Why Start-ups Fail to Engage Corporates | Steve Cook

In this episode of Lab to Market Leadership, Chris sits down with Steve Cook, a 22-year BP veteran who helped launch Launchpad, BP’s growth-stage accelerator.  Steve talks with Chris about where most advanced science and engineering start-ups go wrong when they’re approaching corporates, and what entrepreneurs and executives can do to improve their odds.  Don't miss this deep dive into how advanced science and engineering startups can improve their odds of commercial success. 

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Podcast Production: Beauxhaus

Chapters

• 0:00 00:00 Introduction: Corporate Risk Management vs. Startup Uncertainty
• 1:20 Guest Introduction: Stephen Cook's Journey with BP
• 3:27 Navigating Corporate Structures as a Startup
• 4:55 Understanding Understanding Corporate Strategy and Innovation Groups
• 9:14 Challenges and Strategies for Startups in Corporate Partnerships
• 13:44 The Importance of Clear Communication and Expectations
• 17:48 The Reality of Corporate-Startup Collaborations
• 25:21 The Role of Corporate Venture Capital and Sponsorship
• 36:42 Lessons from BP Launchpad
• 46:11 Conclusion: Insights and Reflections

Transcript

Steve Cook: 0:00

But in many cases, large corporates are not moved by enthusiasm, by passion, by emotion. They just want to see the data. They want to know what kind of a risk they're taking, and they want to see hard evidence that it's not going to, you know, cause a factory process to fall over, and they want the technical validation. And everybody in a large corporate is, whether they believe themselves to be or not, are largely working to manage risk. And If you're in a startup, you're not managing risk, you're managing uncertainty and you're generating, you know, passion and enthusiasm when you're selling a vision, because you don't really have that much of a problem right now to point at.

Chris Reichhelm: 0:42

Welcome to the Lab to Market Leadership podcast. Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market. We're on a mission to change that. My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech Leaders. Each week we speak with some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey. Join us. If you're an entrepreneur trying to get on the radar of a large corporate, you need to listen to this week's podcast. I'm talking to Stephen Cook, who was a 22 year executive with BP. He served in commercial and strategy roles and had a hand in setting up and running BP Launchpad and for a little while, BP Ventures. Now Launchpad was BP's accelerator group for growth stage companies. And Ventures was their corporate venture group. And so Stephen brings with him the perspective of operating in a corporate and dealing with startups, operating within an Accelerator and a Ventures group. And more recently, he's been working with startups in his capacity as a non executive director, advisor, and chair. So I'm hoping to speak with Stephen really about what it takes to To just get on the radar, the journey, the lab to market journey involving corporates, how they see startups and what startups can learn from the corporate perspective. Let's have a listen. Steve, thank you so much for joining me.

Steve Cook: 2:31

No problem at all, Chris. Great to be here. Thanks for having me.

Chris Reichhelm: 2:35

A pleasure. Um, this is all about how to get companies from labs to the market. And I'm really grateful to have you on because you bring some really interesting perspective to this. You're, you bring the experience of being at a leading energy major. So the corporate perspective. You, uh, you've played a number of roles at that major, including as investor and as leader of an accelerator. So you've got that perspective. And now more recently with your experience in startups, you also bring experience from that side of the table. So you're, you know, I think our audience is going to be very interested in hearing from you. Uh, what you have to say. Where I want to start though, I want to go back to the corporate experience, which I know you've been out of now for a couple of years, but I want to start there. And I want to, I want to pretend that I'm an energy technology entrepreneur and I want to somehow get on BP's radar. How do I do that?

Steve Cook: 3:49

It's a, it's a very good question and there's a lot to, to a potential answer to that. But I guess the first thing I would say is it's hard to do it. It's difficult. It's complex. It's, um, multifaceted. It's grueling. Um, and you know, I wouldn't want to pretend otherwise. I mean, people, people I'm sure get lucky in, uh, in some instances and have a, have a great ride through a corporate conversation into something productive. But even when the willingness is there on the side of the corporate, I would say, you know, expect it to take time, expect it to be hard work, expect there to be periods of silence where nobody seems to be responding or is, is sort of lost in um, So that's the first thing to say is there's no, there's no two ways around it. These, these kinds of, uh, conversations of getting them to some kind of conclusion, uh, hard work. Um.

Chris Reichhelm: 4:45

Where should I start?

Steve Cook: 4:48

Yeah. And so that's, that's the first thing is I would say there are, there are probably two or three really important things to think about. The first is, what do you understand about that company is that the corporate strategy? And there's an awful lot out there in the public domain if you do some homework, that you can glean about a company's strategy. And that's not just looking at the annual report, it's listening to investor presentations and the Q& A are particularly sometimes quite revealing. You know, you can access those through most companies websites, investor presentations. Um, you can look at where current partnerships are, where investments have gone recently, um, speeches from the CEO, you know, so doing some homework about the strategic intent, the strategic priorities and where the money is really being invested. in that company is a really important place to start. So try and understand what's strategically important to that customer or that company that you're targeting. That's, that's the first thing, right? Um, the second thing is where, how do you start a conversation with an enormous multinational company? Who do you start the conversation with? How? Um, and what I would say is for a lot of, um, tech or deep tech entrepreneurs running startups that are highly technology oriented. Targeting somebody in the innovation groups of these large corporates is probably a good place to start. And then the innovation group is a deliberately sort of amorphous term I've used there. It can cover The R& D organization, it can cover corporate venture capital groups. It can cover, uh, the teams that are running incubators and accelerators in those companies. Um, so all of, all of that, and it can sometimes even cover people who are looking at business model innovation on the technology innovation. So, um, reaching out and you can, You can quite easily find out from corporate's website, what kind of innovation group that they have, what kind of activities go on there. And then through LinkedIn, uh, or the, uh, the contact page on those websites, you can, you can usually find a specific way into somebody who wants and is interested in new ideas in the, in the domain, broad domain that company operates. Um, so that, that typically is a good starting point, I'd say, and, um, and you also

Chris Reichhelm: 7:39

Can these innovation groups, though, if I jump in there real quick, can, you know, can these innovations, can these innovation groups, can they help me identify where the pain is likely to exist within the corporate? You know, take, for example, in the case of BP. Would the innovation group be, really understand where the pain points are held within the broader organization?

Steve Cook: 8:06

I mean, the obvious answer is that they should do if the organization is working properly. That's not always the case though. And in many cases, I think my experience would say that the people in those innovation groups can be quite medium to long term focused and thinking beyond the immediate pain points, horizons of the operational entities. Um, but asking those kinds of questions that you just posed to me, I think is a super important way of trying to flush out who knows what, because in some organizations, um, the innovation groups are very directly connected to the operating And, you know, have a very specific remit that takes them out only five years. And so understanding what the remit of those innovation groups are and the time horizon in particular, whether there's a marriage between the time horizon in which you're looking for something as a small company, whether that's a purchasing decision or whether that's help, data or operational asset access is at least one thing to understand. Um, and it also

Chris Reichhelm: 9:14

Will my size, my stage of development, will that kind of determine where I should go roughly within the organization, where I should start from?

Steve Cook: 9:22

Yes, definitely. That, I would say, and what I was also just about to say was that, um, it's the maturity, but also it's the kind of deal that you're trying to strike. Are you looking for investment? Are you looking for a place to do a pilot? Are you looking for validation of your technical solution? Are you looking at you a bit more mature and are you looking to sell a productized solution? Um, but I think in most cases somewhere in the innovation group, and like I say, I do include corporate venture capital groups and incubators and accelerators that are run by these corporates as part of that broad innovation unit. They may not sit in the same place in the organization though. You know, sometimes a corporate VC group will sit in the finance organization or it will sit in the strategy organization, not in the technology or R&D organization. So, um, you know, they may sit in different places. Uh, but, but yeah, the maturity is important. So if you are, um, a very early stage startup, a seed or pre seed stage startup, then, you know, you're in all likelihood what you're looking to do potentially is to participate in an accelerator or an incubator program or project running. Um, and there are several of those, and they run very public processes to participate, and they are very clear sometimes about the problem statement that they're trying to solve, or the theme area that they're trying to attract solutions into. So, that's a good place to start there. Um, corporate VCs typically, you know, start investing a little bit later when there's some more clarity about what the product is. So, that's early revenue from, uh, from some initial commercial contracts. And then there's potentially a line of sight to deploying something within the holding period in the portfolio into the, uh, into the corporation. Um, and so that's if you, if you're looking for that kind of support, if you're looking to sell into that corporate with something that is You know, something you sold a couple of times before to others, and you're now looking to expand your customer base, then I still think quite often it's the innovation group that is a good place to start, because they can then work to connect you into different bits of the organization. It's very difficult, for example, to directly approach an operating unit or a manufacturing unit, even though they may have a very acute problem, those people are likely to be consumed with The tyranny of the urgent in their day to day lives, and are not going to have the time or headspace to engage with a small startup in thinking about what they can offer or innovate. Their remit is typically not to innovate, it's to operate. Um, you know, they, they can be very useful.

Chris Reichhelm: 12:27

That's really interesting what you just said there. Actually, you said their remit is to operate, not innovate.

Steve Cook: 12:35

It's to keep the plant going, is to make sure it doesn't break and stays online. They're typically thinking about uptime, availability, resilience, and cost.

Chris Reichhelm: 12:47

So that's, I think that's a really interesting, uh, you know, reflection, you know, because so many companies that I've worked with, you've probably seen too, they get this pressure from their board. They have some kind of novel platform technology. They're still in the process of turning that into a solution. So they don't fully know where it starts and ends. They think they, you know, have a sense. They may have a little bit of validation, but they're seeking more. And so they see a big, uh, you know, a big beast like BP. as a source of a first potential contract and that validation and a partner for the pilot and, you know, maybe an investment and all of these things. How, how in your experience, how likely are each of these things to happen typically?

Steve Cook: 13:44

Um, I think the, the, the get out answer though is it depends, but, but I'll say a bit more than that, which is, um, I think, and you're alluding to in your question, I think it's, it's really important to be very clear as a small company approaching a large corporation, what it is that you want and to be able to articulate that in a very clear way. So are you looking for access to data? Are you looking for a place to do a pilot? Are you looking for the first commercial deployment opportunity and therefore they're going to be taking some risk? Are you looking at them as an early adopter, third or fourth deployment, or are you on a scaling journey, and you're simply approaching them as, you know, part of your funnel because within all of that, the answers to all of that, um, will be held by different people in the organization. And also the degree of risk that you're expecting that corporate to take will differ enormously depending on the answer to, to the kind of place you're at. And so what I found, I think, in my experience at least, is that there are a lot of small companies who are, uh, Not clear enough about what it is that they want, what will help them take the next step in their journey. And then the quid pro quo, the other side to that coin, is Are you clear enough about what value you think you're offering the corporate in return?

Chris Reichhelm: 15:18

Yeah.

Steve Cook: 15:19

Are you offering them, you know, in return for taking some risk as an early adopter of your product or investing? Are you prepared to offer that corporate some exclusivity? It's difficult, but some, Um, you know, some priority access to your, to your products should it be successful. Um, what's the value proposition that you're trying to frame here? So the clarity of what you're, what you give and what you get in return, and being able to frame that for a likely somebody on the other end of a conversation in corporate who has very little time to frame it for themselves is super, super helpful. And it sounds obvious, it sounds stupid. But the more you can make these things clear and obvious to people, the better sort of progress that you can make.

Chris Reichhelm: 16:13

I think it's, I think, again, I think that's a really insightful piece. You know, often companies go and they're, you know, they come to a group like BP and they engage in these kinds of commercial discussions. And it's almost like because of where they are in their stage of development, it's almost as if they're seeking, they're seeking validation, but they also need additional insight. And that demands that someone from BP is going to work with them to build out their proposition, to help them build out the rest of the solution.

Steve Cook: 16:48

Yes.

Chris Reichhelm: 16:48

Help them figure these things out. And, You know, these, as you, as you mentioned earlier, these people have 300 other things to worry about apart from, you know, you know, this company. So unless you're solving the mother and father of all problems for them, which you're probably not from the sound of it, then why should they help you? If you, you know, if you have this much still to figure out.

Steve Cook: 17:16

Yeah, exactly. And so we've, we've talked about understanding the corporate strategy. We've talked about a couple of different entry points. Um, and we talked about clarity of what we want to give and get

Speaker 3: 17:31

for

Steve Cook: 17:31

a relationship. I think the next thing is the, um, the willingness and, um, ability to ask some quite specific questions quite early on in the conversation, should you get into that conversation. Um, And the reason I say that those questions might be, but the reason I say it's important to do that is because the, the cycle time for an investment conversation could be four to six months, but going through the pilot demo and commercial contracting process could take between 12 to 18 months. And so, and so the kind of questions that I'm thinking about asking at quite an early stage in any conversation are things like, who is the decision maker? In this process, if for a pilot or for a commercial buying decision, who makes the decision, who has the budget to fund that, um, who else needs to be involved in order to sign that off? How long do you estimate it's going to take? Do you have an idea or can you tell me which of your assets you might choose to deploy this technology or solution in first? And through those kinds of questions, I think you can quite quickly get a sense of whether the person that you are talking to understands how decision, commercial decision making happens in that and how commercial contracts eventually get signed. And if they, If they don't understand that, then that's a red flag. And if they do understand that, and then do not bring some of those people into the conversation along the way, that's another red flag, because what you don't want to do is be thinking that you're talking to BP or GE or whoever large corporate you want to choose to talk about, one of these large corporates, and think that they are a homogenous entity where you're having one conversation with the entire entity, and of course you're not. You're having a conversation typically with an individual, and that individual may or may not be properly connected into the organization you need to reach. So you need to find that out, and otherwise you're at risk of having a super interesting conversation with somebody who is personally, professionally, very interested in your technology and your company, but will not be able to help you. And that's a lot of wasted time and effort, and potentially a lot of, um, Killing yourself that is going on in terms of whether you're making real commercial progress is.

Chris Reichhelm: 20:13

How often did you see that?

Steve Cook: 20:18

Too often and, you know, a number of times on both sides of the table where you know, it was clear that it depends on the organizational structure, right? But certainly in BP we had Um, marooned islands of, of super technical people who had a remit to talk externally and would get companies very excited without the ability to progress that into anything meaningful. That, that happened a lot. And I've certainly seen it on the other side of the table and startups that I've been working with, where they think they're making, they get super excited because they've been talking for three months to a corporate, the, it's a blue chip organization, it would look great as a customer. But when you press a bit It becomes obvious that they're talking to one person and it's not, it's not moved on. So, and it's, there's no, there's no contract or terms or talking about actually implementation in any meaningful way.

Chris Reichhelm: 21:20

So there's a piece around, you know, courage and bravery required here and complete honesty, you know, and, and the reality check about where things actually are, because Obviously, entrepreneurs have a tendency to always see the glass half full. They've got to be optimistic. It's the, it's a, I think it's a key characteristic. It's a key feature, but equally, equally there's, you know, this presses home the need for being completely honest and, and qualifying these things so that you're not wasting time and having the courage to go back to boards and investors to let them know, actually, we've been talking for three or four months, we're getting nowhere.

Steve Cook: 22:08

Yeah.

Chris Reichhelm: 22:08

You know, following our qualification, you know, we're just getting red flags. We keep meeting the same guy or gal, they keep on talking about how excited they are, but nothing's happening here. I think we gotta move on.

Steve Cook: 22:21

Yes. You, I think you have to know when to, when to call it quits. Yeah. When to say, and, and as you say, I think the, I mean, there are, there are many asymmetries in the relationship between a startup and a large corporate. But one of them is to do with, with what powers your company, and as you say, as a founder, as an entrepreneur, you're powered by optimism, by passion for what you're doing, by emotional energy as much as you are by, um, you know, hard facts and data. And you have to be like that. There is no other way you can be an entrepreneur except to have those characteristics like you're saying. But, but in many cases, large corporates are not moved by enthusiasm, by passion, by emotion. They just want to see the data and they want to know what kind of a risk they're taking. And they want to see hard evidence that it's not going to, you know, cause a factory process to fall over.

Chris Reichhelm: 23:16

Absolutely.

Steve Cook: 23:16

And you want the technical validation, and everybody in a large corporate is, whether they believe themselves to be or not, are largely working to manage risk. And if you're in a startup, you're not managing risk, you're managing uncertainty and you're generating, you know, passion and enthusiasm when you're selling a business because you don't really have that much probably to point at.

Chris Reichhelm: 23:42

How, in a rule of thumb, Steve. Um, how many, based on how many startups would approach BP in the typical year, how many of them might get funded?

Steve Cook: 23:56

How many of the startups that you would meet would get deals done? Like real deals done would, you know, would realize their intention of striking a commercial deal with a group like BP. It doesn't have to be an exact number, obviously, but I mean, roughly, I can give you a sense of magnitude. Right. So roughly, yeah, we would look in the, I'm sure it's the same as we, that size, we, we looked at maybe between 1, 000, 2, 000 startups a year as potential um, investments as, as partners, as providers of solutions, as people we could do pilots with. Um, and of that number, I would say the number that we took through into venture capital investments or, or other modes of partnership and business is probably, you know, between 20 and 40 a year so, you know, you can, you can see the size of the funnel and then the, uh, what trickles through at the other end is, you know, there's quite a, uh, a dropout rate as, as you'd expect. And I don't, I don't think it's any different than if you were doing the same process, you know, financial investment fund, it's a similar, similar odds.

Chris Reichhelm: 25:14

It is. It is. It is, but it's important to, I think, no, sorry, go on.

Steve Cook: 25:21

Sorry, Chris, I was just going to add to what I was just saying, which is, you know, if we're talking about an investment perspective for a second, um, a corporate VC not only has to meet the criteria that any financial fund would have to meet in terms of the attractiveness of the investment financial. They also typically have to find somebody in one of the businesses in the corporate who will champion and sponsor that investment and be willing to put their hand up and say, yes, I will help deploy this. I will help provide the data that this startup needs. And so there's an extra layer there of, um, of work to be done. And then on top of that, you've probably got a more complex decision making process around signing off on an investment or purchase in a large corporate than you do in a smaller organization ........financial....VC. You won't just have one investment committee, you will have other layers of governance on top of that. Um, so it's, you know, there are, there are more layers to work through.

Chris Reichhelm: 26:27

Steve, would the identification of that sponsor, would that always happen after the financial due diligence? Are there any situations where you would front load that identification?

Steve Cook: 26:41

Yeah, I mean, where, where I've typically seen it work is, is in parallel. And in fact, the financial due diligence comes a little way down the line once you are, once you know that you probably can attract a sponsor in the business and you know that it's strategically relevant. So it's almost like if anything is the other way around. Um, so, yeah, but it, it, that doesn't mean it necessarily takes, takes a short amount.

Chris Reichhelm: 27:14

Yeah. Yeah, yeah, yeah. What? I mean, you've met with a lot of startups, you've led an accelerator as well, so you've helped grow them too. What are the two or three areas you would single out for improvement? Uh, you know, what do entrepreneurs need to do a better job of generally speaking, based on, on what you've seen?

Steve Cook: 27:39

I've already mentioned one of them, which is do your homework about the strategy, about the company and about as much as you can find out about where the pain points are. Um, point number two is something about clarity of communication, being able to, in a, in a world, uh, where you're, you're having a conversation with somebody who's got a full plate of other things that they are, that they are working on, um, you need to be able to almost like a politician, land a couple, two or three key messages that would stick in the head of that person, such that they can then have a, a lucid understanding of And coaching conversation and, and in engaging and selling conversation, really, with other people in the organization, you're arming them with those selling messages. And so, you know, for a lot of technical founders, that's not necessarily something that comes as a straightforward, easy, obvious skill. And um, partly it's It requires some commerciality in those statements, as well as technical, um, explanation. And for a lot of engineers, technology people, and I count myself in that bucket as well originally, um, it's difficult for them to simplify because they want to say everything about their exciting idea. But it is a bit like the Winston Churchill quote of, um, 'I'd write you a shorter letter if I had more time,' it's, it's not necessarily just a, an issue of polishing up your presentation skills, although that's not a bad thing, it's about doing the work to figure out what's at the heart of your messaging. What do you really want to communicate and have understood about your idea of the solution by the other half of the conversation. So, um, that's not a trivial sort of, or superficial thing. I think it's quite a deep thing. Um, so that, so there's communication. Um, I also think that there is a degree of Expectation setting and coming into a conversation knowing that it might take a long time, knowing that it's not going to be one conversation and you're done, uh, and a deal is going to appear tomorrow. Um, that's almost never the case. It is, it is conversation. Um, I think, again, I'm just referencing some, some of the things you said earlier, very briefly, but being able to ask that, that kind of set of questions that I alluded to earlier, quite early in the conversation. Um, so you're not getting strung along and knowing when to quit. Yeah. That's, that's quite often missing. Um, sometimes it's, it's quite unclear as to how The idea, which may be super interesting, or the technical nugget that is at the heart of the company, translates into a deployable product in the corporate. So how is it going to integrate into your, to your systems, into your assets? Um, can I convince you that it's going to be as hassle free, as, you know, free of disruption as possible for operations? Uh, not necessarily involve, you know, The IT organization, a huge integration project, which is going to frighten everybody. So I have you thought through all of that, such that, um, you know, you're arming the person again, it's about arming the person that you're talking to, to go out and have other sessions inside the corporate. So almost it's like, you know, somebody from the innovation organization calls up somebody in operation, say it's Hey, I've just been talking to the startup. They have a great idea and almost certainly the first response from the operations team is going to be, well, 'that won't work, because it, you know, we can't, we can't, we don't have any way of stopping the process or we don't, we're not able to integrate that into our systems. We've tried that before. It doesn't work. We've got targets to meet. We don't, can't afford the downtime, so no,' is usually the first answer. And you've got to be able to arm that person to at least have the, Initial thing, rebuttals and say, well, actually, no, it's not, it's at the end. They're going to make it really simple for you for X, Y, and Z reasons. They understand that you've got difficult job and here's how we're going to make it easy for you. But if they can't even have that conversation, then it's hard to see how it progresses. So you've got to be constantly arming people and selling messages with these, um, deployment messages, uh, and all the rest of it.

Chris Reichhelm: 32:10

Yes. Yes. Yes. Yes. Yes. What's, uh, I mean, these things, you know, speaking to you now, listening to, to your observations, you, you know, one would think one could be forgiven for thinking that these are fairly straightforward and obvious areas part of solution selling or strategic selling, um, uh, you know, almost common sense in terms of two businesses coming together to understand if there's a landing zone where an engagement can potentially play out. But from the sound of it, you know, we're not getting to that stage very often where people are, are, are as prepared or as skilled to be able to handle even that.

Steve Cook: 32:53

No, that's, I think that's fair. And I think it's, like I said, right at the top of this conversation, um, complex B2B sales into large corporates is a specialist area. It's, it's hard, it's difficult, and it requires a, Um, a host of skills and some luck, uh, in order to, to make it work. And it takes time. And quite often startups are under a lot of pressure, time pressure, because their cash is running out because their boards are, and investors are banging the table for sales and evidence of product market fit. It's hard. And there's a reason why it's, um, it, it, it doesn't happen that, that frequently in this relationship don't easily translate into success.

Chris Reichhelm: 33:42

Yeah, no, that's right.

Steve Cook: 33:43

It's a, it's a, it's a scary one. It's a, it's a hard thing to master. Um, which is probably actually interesting, actually, sorry Chris something just occurred to me. Um, the ability to hire into your startup, this is obviously pure specialist subject, but the ability to hire into your startup, somebody who has some capability and understanding of the world of complex B2B selling is something to consider even at today's, but you probably have a better feel for that than I do.

Chris Reichhelm: 34:18

Well, I think, you know, I think it's interesting. There's the deep tech world and the lab to market worlds often get their guidance from software world. And in terms of, well, what does it take? What are the rules we should apply when building a business or the frameworks or the guidelines? Well, let's, you know, let's copy those over from digital and from software. And uh, and so one of the common themes that we come across as a lot is the founders, CEOs should go out and be the first salesperson. Because they can articulate their value proposition better in theory, in principle, they can go, you know, they should be going out and having a lot of these early discussions. The issue, especially in deep tech, as I'm sure you have found too, is that so many of these founder CEOs are straight out of uni, uh, or maybe they've had a little bit of experience, but it's not, it's, they're by no means senior. And so in a lot of cases, they just haven't had that experience yet. They may, you know, they're typically visionary and brilliant in a particular space, but their professional career is still, is still immature.

Steve Cook: 35:32

I mean, I think, I mean, you've hit on the subject there, potentially a whole other podcast or series of podcasts, which is, let's not treat some of these, um, you know, if we're talking about deep tech, Or at least partially hardware oriented businesses, clean tech businesses, let's not treat them by the same set of rules that B2B SaaS companies have used to be successful. It's not the same set of, it's not the same set of rules, it's not the same business. See it time and time again. So we need to invent a different playbook for this and, um, it's coming, but it's not, all the books that have been written have not been about this. So,

Chris Reichhelm: 36:14

no, and we need precedent. We need to see throughout, you know, we need to see these types of companies build, scale, and thrive commercially so that we can learn from them and we need to have the cycle just like we did in software. You know, we've had that. We, you know, we understood we have precedent in software. We don't have it in a lot of these other much more complex areas. We'll get there. We'll get there, but it's going to take some time. So we can't have the same rules. What was, you know, let's go to Launchpad, you know, for a second cause this picks up on obviously all of this and you, you were running Launchpad for a while within BP. Tell us a little bit about the thinking there, because obviously you were helping to shape these young companies and invest in them and give them kind of life. What was the thinking behind the shaping of them and the development of these businesses?

Steve Cook: 37:04

Launchpad was an attempt to create a construct that was owned by BP, funded by BP, and could consistently scale companies from product market fit to the kind of Um, under 200 million dollar revenue type of organization that would then be, uh, substantial enough to withstand some of those processes that I talked about. And so, you know, we, we did a lot of work, um, in the run up to setting up Launchpad with a peer group of other European big chip companies from all sorts of different sectors, healthcare, transport, uh, telecoms, stock exchanges, but people who were essentially tackling the same problems. How do you transform yourself from within and grow businesses inside your corporate. Um, and we also, we work quite a lot with Mckinsey, who has done some really good thought leadership and experiential hands on stuff. around sort of scaling corporate promotion. So between all of that and some of our own thinking, obviously, we came up with the idea of Launchpad. And I think, you know, we set it up as a subsidiary of BP, so it was somewhat arm's length, still connected to the mothership. But what that allowed us to do was to sort of different, uh, different culture, different sort of processes, ways of working. We We could choose to opt out of certain ways of working that were appropriate for a large organization, like I say, but totally poisonous if you're trying to scale something really quickly. Yes. And so we tried to strike a balance between the things that BP had that were both necessary, relevant, it's code of conduct, it's legal procedures, it's safety processes, And, and the operational assets and experience and expertise inside the company, the supply chain, all the good stuff. We try to have our cake and eat it, have all of that cake and be able to, um, at the same time, create more agile processes in a more entrepreneurial environment within which, um, companies could, could feel like they were able to make progress rapidly and not being tumbled by the, you know, It's the typical entanglements of a large corporate. So that's what we were trying to do. Um, I think, I think some elements of the construct were really successful, others, we just learned an enormous amount along the way. We made a lot of mistakes. Um, we had some good successes in terms of some of the companies. Now, I mean, I should say that some of the companies that we were attempting to scale were spin outs from inside the company. Some were, um, previously part of venture capital portfolios and minority investments, that we then took majority position in, and some were acquisitions from the market at various stages. So we, we all three of us brought companies into Launchpad. Um, and we built a portfolio of seven, seven companies. Um, A lot of them.

Chris Reichhelm: 40:24

Seventy?

Steve Cook: 40:25

Seven. Seven

Chris Reichhelm: 40:27

Seven companies. Yep. Yep.

Steve Cook: 40:29

Uh, seven. Because, you know, because it was, it was beyond the VC stage. And so we were quite, we were investing a lot more in those companies than we'd seen much investment. And, um, you know, we, you know, we felt like, because they already had a lot of cases that It was less risk involved. So, yeah, the portfolio was never intended to be huge, um, but we took that portfolio from, from not very much to over a hundred million dollars of revenue over the time that I was there. Um, I think it was, it was really important. We talked about sponsorship in other contexts in real life as well, but it's a really important thing. earlier in the discussion, but we had some very, uh, strong sponsorship when we started Launchpad from BP's Deputy CEO at the time. And that helped us enormously in terms of knocking down barriers and so on. And then I think, I think, I think a lot of things conspired inside, inside BP to make life harder. Um, once we reopened as we, we then went through a transition into a new leadership team, new CEO, no deputy CEO anymore, the champions that we had disappeared. And so the sense of ownership that that single team felt around Launchpad for doing it wasn't there. That's a, that's a big problem, you know, so we didn't, we didn't make Launchpad resilient to that sort of loss of sponsorship, you know what I mean? Um, I think we, I think we, uh, like I said, we learned a lot about, um, how to, how to test support. The biggest, the biggest set of lessons I learned were about people, about, uh, making, making good hiring decisions, um, being really thorough about how you, um, you know, how you set culture, how you keep culture alive. And it's very difficult to create a culture from scratch in an organization and then, and then keep it quite distinct and separate from the corporate culture, which is always trying to come in and sort of. take over. And that's, that's enormously hard to do, to sort of set up an island with a slightly different culture. Um,

Speaker 3: 42:54

yeah,

Steve Cook: 42:55

but yeah, it all comes down, it all comes down to people and, you know, um, making rapid, effective, Decisions about people carrying them out, whether that's promotions or, or deciding that somebody's not right in the role. Um, this is, this is all your territory, Chris, so you know about this, but yeah, it is, it is where things fall over, over and over again.

Chris Reichhelm: 43:19

It is, it is. I mean, it's so it's, um, and look and Steve, thank you so much for sharing that. That's a. Hugely insightful, you know, what, it was bold what you guys were trying to do. It was really bold for a corporate to say, Hey, let's go see if we can scale up some of these businesses super fast, get them to operate in accordance with our practices so that we can, so that we can create those proper growth stage companies. But we can accelerate the growth. And I think

Steve Cook: 43:52

And we showed that we could. I mean, there were, we had, uh, we had a couple of super successful companies, so

Chris Reichhelm: 44:00

But there's not a lot of precedent with that, with that kind of accelerator. Most of the time we hear of accelerators, we're talking about very tiny businesses or groups of people who come together to form businesses within the accelerator. And then we'll give you a bit, you know, Y Combinator, Entrepreneur First, uh, Deep Science Ventures, you know, these guys. Yeah. So, you know, to do it at this level is, is I think quite bold and you've got a real shot. So, you know, in, um, especially doing it at the time when you were doing it too, we had COVID as well. Uh, yeah. we built a lot of Launchpad in lockdown. And yeah. In COVID times. So, but yeah, it's, you know, the people, you know, the people challenges are, you know, So, you know, businesses are groups of people, um, at the end of the day, they're groups of people. And so if you're, if you struggle managing people or leading people or thinking about people or dealing with people, you're going to struggle in business.

Steve Cook: 44:59

Yeah.

Chris Reichhelm: 44:59

But, uh, and it's, God, it's the hardest thing in the world. Uh, but it's,

Steve Cook: 45:04

it's, it's the rapidity of making decisions and moving people in or out of roles that I think was, yeah, was critical and we just didn't do those things quickly enough. I, you know,

Chris Reichhelm: 45:16

I, I've spoken to so many, uh, other executives and non executives, uh, who And that seems to be a recurring lesson. We should have moved faster.

Steve Cook: 45:29

Yeah. I don't,

Chris Reichhelm: 45:30

I don't think I've ever met. I don't think I've ever met anyone. I don't think I've ever met anyone who said, you know what? I think we, you know, I think we got rid of him too quickly. I think we should have held on. I don't, I've never encountered that.

Steve Cook: 45:43

No, it doesn't happen, but it never feels like the right thing to do in the moment. And that's,

Chris Reichhelm: 45:49

yeah,

Steve Cook: 45:50

that's why you need a, uh, in many cases, a great, a great people person right alongside you to speak the truth to you as you're, as you're wrestling with those decisions, but also. You know, you need a good board or you need a good group of people that can, um, that can provide those discussions at the right time. Yeah, yeah,

Chris Reichhelm: 46:10

yeah, yeah. Steve, uh, I could keep on talking to you and listening to you all day. Um, look, thank you so much for, for taking this afternoon and, uh, and spending this time with me. Um, it's been, it's, it's been a great chat and I've learned a lot. So thank you.

Steve Cook: 46:29

Thank you, Chris. It's been a pleasure.

Chris Reichhelm: 46:33

You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders. This podcast has been produced by Beauxhaus. You can find out more about us on LinkedIn, Spotify, apple, or wherever you get your podcasts.