corporate environment. So, Abhay, welcome to the show.

Abhay Jain [00:01:24]:

Thanks for having me.

Jonathan Morgan [00:01:25]:

All right, well, to start things off, looking at your experience and the introduction I just went through, I'd love to talk about some of those similarities and differences between your experience both at small startups, your own personal company, large corporations, and then being kind of a bit in the middle as a strategy consultant. So what did that look like? What was similar? What was different? Maybe at a broader level.

Abhay Jain [00:01:47]:

So I'll talk about the similarities first, because there's very few of them. I do think generally there is a desire for exciting change across the board. However, the reality and where the difference come in is the capacity to execute and the motivation to execute. What I've noticed at startups is that people are hungry. People can wear many hats. They have the autonomy and they have the incentives to build something new, dangerous, exciting, and take a lot of more risks. And obviously on the corporate realm, it's really hard to rock the boat. It's really hard to innovate, to think through new ideas, to get internal buy in, to get funding.

Abhay Jain [00:02:29]:

And I think most importantly, incentives are just not aligned to innovate within a larger organization. You don't necessarily see financial results of the successes you make. You may get a promotion, but if you lose money, even a small amount, you're going to get punished. On top of that, think of quarterly earnings and reporting and meeting expectations. With all that in mind, it's just very, very hard to innovate unless the corporate truly builds an incubator or an investment vehicle by which startups can flourish.

Joe Krause [00:03:05]:

It's interesting you say startups, it's such a broad realm of companies that could fit into that category, right? So the best advice that I ever received, because Jonathan, I have been added achiever for a long time, me, since pretty much the very beginning, is that when you're hiring in the beginning through incentives and otherwise, you're looking for missionaries, people that are really believing in the mission, that want to do all the interesting and dangerous work that you mentioned, you know, sweep the floors all the way from. I head up sales, marketing, technology and I sweep the floors. But then you get to a certain stage where maybe you took on a few rounds of funding, you're still technically a startup, but there's less room on the cap table to get new people in. And so now you only can attract mercenaries, people that are there for other reasons. So has that been your experience as well? Whereas a sweet spot where like if you're at a startup and you have people that are all mission motivated, they have the right incentives in place, is there like a sweet spot of time that you've seen where they can use that to their advantage? Because eventually that goes away. So it's like if they don't make it work in that first couple of years, that's it. Or what if what it normally has been your experience in terms of leveraging their capacity to execute and their willingness to execute.

Abhay Jain [00:04:08]:

Joe, you hit the nail on the head when you're talking about a mission. But what I've noticed is the mission is tied to the culture of a company, and that denigrates at very, very different rates depending on the company you're working at. Companies like Airbnb grew to a massive, massive scale. But Brian Chesky's mission and the culture permeated through the entire organization for a very, very long time, way past the time when people consider them a startup. Other organizations quickly shift gears and become a matrix, bureaucratic organization very quickly. And I guess it's tied to incentives and the way people are evaluated as well. If I'm evaluated solely on the perceptions of my boss and my individual performance or my small team's performance, that's what I'm going to focus on optimizing for. If I am rewarded based on the success of the company, either through equity or through bonuses, I'm going to focus on the overall success.

Abhay Jain [00:05:17]:

If that means sweeping the floor or refilling the coffee, I'll do it, because if my buddy to the right has coffee, maybe the business do better and then we'll all do better. I think incentives are a big part of it. But like you said, as long as the mission stays core to people's reasons for being there, I think it's just a different beast when compared to larger startups where that's lost, or even corporates.

Jonathan Morgan [00:05:43]:

Yeah. And I think throughout either of those experiences, I know one of the things we connected on last time, Washington. How do you then move from the planning to execution?

Joe Krause [00:05:52]:

Maybe.

Jonathan Morgan [00:05:53]:

What are the different mindsets that you have to think about as a part of that? I know one passion area of yours is building plans and taking those small ideas and building them into something that's actually executable, that's not unique as a struggle to just small companies or large companies, something that probably is different periods within a single year or multi year period that those organizations are going to struggle with. I want to start in this conversation by thinking about you personally and your experience. How do you go about really finding those small ideas, learning about their potential, and building plans to execute them? Because I feel like that's a big struggle for organizations outside of that traditional strategic planning process.

Abhay Jain [00:06:33]:

Yep, that's a steady observation. I think a lot of folks have ideas, but they're reticent to bring them forward. And ideas start as most ideas. Do. You see a problem or you see an opportunity and you think of an elegant, simple solution, and either you want to bring that to life internally or by building it, or you want to acquire it. I think it has to be fostered the concept of innovation. One really cool thing I had seen done, and a c or A and e did it. Recently, Washington have training around improvisation.

Abhay Jain [00:07:10]:

Right. And I think that allowed people to be more open, riff on ideas, and I think those sort of processes and that sort of training is very, very fruitful. But I do think, you know, spending time allocating time to think through ideas or being open minded, it really just depends on managerial style. Of course, with all the pressure seen in media and entertainment, sometimes, you know, you're doing more with less. So there's less time and opportunity to pursue novel ideas. But I do think dedicating some time or some resources to just listening can be incredibly valuable. One particular instance of this I've noticed is the integration of generative AI across many organizations. There have been problems, there have been inefficiencies, and people are like, man, I wish we could do this.

Abhay Jain [00:08:02]:

I wish we can do that. I think a lot of generative AI tools are sort of bridging that gap and solving a lot of those problems. So I know I deviated a little bit from your question, but I think finding those ideas and getting people vocal to share those ideas is a critical first step. And I think it's a step that a lot of organizations overlook.

Joe Krause [00:08:21]:

It was interesting you mentioned innovation, and that usually involves people getting in a room. Interesting when I say room, Eric Schmidt this week with a former CEO of Google saying the reason why startups work is people work like hell, and that only happens in in person. And that's the reason why Google's behind. We'll leave that for another podcast. But when we talk about innovation typically happening in a room full of people, in a startup, it's probably a smaller room. At a large matrix organization, it's a bigger room. I'm sure you're familiar with the hippo effect, the highest paid person's opinion, where basically if that person divulges what they feel or think, then that pretty much sways the entire room and no one's truly believing or no one's going to stick their neck out. Because the point you made earlier, there's a little bit of upside to doing well, but there's a huge downside to doing even slightly poorly.

Joe Krause [00:09:06]:

So there really isn't much of reason for anybody to stick their head up and do anything. So have you found any techniques in your experience to, like, blunt the idea of group thing to the point where true innovation is happening and people do feel comfortable raising their hand and saying something that might be on the list of topics we don't discuss and really get to the heart of the matter? Or is there always that effect of people looking to see what everybody else's opinion is before they make their own?

Abhay Jain [00:09:31]:

So there isn't a silver bullet? Honestly, I do think, again for different podcasts, I don't necessarily think being in the same room all the time is helpful. What I have seen is when people aren't chastised for bringing bad ideas or untested ideas to the table, I think that helps people be more vocal and bring forth ideas. When I have done innovation projects for larger organizations, I've seen the most success when we have, we're sitting in a room, a big conference room, and we have our whiteboards and easels and sticky notes. We help identify problems and complaints within the organization, do our research, apply the double black diamond process by which we research, come back together. Having been in those rooms, you know, the first hour people are, it's the hippo effect. But, you know, with, after that first hour, people are vocal. They will generally want to share ideas and want to be creative and get their stickies on the whiteboard with concepts, I think. And then you have breakout rooms, I think I've seen that be very, very successful.

Abhay Jain [00:10:43]:

It just depends on the people in the room and the size of some of those innovation brainstorm sessions. But I've seen those be very, very successful, particularly when everyone in the room tries to look at each other like equals and has a philosophy that there's no bad ideas.

Jonathan Morgan [00:10:59]:

Yeah. I want to continue a little bit further on this topic of innovation. I think oftentimes it has a misnomer that the innovation is. It's just that, you know, that light bulb moment. It's the idea. It's the people like Steve Jobs are these idea guys. But when you look deeper, it's not the idea that actually was the innovation. It's the entire process.

Jonathan Morgan [00:11:18]:

And it's building a foundation within an organization for how we're going to not only ideate on what we need to do, but how we're going to understand the potential of the idea, how we're going to test out that idea, and ultimately how we're going to either execute or abandon that idea in favor of another one. So I'd love to get in that middle portion. In your experience on the topic of innovation, what have you seen to be successful from a process standpoint of how you're thinking about the potential and ultimately testing out that idea before you've spent multiple years on something that's a failure?

Abhay Jain [00:11:52]:

Another great question. I think at larger organizations, it's idea comes first, but then it's really about the narrative, right? The storytelling, the turning heads, because There's a lot of different stakeholders and getting them to believe that it's better than the status quo. Their risk is low, their return is high, the potential to move the needle is significant, is the first step. And then you have to get these champions in YOuR COrner, and then they have to be relentless. I think it's the individuals within the organization that are relentless are the real heroes. Ideas are great, but the person that after hearing no and maybe, or let's do more research here, or let's wait for the next fiscal, the people that are relentless are really the true heroes. And it's hard to find them, particularly at big organizations, when people have been there for 20 years and they feel like, you know, I've seen ideas like this come and go. You know, I used to walk 2 miles to go to school or whatever, you know, like those type of stories.

Abhay Jain [00:12:56]:

There's a lot of naysayers. But I think what I've Seen the most success is that the MOrE champions you can get in your corner for an idea, the more likely there is for like, like the greater likelihood for success. Then the resources are allocated, then the people are. People start working on it again. And it ties to mission too, right? What is a mission but just a narrative and a story that people get behind?

Joe Krause [00:13:20]:

And have you seen in your experience? I have this when I talk to clients, let's say because we work pretty much cross industry here at Achieva. We have clients in healthcare, we have nonprofits, we have manufacturing companies, you name it. And so it's a little bit easier when I'm talking to a healthcare institution like, you know what your mission is, you know exactly who you're serving. You can see it every day. Typically meeting in a hospital's meeting space. They walk out, they see the Cyberknife they just purchased, they see the people in the community they've been able to help. It's a little bit easier to paint that picture, but if you're a startup and you're creating a generative AI to help with a particular problem with parking tickets or something, how do you then potentially get people rallied around something like that? Because a lot of companies can make a lot of money and do really great on solving those problems. Like to Jonathan's point, the person who made salt did very well for themselves, but the person who made the packaging at McDonald's where it snaps and then you can pour the salt on the fries.

Joe Krause [00:14:12]:

That person's living on a yacht somewhere in the, in the Caribbean. They didn't reinvent salt, they didn't invent packaging, but they made a little bit of adhesive that it made the salt package snap. How do you get people rallied around maybe a topic that isn't super interesting and get a mission that actually makes them want to do the hard hours that going to make it a success because its not so easy with some of these companies that you read about, Trey.

Abhay Jain [00:14:32]:

No, I hear you. I think thats a great observation. What motivates and drives me is to make a market improvement on the world, right. And that can be through the invention of through salt or salt packaging. I find it super fascinating to see how peoples behaviors change with the addition of a new product. So I find it cool. So to each their own. Some people may find an innovation in insurance pricing to be profound and cool and motivating.

Abhay Jain [00:15:01]:

And other people find, like, a new heart valve tool to be, you know, save millions of lives. Like, to each their own. Obviously, it's a lot easier to rally behind saving millions of lives, but at the same time, you can also tell, like, you can also think through that. I'd like to live on a lot. Yeah. Would you like to live, learn a yacht? Let's work on this together, and we can both have.

Joe Krause [00:15:23]:

Yes, I'll answer that. Yes. Yes, I would. Thank you.

Abhay Jain [00:15:26]:

So, I mean, there's a lot of different ways of motivating, and it is about the stories you tell in the insurance scenario. Like, if you can help people save millions of dollars over time and provide more for their families, that's a win, and it can save lives. Just like, an additional heart valve, you know, that could save as a life. So it is about the narratives you tell. It is about people's individual motivations. Everyone's different, but different people find different things exciting.

Joe Krause [00:15:56]:

Yeah, it makes a good point. I mean, ultimately, if you made a packaging, let's say you did make packaging, and you actually got to go see it out in the marketplace and see people using it, that's got to be intrinsically motivating. So it's a good point. I always use the idea of, if you work in a widget factory, it's not so easy to make a mission. They draw a bright line to the mission. But there are ways in the way that you're saying it's being a good storyteller, especially if you're a founder, co founder. It's not just focusing on what it actually is, but the next layer on what it could do and what it does mean is interesting. And founders that do that effectively are able to draw in probably a bigger talent pool than ones that aren't there.

Joe Krause [00:16:32]:

Yes, I'm sure there's some people out there that are really excited about pricing improvements and insurance, but it's a smaller pond efficient, versus what you just mentioned, which is saving this and then what that means for the families. Bottom line, that's a bigger pond, efficient. It sounds like finding. Solving a problem first and then figuring out a way to really make sure that that problem is impacting people in a really genuine way. And you'll get the right people to join your startup and execute the strategy that you developed.

Abhay Jain [00:16:58]:

Yeah, I'll give you another good example. Like, if I told you, oh, I take commercial real estate and offices, and I put desks in them, and I charge people a lot of money, and I help pay the rent for these commercial real estate offices, you'd be like, cool. I don't know if I want to get behind that, but what if I told you it's a lifestyle of learning and startup incubation and look at it very, very differently?

Joe Krause [00:17:22]:

Makes sense. Where do I sign? That sounds great.

Jonathan Morgan [00:17:25]:

Yeah. Yeah. Honestly, this is probably a good segue to talk a little bit about the specific strategy that you've done a good portion of your career and particularly in your current role. It's I think when people think about strategy, it's strategic planning and ideas. But I know your current role is more focused on deal strategy, growth strategy, partnership strategy. Lead us into that conversation, talking a little bit about what that form of strategy entails and maybe how its applicable to this conversation across the board.

Abhay Jain [00:17:56]:

Robert 100%. So I look at strategy in a lot of different ways. Theres near term strategy and then theres medium term strategy and theres long term strategy. Long term strategy can be creating ten new opportunities for revenue across ad supported media. But a short term strategy is creating a more efficient and effective way to price our content when we explore new deals. And a lot of my day to day could be figuring out pricing, how to negotiate these deals, what are our targets for the next fiscal deals and new partnerships? But then at least once a quarter, I'm working on bigger picture ideas of what is the streaming landscape going to look like, how will that affect linear decline and what can we do to sort of hedge against the changing economic climate. So you always have to think of strategy as both short term and long term. I do spend a lot of my time on short term strategy, but you.

Joe Krause [00:19:03]:

Got to do both when you, a lot of times our clients struggle with this concept of short term versus long term. I know it sounds like a very simple question, but the big question we have is like, well, how long should our plan be? Because when I started eleven years ago doing this, I mean, the idea of a ten year plan was pretty common in certain industries, sometimes even a 30 year plan if you're in higher ed, but now it's more yearly plans, but then you lose a little something if you're not thinking further past the year. So when you're saying short term, medium term, long term, like what are your time horizons? I think that's helpful for our listeners because that comes up every conversation I have is what do you mean by short term? What do you mean by long term? Help us out. What have you seen?

Abhay Jain [00:19:38]:

It really depends on the organization, right? So if you think of the kingdom of Saudi Arabia and Neom. I think like almost ten years ago they launched Vision 2030. Right. So time horizons can be very, very different depending on who you talk to. Typically for an organization that is either public or very large like ours, short term is the end of the quarter or the next quarter, medium term is this fiscal or next fiscal and long term is five or ten years. More realistically it's three to five years. I mean that's, that's what I've seen it. Again, it just really depends on the organization.

Abhay Jain [00:20:22]:

For startups, for smaller startups, short term is two weeks, medium term is three months, long term is six to twelve months. Because things are changing so quickly, you don't know how much funding you might need, you want to hire a lot more people. The market's changing so quickly. Recently I've seen generative AI models for audio content evolve every two weeks. Just a different way of thinking thats helpful.

Joe Krause [00:20:53]:

Delineating difference between public and private. I mean, the idea of the quarterly earnings call is going to happen if you like it or not. So the idea of making sure youre ready for it and delivering on that is a different pressure than a startup. But a startup has the pressure. Probably their board meetings once a month are going to be a place that they want and their investor updates are going to be another place where theyre expecting to see some progress. So yeah, you have to time your ideas with how much Runway do we have? And things like that. So im hoping thats helpful for a lot of organizations that we work with. I think for the part that sometimes a little bit murkier are nonprofit clients that definitely have pressures.

Joe Krause [00:21:26]:

They have a business to run, but timing is a little more nebulous. If you're a healthcare institution, you're not technically going out of business. Your biggest fear is probably being absorbed by someone larger. It's definitely interesting that there's probably different timelines for every industry and even sub timelines for each of those. So it's a question that doesn't really have the best answer because it's so different for everyone. But I think what you just did provided a lot of clarity. Thank you.

Jonathan Morgan [00:21:46]:

Of course, yeah, and I think regardless of the timeframe, whether it's short, middle, or long term, one mistake I'll see a lot of organizations make is all of their strategy is what are things that we need to do, processes that we need to develop, technology we need to implement, people we need to hire. Maybe there's some focus on kind of the external and the customers, but a lot of time it's hey, how do we get better? I've heard a lot throughout our conversation today you mentioning services for individuals, services for customers. I remember from our last conversation, how do you think about in your role or previous roles that focus on the customer, things that they need and then work backwards from that as how these can be revenue generating opportunities for the organization?

Abhay Jain [00:22:32]:

So interesting you say that a lot of the discussion and conversation I have is around consumer attention. Where are people's eyeballs throughout the day? Where are they spending their time and really understand the customer segmented across geographies, age, gender, household income and trying to reach reach them where they live. If you think about the zeitgeist around having a direct to consumer relationship and owning your own platform, it sounds wonderful, right? But if your audience is not technologically savvy of a certain age, they're not going to be downloading your apps, they're not going to be watching your content on YouTube. And some of your strategy may have to focus towards more linear, right? Understanding your consumer, what their behaviors are and behavioral patterns is critical to developing a strategy for your content, specifically in media entertainment. When I was building my music startup, I realized that a lot of our fans and artists were the most active outside of our workday, right? So we had to build a team that was a customer service team that was dedicated to answering questions and responding to emails between 09:00 p.m. and 04:00 a.m. i, right. And those are things you don't typically think about until you truly understand the audience, get feedback, collect data.

Abhay Jain [00:24:05]:

But that focus on the consumer is critically important not only to structuring the business, but to understand how you distribute your content and also the content you create.

Joe Krause [00:24:14]:

Trey, interesting. You say that we have three mbas on the call today, but take that as you will. We love case studies, right? That's how, that's how you learn. And there's going to be one, I think, written probably in the next couple of years and different schools will be studying. It is the turnaround that Walmart has done with their e commerce business. It was a big article that came out in the last week or so where basically they were lagging behind Amazon and all these other huge conglomerates, and Walmart, who has a better relationship with their customers than Walmart in terms of just their breadth and depth. And so in the second quarter of fiscal year, 22, 6% of the revenue came from e commerce. So that wasn't very good and it was very below industry benchmarks.

Joe Krause [00:24:54]:

So as of the other day and going into the next kind of fiscal year, it's now hovering around 25%. So for a company that big and an organization that, that dynamic and Matrix and all that, to have that turnaround is going to be something that'll be studied for a while. So I guess what my point is, it really gives me hope to think that we've started this off saying as you get to, as you start swimming upstream to the biggest companies in the world, it is harder to enact change. But I think the part that maybe is really clear here is that if the change you're trying to enact has a very clear pot of gold at the end of the rainbow, it might be able then be easier to fight through some of the fits and starts that happen. Because I don't think anybody at Walmart's going, if somebody solves this e commerce problem, that's going to be really big for us. So we're going to give people a little bit more latitude. It sounds like the issue with change sometimes comes around mainly from they don't really see, whoever you're trying to sell this to doesn't really understand. They don't understand how it's going to translate into dollars and cents.

Joe Krause [00:25:49]:

So do you advocate for, and have you seen that be the main part of when you're having these conversations is always tying it back to something on the balance sheet that they can point to. To say that if this succeeds, here's what we can get. Or is that sometimes impossible? Given some ideas are a little bit nebulous, you need a little bit ability to kind of test it out. How have you seen to balance the intangible and the tangible?

Abhay Jain [00:26:12]:

So I think the biggest part of creating a narrative from what I've seen is showing the pot of gold at the end of, at the end of the rainbow. Right. Like any idea I have, I must quantify, right? There's always a way to quantify. Doesn't have to always be dollars. It can be hours of viewing or amount of engagement, right. That eventually may turn into dollars. Think about all those non revenue generating startups that people now are brilliant because they realize that it's the attention economy and this is grabbing a lot of attention. So there's always a way to quantify.

Abhay Jain [00:26:51]:

And any idea that I've seen be successful has a strong component of dollars to it. Eventually, the person championing e.com or Walmart probably pointed to a lot of analysis around how consumer shopping will evolve over the next three to five years. They had a lot of data that showed that there's an opportunity to win and take share from Amazon, given the affinity for the Walmart brand. So that just has to be there. And I think it's necessary. And not only does it have to be there, the numbers themselves have to move the needle. So for an organization like Walmart, if you said e commerce could generate $100 million in revenue, people will be like, who cares? Like, we do 100 million in diapers every quarter. Right.

Abhay Jain [00:27:46]:

So for them, it has to be like billions. And to make that case, you know, sometimes you have to do a lot of research. Sometimes those answers are hard to find. Sometimes you have to work with management consultancies to understand and parse what the world will look like the next three to five years.

Jonathan Morgan [00:28:03]:

Yeah. And honestly, I think there's probably no. As much as I'd love to continue the conversation for probably another 30 minutes on this topic, wherever, I probably no better place to stop it than that. Great insights right there and a great example from Walmart. Before we do close out, do you have one final question that we asked all of our guests and want to close out with you as well? And that's if you could think about your journey and your experience in small startups, to large corporations, to consulting in between, and go back and give yourself one piece of advice from when you were first starting your career and strategy, what would that advice be?

Abhay Jain [00:28:36]:

Good question. I got to think a little bit. I think it would be to try to not work so hard planning my career trajectory and sort of flowing with it. You know, knowing what you like and dislike and sort of riding the ebbs and flows. You know, a lot changed during COVID I had great ambitions. I made a list of goals when I started my career, like, oh, I'm an IPO company. I'm going to do this and do that. Your ideas of success change rapidly as you get older and you find passions you didn't know you had.

Abhay Jain [00:29:10]:

Who would have thought? I really like digesting large sets of data. Right. If you told me that when I was 23 or starting my first job, you'd be like, no, thank you. But you learn more about yourself day to day. And I feel like if I had put less pressure on myself to follow a certain career trajectory, I'd have a lot less stress throughout my career.

Jonathan Morgan [00:29:30]:

Yeah, I think that's probably good advice for everybody. Eliminate the stress as much as possible. So. Well, thank you very much for joining us today. It was a great conversation. I know our listeners, we'll appreciate it and we'll talk soon.

Abhay Jain [00:29:42]:

Great. Thank you so much. Thank you, sir.