How to Drive Innovation in Corporations Using the Entrepreneurial Spirit with Elliott Parker

from the crossroads of America in the hoer state of Indiana this is get in the podcast focused on the unfolding stories and extraordinary Innovations happening right now in the Heartland I'm Nate spangle head of community at Patrick Egg and I will be your host for today's conversation on the show today I am joined by Elliot Parker the last 20 30 years for the first time since we've been tracking this the majority of people feel like the future is going to be worse than the present for a sustain period that's never happened before if you go back to the the 1700s the the enlightenment people thought like things are going to be amazing from here on out that was wrong that was too polyana in the mid 1800s you had all these things happening at the end of slavery and Industrial Revolution coming people out of the world is just getting turning into an amazing Place very optimistic 20th century that started to slow down a little bit you had things like Atomic weapons and world wars that got people to feel a little bit less optimistic about the future perhaps but in the last 20 30 years when you pull people and ask do you think the Futures can to be better in the present majority of people surprisingly for the first time ever say I don't think it's going to be better when you're an entrepreneur the way that you succeed is by being non-consensus and turning out to be correct right if you think about it if you are consensus going along with the crowd and right you're not going to win if you're running a big business and you're going along with the crowd and right you're going to go out of business that's the innovator's Dilemma you have to be non-consensus you have to come up with ideas that the rest of the market people don't understand yet and then you have to turn out to be right a really easy way to be non-consensus right now is to be optimist because you're going to turn out to be right on average over time through history the optimists have been right Elliot Parker is a CEO of high alpha Innovation a venture Studio that works with large scale corporations and universities to co-create startups Elliot is also the author of the illusion of innovation a book to help big corpse Escape efficiency and Achieve progress more on that later on the show today we're going to dive into the illusion of innovation that most corporations fall into how to build a culture of innovation Within organization and we're going to take a dive into ways that some of the most Innovative entrepreneurs and organizations think and operate Elliot welcome to get in great to be here dude I am so pumped for this combo backstory to the listeners my cousin Hunter is is a recent new employee at high ala Innovation and he has been raving about what y'all are doing he's crushing it he is that that's just hiso like he is just that guy hunter is so shout out to him I think he helped orchestrate and make this whole thing happens had to start with a little shout out there so Elliot as I did my research I orig I found out you're not originally from Indiana I'm not right so let's talk about where you grow up I knew that your dad and your grandpa were both entrepreneurs as well so take us back to where you grew up in that first exposure to entrepreneurship besides selling candy in fourth grade as we talked about right I've traced my family history back to a long time ago and as far back as I can go entrepreneurs so it's in the blood it's in the DNA really okay so what are some of those early ones like lots of farmers lots of farmers yeah my so I'm originally from California and my my family way back in the mid 1800s left Missouri went to California Central Valley started farming but way back before that farming all the way all right back to so that makes sense why you end up in Indiana yeah yeah yeah okay so but your dad and your grandpa they weren't Farmers right no so my grandpa had a music store tried a whole bunch of things my dad when I was young he came home from work one day quit his job what what was he doing Investment Banking and just didn't like the environment there and came home one day and set up in a spare bedroom a desk with a couple of phones shut the door and for 2 years I locked himself in there and got a business going this was back well before internet anything like that so two phones on the desk making phone calls I as a young kid I like what is he doing in there what's happening but I got to see him build a business from the ground up hire employees and do amazing things the employees did not work out of the spare bedroom oh no he eventually moved out what was the business and how first off how old were you at that time so boy I was probably six seven years old watching this happen and you're at the time your grandpa also owned the music store yeah so do you remember being six seven years old seeing your dad build this and then also hanging out at Grandpa's music store yeah of course yeah what what are some of the lessons you learned from being just immersed in entrepreneurship at that early age the big lesson was I didn't know there was another way you got to figure out a path in the world and go make it happen was the lesson from the very beginning what business was your dad building an investment Bank as well Bank yeah the spare bedroom Investment Bank that's something what was the trajectory of dad's business from two years in the spare bedroom to when you're like eight years old and he like moves out in an office and things are ripping and Entrepreneurship is fun and you make a ton of money and then you exit and stra yeah if if only right yeah it's the ups and downs the whole way right Mark andreson famously said that entrepreneurship is Terror and Euphoria at the same time all the time every day that's what it is and so I saw that firstand too but my dad did eventually exit his business sold it and bought it back again sold it again did really turned out really really good for him so when did you know so you said you didn't know there was another way but what was the moment when you're like this is for me like I want to be an entrepreneur yeah so I coming out of college I knew that I needed to go learn something and I was got married with a year college left so we were when I graduated college I was married and our first baby was on the way I had to go get a job and so I did but but I I learned a lot that first job I was working at a company called Arthur Anderson which was big accounting firm Global firm and I was working in this Consulting business there we had a small team that was commercializing IP out of big companies so we'd scour their 30,000 patents try and figure out what existed in there we could spin out go spin it out GPT to do that right yeah only was a lot easier was amazing super great experience but that company rapidly and famously went out of business in about 6 weeks Arthur Anderson was was the accounting firm that Enron used and did some stuff at least a a small team of people did some things associate with the Enron debacle and the firm went out of business in about 6 weeks they got in firm got indicted by the US government and this 35,000 person or whatever it was Global firm collapsed and I remember coming out of that thinking man that was I thought I was taking a safe job and I remember driving in the car with my dad and he said a lot of people think big companies are safe but the reality is in a big company you don't control your fate not really but not really because anything can happen and you can lose your job whereas in a small company you canol your fate yeah some people perceive that as risky but at least you it's up to you you have yourself to blame if it doesn't work and that that was appealing so I went to business school and immediately started a couple companies there got into it this whole debacle happens you stay till the very end it's hey the office is just we're done tomorrow and it's great like I'll take my last paycheck and then go to business school so what happened was a lot of the teams got bought by other firms and our team was eventually purchased by KPMG where I went for about six weeks before business school started okay and where'd you go to business school UCLA okay and what's the a lot of these Business Schools all have focuses right it's like this thing that thing what was UCLA's what is UCLA's Focus the big Geographic appeal there you go as from from the LA area I thought I'd be there my whole life I thought well go go to business school here and this is where we'll be my wife are from nearby as well but their their primary focus was entrepreneurship which was also appealing to me okay that's nice having that the entrepreneurship I'm always intrigued right entrepreneurs usually sit on one side of the fence or the other right it's yes go go to school and study entrepreneurship or the opposite side is just go be an entrepreneur tell me how you fallen oh the latter definitely business school is interesting I Lov my experience there but the lessons I learned were all outside of the classroom biggest lesson I learned to business schools that none of the buildings were named after Consultants they're they're all named after entrepreneurs who had done well and donated back to the school the other big thing that I learned was that being in business school for a couple years just gave me the opportunity the excuse to be able to reach out to anybody I realized pretty quickly you've got a kind of a magical superpower when you're in school and that is that you can pick up the phone send an email reach out to anyone and there's a good chance they're going to respond the day you graduate you lose that and so I took advantage of that and had the opportunity to meet some amazing entrepreneur and that's not just Silo I think that's a really good point to any undergrad listener or NBA if you have this the badge of student it's a cheat code to get into rooms with people yes I didn't realize that until I was an ORF fellow right I would just graduated and in Indianapolis the ORF fellow badge like helps you get in the door with other orell and it's Dang if I would have known this when I was in underg I would have just reached out to everyone hey I'm a student I don't really know what I want to do I'm interested in entrepreneurship would you give me 20 minutes it's like especially in Indiana from my experience like people are willing to give you that time yeah yeah you got to take advantage it's one one quick story of that an example I was in school heard that Richard Branson was going to be in town I thought that's a guy I'd love to meet and he was coming in town to speak and I thought how going I to to go meet Richard Branson how could I do that and somehow found out that you could get a press pass to this thing and I was writing a column for our school newspaper every you know couple weeks and used them to say I'm like I'm a columnist for our school paper and they gave me a press pass and I got to go spend night minutes interviewing Richard Branson and learning about him and getting encouraged that boy he was an amazing guy obviously but he's took chances and did it made it happen I can do that I love that that is that's an a good like I think the modern hack to the press pass is having the podcast this has been like we started it it's been amazing and it's like we've grown get some amazing guests like yourself and go back and look at the episode list but I know college kids and young entrepreneurs young Hustlers that like no one ever if you ask them to be on your podcast they never say how many listeners do you have yeah no everybody wants to be famous for a day and be in a podcast and then one day you get a bunch of listeners and it's really fun but early on it's reach out to a CEO if you have a podcast do it on maybe not on Zoom get like a Riverside or something and just be like hey I have this podcast I'd love to interview you for 30 minutes about XYZ you're going to get I i' say nine times out of 10 that's your modern day press pass right 100% I know there there was a few comments so as I was reading and looking through and doing some research like there might be an issue with the the business school and modern management and I know that there's like a topic that you've talked on and spoken on and had some content around so talk to me about what you think the issue is with going to business school and as a 27 yearold that has no plans to go to to business school like what would you say to the opposite of me that once you go to business school yeah know what you want to get out of it before you go right for most people I think the actual classroom education for some people that may be useful if you're shifting from a some career without any business involvement something doing just yeah taking those County and finance classes and so on might might actually be helpful but there are cheaper faster ways to learn that stuff too so the thing for business school is that you for again for me it was just getting the confidence and seeing the patterns seeing what good look like having exposure to world class that I otherwise wouldn't have had for me as an aspiring entrepreneur that was helpful but the caveat to that is as well I a lot of people at business school I was going to in class with when you asked them what do you want to do 5 10 years from now they say they wanted to be an entrepreneur and then they were going and interviewing for big company jobs and most of them aren't entrepreneurs right now and the tradeoff is it's if you know what you want to do just go do it sometimes there are more efficient ways to go do it and you might get sidetracked I think that's like a poll that should be put out there to people with their NBA it's like when I I talk and I asked that question to a decent amount people that have gone to business school and it's always about the people the connections the community like being around excellence like you can't put a price on that that's why you pick organizations like or fellowships like be around that's why a lot of people pick companies to go be around excellent but I don't think I've ever heard anyone say my accounting 356 was like a gamechanging life changer CL I wonder what there I wonder if there was one out there I'm sure there is where there's people that went to Wharton and are just like no there's just one class at Wharton that's like in game changer for being an entrepreneur I haven't found it yet but if you have any ideas or you come across what the class is I'd love to for sure I have some great professors great classes learn some great case studies but like I said there are are cheaper faster ways to do that if your goal is to just learn a subject you graduate from business school and why everyone's going out to be Consultants maybe they're starting a business maybe they're going to get their next thing you're in Southern California hanging out in the sunshine having a good time there how do you end up making a huge life transition there yeah so moved to Indiana so we when I was in business school fell in with a bunch of other aspiring entrepreneurs in fact our F first year we locked ourselves in a room and said we're not going to leave until we identify a business to go launch and I had a list at the time of probably 150 ideas we went through the list came up with an idea launched a company built a chain of retail kiosks and movie theater lobbies super fun super fun retail kiosks and movie theater lobbies yeah so the idea was you go see the movie you're super pumped about the movie coming out you buy the t-shirt on the way out just like you would at a sports event rock concert right mer why doesn't that exist and for many movies the merchandise sales are greater than the movie tickets sales so why not put the two together was our thought and it worked it was we didn't know what we were doing and learned all sorts of lessons but the business in movie theaters was break even and with us knowing nothing I think we could have optimized that done better ultimately I sold out to one of my friends who had start with who took it and turned it into a pretty nice business doing if anybody listening has ever bought superhero or comic book related stuff online there's a good chance they've bought it through my friend's business no way so I turned out and then so second year I started another company too but in between in that summer by the end of my first year I got a phone call out of the blue from a guy in Indiana named Mike Fitzgerald who has become a great friend I didn't know him at the time he called me and said hey I got to copy your resume you don't know me I was golfing with this guy last weekend you don't know him either but he had your resume he's an Alum of UCLA and I'm hiring for this job I think he'd be great for it and what if you came out to Indiana the summer and did an internship like what you who is this what you talking about where's Indiana yeah 20 minutes later though Mike is persuasive one of his superpowers he's very persuasive and 20 minutes later I was like that could be a lot of fun called up my wife and said what if we went to Indiana this summer gave it a shot nothing like packing up the wife and the kid right go for your summer internship in Indiana yeah yeah so we I remember driving out to Indiana we had at the time we had two kids actually my wife and I in the car and we'd always imagined our whole lives with be Southern California and remember looking at each other and saying what if we like it what do we do if we like like it what do we like Indiana Oh okay so you end up here what are you doing that sumwhere with Mike Mike was running a small growing corporate Innovation corporate Venture Capital team at Ro diagnostics at the time so I joined him that summer and actually was working with some entrepreneurs out in Massachusetts who had technology they had invented and Ro was using that in its business and considering other ways to use that to expand the use of it in their business and uh I ended up after the summer was over working with those guys taking a a license on the technology for an alternative use and building a business around that that ultimately unfortunately failed on graduation day in our caps and gowns uh my my business partner and I walking out to graduation ceremony with the lab results on this technology and realizing it wasn't going to work no until graduation day caps and gowns and you're like you get your results and you're just like now we got to go take a job go get jobs what was the opportunity after that business fails and so Mike was great said hey if your business doesn't work out you've got an open chance to come back here we'll take you so I called him up said hey that's still good they said yep come on out so we moved to Indiana and came out here for about seven years this is back in ' 04 back at Ro yeah back at Ro spent a few years there and then learned a lot about corporate Innovation trying to build things inside of big companies and in fact I would argue we ran an early version of what became high off at Ro we were building startups inside of Ro and if we couldn't or investing in outside startups and learned a lot in that process oh my gosh yeah I think this is interesting right just the whole ethos of you're a lifelong entrepreneur from like birth right you grew up immersed in this and when I think of Entrepreneurship I do think more of you got to go out and start something from zero to get someone to pay you a 100 bucks a th000 bucks a million dollars but there is this what you're doing now is Entre rship right high off Innovation like you guys are entrepreneurs but within places like Ro right it's like within this ecosystem of big corporation which like for me as like the entrepreneur like startup like small company side it's that's tough to wrap your brain around so I just like to like double click into that of like entrepreneurship within big companies and how that's you can build this environment and I want to get into the launch of high Innovation and where you guys are but talk to The Listener like that when they think and hear the word entrepreneurship they're thinking small startup Scrappy in the back closet of something wherever yeah and that is the right way to think of it that is the best way to do it but boy these large corporations have amazing reach and scale I remember in one of the my my my first week at Ro young kid from California for one lesson I learned was I remember being in the corporate office and the guy next to me saying hey pretty soon in a few months all these ponds will be frozen over I was like what what are you talking about it's cool enough that the ponds freeze I had no idea which is so funny to me now but also looking out the corporate office at the parking lot and the thousands of cars and each of those cars representing a household a family an individual who were making their lives happen through their work at Ro and what that enabled them to do and realizing that all that had been started by one guy 203 years previously and I thought that is amazing I want to be that guy I want to do that let's have that kind of impact what a thing to Aspire to be and do so a lot of lessons learned but yeah we were but these companies have amazing reach and so if you can build things with alongside or even inside these large companies you've just got the potential for scale that is really hard when you're starting something in your back closet yeah I think a lot of especially early entrepreneurs like dream of getting that big partnership or building that getting that deal from the massive whoever when it's like the cheat code to that is like build along side with them and we're going to dive into that in just a second yeah Flash Forward from your time at Ro you go out to Boston for a while yeah right you end up back in Indianapolis and I want to just talk about you're at high alpha The Venture Studio here that is a business that builds businesses right in the studio but then this idea of the corporate Innovation arm of high alpha Innovation is an idea how does this where did the idea come from and how did you guys get it going I did leave Indiana so left Ro after a couple years and then or three years something like that and went and started a whole bunch of companies restaurants private Equity Fund in China software companies you name it a whole bunch of entrepreneurial Endeavors super fun and I at the time was an admirer of a guy named Clayton Christensen who was a professor at Harvard Business School who had come up with this idea of the innovator's Dilemma disruptive innovation theory that was his idea and I thought if I ever had a chance to work with him I'd drop everything and go do that and the chance came up so in 2012 moved with the family to Boston and went and worked at clay christensen's consulting firm for for about 7 years and had amazing experience traveling around the world working with Fortune 500 companies I think of that time period I I advised worked with maybe three dozen Fortune 500 companies trying to help them be more Innovative how do you overcome this problem of the innovator dilemma and the innovator dilemma says that Executives can do everything right serving their best customers and doing it ever more profitably their businesses will ultimately fail because as they move Market to serve those customers they leave themselves exposed at the lower end to new entrance who come in with good enough products grab a foothold and then move up Market themselves and displace those incumbents it's a really hard problem to solve okay wait let's put this in like context for The Listener yeah tell me show me tell me about the in innovators dilemma that we've all seen yeah examples of it are everywhere once you you see the pattern it is it's I go to like black best to Netflix sure Blockbuster is a great example Blockbuster is boy they should have moved to do something online the reality is they did actually they launched an internal version of a Netflix they tried to do it uh new CEO came in and said no we're going to stick to our our guns and and keep doing what we we do best and ride the retail stores and it went out but that's a great example Netflix in the beginning it was a good enough alternative it wasn't immediate you had to wait for stuff to come in the mail it wasn't perfect but boy it it on other performance Dimensions it really met the needs of customers much broader variety they didn't run out of movies it was easier to find stuff recommendations are you familiar with Jeff sman yeah here founder of mems he talked about this when he was on the show and he talked about there was a time when he made the decision they were like trying to innovate on radio but they didn't think that streaming was the answer he was like there just too much bandwidth or whatever and it's not that's not going to stick and he made the decision to lean into radio and not go into streaming and not going to television and like it's been a wild ride for him and literally his book is never ride a roller coaster upside down and it's he talked about on the show about this he was at the top of that with the innovators dilemma and he had built this insanely awesome radio broadcast network and then Falls from their like superiority as radio gets pushed to the Wayside and streaming comes up a subtle plug to go back and check out that episode if you want to hear about the real life innovator's dilemma okay we all see this in in context you're working at this consultancy in Boston yeah and working with dozens of Fortune 500 companies to help with this problem what do you ultimately find out yeah that it's a really hard problem to solve and that most of what we were recommending even though it was all well-intentioned didn't work meaning these companies were coming to us and wanting to transform their business models fundamental transformation they would see that disruption was coming new competitors coming online and they recognized they would need to change the business model we recommend ways to do it most of it didn't stick we a lot of things we could point to were on the margins we were creating Innovation being helpful lots of sustaining Innovation but that fundamental transformation remained really elusive it's so hard to do and so I remember having conversations about this with Klay Christensen and just thinking through the problem like how do we really address this at the same time as an entrepreneur well aware of what startups can do and watching startups get foothold in the market and move and learn really quickly get to scale and Achieve exponential outcomes and I thought there there's got to be a way to combine the best of both of these you've got these scaled organizations that are amazingly efficient in in terms of their Capital efficiency they can do amazing things they can do it at scale they understand their markets and customers incredibly well and we need these corporations to be effective by the way they can do things that startups cannot but they have a hard time learning they're not set up to learn as these companies scale they build systems that are designed to run things profitably and predictably and safely they're not designed to learn startups are so if you could somehow harness that learning ability of startups and combine it with corporations maybe the startups would be better off too through their association with the corporations would be able to learn everybody wins what would that look like that's interesting that you say you don't want these big Corps to fail I think a lot of time the entrepreneur mind say it's screw them right I don't care if I don't care if the Fortune 500 company fails make room for the emerging technology that is innovating yeah why as a you know why as anyone do we need these Fortune 500 companies to thrive and not to fail it's that's absolutely true the level of a single entrepreneur but at the level of society we need these these companies to succeed I mean the corporation is an amazing invention if you think about it it's only been around for a couple hundred years this idea of a limited liability Corporation all it is in the end is a piece of paper where people agree to do certain things and then magically people do those things and we uphold our promises and you can scale that to hundreds of thousands of employees across the world that's crazy that's amazing when you stop and think about what that is and it's through those means that we as people collaborate to solve really big problems corporations can do things that would be really hard to do any any any other way and so there's a great scene in the movie Ford versus for best movie ever on Innovation by the way one of my favorites where you've got this contrast between Carol Shelby and his business they build race cars they're like the startup they can do amazing things there's a scene in the movie where they show up at the racetrack and they're collaborating with Ford and Ford has a car on the track that's got this big heavy computer in the passenger seat so they can track the data as the car goes around the track and the the team from Shelby tosses the computer out on the racetrack and tapes yarn on the outside of the car inexpensive cheap fast and then runs the car around the track and watches how the wind plays on the yarn as it flows classic but there's also a scene in the movie where Carol Shelby goes to visit Henry Ford III and they're in the office of the Ford Motor Corporation looking out on on the factories and Henry Ford turns to Carol Shelby and says during World War II we converted all these factories to build airplanes for the war effort and thousands of airplanes came out of these factories was the idea just you couldn't do this only a big corporation like this can do something like that we need these corporations to be really effective of solving problems the the problem is they've gotten worse at it over the last 50 years and that is a huge issue we need them to be better at it we need them to be able to reclaim able to pursue progress again so we've identified this problem right the problem is that they're not as good at at innovating as they should be or need to be for Progress to continue to go yeah and the solution that kind of you guys have have adopted at high alpha Innovation is to co-create these companies yeah so not build a in a silo go and build your own startup but like really work with them to build an independent but yet co-created or right right so talk to me about what you guys are doing at high alpha Innovation and bringing this to life so high off is an amazing organization right founded by four friends of mine back in 2015 to go build startups and doing a great job of it I joined them in 2018 because around 2017 I had this idea maybe I got to go raise a fund and go build startups with corporations and ran into uh a couple of my friends who had started Mike and um Christian Anderson who were among the the founders at high alpha and they said we're doing a version of this already come join us so just as fun to was starting at high Al I joined them in 2018 and we started having corporations reach out to us saying we'd love to learn from your process how do you build a startup a month what does that look like and start of a month that's crazy yeah and so we started we thought we can do one better then show you what if we built things together we started experimenting with this idea what if we were to partner with these corporations to build Starbucks from scratch take the problems that they understand access to customers build startups that help these big Coes access Innovation that would otherwise be hard for them to do on their own what would that look like how would we do it so we started running experiments with that and realized there was a big enough opportunity out there that in 2020 we spun out to two people out of the company three of us formed high alpha Innovation it was a spin out from high high alpha in early 2020 and began taking that Playbook we were we had developed to high Alpa and making that accessible to corporations so fast forward four years now we're over 50 employees and launching will launch somewhere between 12 and 15 companies this year launched 20 to date all with corporations universities so now we partner with corporations universities to help them build their own Venture Studios that we run with them as well as startups that we launch together okay so talk to us about those early I want to see where we are this was 2018 you were testing with some big Corps yeah what did testing mean launching a company yeah what was the first one boy the first one that we launched High Offa launch was with cumins a company called Anvil I was going to say I'm pretty sure some of my friends were early employees I don't know if Cody Campbell he's like an early employee at Anvil and is still crushing it actually he's in business school now but rode that and it was something to do with safety or field yeah the safety for Fields technicians finding ways to make sure that they're not getting hurt on the job and Company's doing great yeah so that was our first forr and do learned a lot in that process and we then went and launched a company with Silicon Valley Bank uh oh and yeah called bolster which also doing amazingly well they do help venture back startups find fractional executive talent and board members and anyway yeah looked at a lot of other opportunities realized there was a chance to just go do this and so you guys have launched 20 to date yeah what are some of the so cumin obviously Silicon Valley Bank awesome are there other core partners that are like oh my gosh these are like the blue chip of the blue chip that you guys are working with yeah many amazing companies we work with here in town Al Leno and companies like Capital One and so on many universities I've also started reaching out which was a surprise to us initially but we love the work that we do with universities so we partner not only with corporations with universities and in some cases even government now to help build startups so we we work with closely with Purdue and Notre Dame here in Indiana UNC University of Wisconsin that's awesome that that's incredible and you're finding are a lot of these corpse coming the big Corps coming inbound to you guys of hey we have this issue where we want to work we want to build a more Innovative team culture we have problems that need to be soled yeah yeah there's a recognition that Innovation inside of these companies they know it's hard and I don't think there's a single executive in the country who's satisfied with the progress of innovation efforts inside their corporation so a lot of people are trying to find new ways to solve the problem innovation's getting harder inside of companies for a lot of reasons it's actually pretty interesting but it's getting a lot harder it's getting more expensive and so they're looking for alternative ways to do it that might be more successful launching a company is obviously hard entrepreneurs out there like launching a business that sells your widget or whatever it is it's not easy yeah I just have I'm trying to wrap my head around launching a company that launches companies I talk about just like the exponential Factor yeah of it's like the problems that like the the average like normal entrepreneur faces it's like multiply that by X however many more so T take me through four years now the like launch of high Alpa Innovation and a trip to Palo Alta when you guys got started there and and take us catch us up with what's been going on the last four years yeah very first day in business you're right we we were on a plane out to Palo Alto to meet with one of the first organizations we worked with was Xerox Park which was just like a pinch me moment if you're you know familiar with xox Park they've been around for a long time and invented things like graphical user interface and the computer mouse and just the fundamental technologies that we all use every day and take for granted came out of the zerox park and we went out there to work with them and see if we could help them commercialize some of their inventions it was very surreal to kick off that way our very first week just let's just take a minute to just like your dad starts a company in the spare bedroom day one it's like he goes to the spare bedroom with some phones and that's where he's building his company on day one of launching High ala Innovation you're in Xerox Park hanging out and like like in paloalto like that's just amazing isn't that wild entrepreneurship and this whole thing can happen in many different ways it doesn't always look like the spare bedroom sometimes it looks like silan Valley and sometimes it looks like some mixture in between there but I think that's important for people to know as they're like looking to hey I want to be an entrepreneur but I don't have the like I'm not I'm risk averse or whatever it might be yeah I don't have the the guts to go be in the spare bedroom doesn't always have really good point one of the things that that animates us a lot at high Al Innovation is this the idea that the world needs more entrepreneurs and not only do we need more entrepreneurs we need more of them to be successful it's way too hard and it's harder than it should be and we should collectively all be running a lot more experiments about ways to enable more entrepreneurship and more success we just had an episode with Max yod and he talked about the power of tinkering yeah and it's like in your adult wife it's like a lot of times like let's say You're A salesperson at whatever and you like you do the same thing and you know it works and it's like it hits that your close rate is 50% and your email response rate is 20% and you know that you're going to get whatever on the other end of it but it's do you ever still tinker and he talks about music being a way that has powered him to like Tinker within his professional life and like entrepreneurs and experimenting and it's okay to fail we can learn something and we can innovate from that yeah yeah one of my business Heroes is Walt Disney amazing guy I grew up Southern California about 15 minutes from Disneyland we could see the fireworks at Disneyland out the window every summer at 9900 p.

m. when they went off and Walt Disney famously like he he came out of World War II he he built this amazing animation St he invented the whole industry of fure length animated movies right these were wildly successful studi is crushing it World War II things slow down B he's doing some Mo some films for the government but coming out of that now way more competition it's hard to make movies of the quality that he wanted the cost that he wanted and he was just burnt out and his one of his assistants said you ought to take a trip just go take a vacation go relax and she said there's this train convention coming up in Chicago why you and your buddy ride the train out to Chicago go to the this train convention and just have fun and so he did he rode the train out went to Chicago and absolutely fell in love with model trains at this thing and came back to his home in La and started tinkering with model trains and probably more than tinkering that's all he did got some of the studio employees to help him build train sets he moved his family to a new house that had a bigger yard where he could build a model train set that he could ride on in the backyard absolutely obsessed with model trains and people at the time thought he had lost his mind the movie critic at the New York Times says such a shame this is Visionary Entertainer he's gotone off the deep end he's focused on model trains it's too bad he's not making movies for us all to enjoy but he was burned out and this was what he found interesting he was tinkering and what he started doing along with his train sets is building little Villages and scenes that to go along with the train sets he thought these are cool I bet other people would want to see them and he started putting those on tour and he called that tour disneylandia so you see where this is going right so somewhere along the way way he realized he could combine his storytelling experience from the studio with building rides and understanding environments from the little towns he was building and came up with the idea for an amusement park called Disneyland and went ahead and created a whole new industry there were amusement parks but he redefined what it meant to build an amusement park the most magical place in the world it is it is and so just like that idea that just go pursue what's interesting to you you're more likely to trip into big potential opportunities and New Growth curves than you would otherwise that's true of us as individuals it's true of Corporations and companies too you've got to find room to Tinker and to experiment and try things let's talk about there are listeners out there that whether they work at a Fortune 500 or they might work at a scaling tech company they want to be innovators but maybe that's the more traditional way of thinking where it's go do your job and maybe we'll do a little bit of innovation like what can the listener out there do to start to build this culture of innovation within their or not everybody can start with that inside of especially if you're in a large Company the company needs people who are focused and heads down and just operating the business there's sometimes you'll hear CEO say Innovation is everyone's job and I think that's absolutely wrong you want some people just execute not worrying about Innovation like just do the thing really well maybe do a little bit better maybe that's a form of innovation but do that thing well if you're an individual wanting to drive a more Innovative culture at your company you might need to shift roles to a role that Ena you to do that some more or you might need to find Outlets outside of work that enable you to Tinker and explore and go play with trains I like that I like that okay here's a question for like Executives right it's like how if you're an executive if the Dave Becker know who's who's the CEO of Lily Dave Ricks Dave Ricks if Dave Ricks is listening to this podcast maybe he is how can you tell or any other Fortune 500 CEO out there how can they tell they might need to get a pulse check and change up their Innovation strategy what are the signs you might be seeing within this big gorg you look at the results of the Innovation efforts and if you're not happy with them you you do need to try something different then over time the last many decades the primary tools for accessing Innovation have been internal product R&D or uh Acquisitions both of those still work really well um but both of those are getting more expensive than they used to be and harder to execute R&D is a lot less efficient than it once was because individuals and small teams outside of Corporations can do a lot more than they once did think about Bell Labs back in the 1950s amazing organization they brought all the world's top Engineers physicists into that company and were able to build a modern electronics Industry that won't happen anymore inside of Corporations just because the world has changed people have more access to communication and ideas and access to funding than they did at that time so it's gotten more expensive m&a also much more expensive to acquire businesses than it once was and the lifespan over which those companies endure post acquisition is also shorter and so the time you have to extract value in in every way m&a is more expensive than it used to be let's dive into that one a little bit because I think that is a way that a lot of big companies think about Innovations so we'll just acquire the startup but we'll just buy them out and there are benefits that's part of the entrepreneurship ecosystem I don't think we're here saying that like sales and transactions need to stop happening but what are some problems or just issues that you see with going the acquisition of innovation route yeah it is a great path but it's like I said it's just more expensive every large company should be very good at acquiring businesses when they need to the primary problem we see large companies the big mistake we see them making in Acquisitions is acquiring at the wrong time and the framework for thinking about this is the large corporation is very good at execution startups are great at learning and as long as the problem that the startup is solving is a learning problem that startup's going to continue to go out after that learning problem and attack it better than Corporation does but it's they do learn and the assumptions convert to knowledge they're dealing with less ambiguity more certainty that problem shifts to become an execution problem now you know what you need to do you just have to go do it that's when a corporation can come in and actually make a difference because a corporation is designed to execute the problem corporations run into is they acquire startups when they're still in learning problem phase and think that they can bring it in and scale it or apply the what the corporation does to that and it's often too early you just changed my a big way that I thought about entrepreneurship I thought that like entrepreneurs succeeded because they were masters of execution yes but it's they're masters of learning of learning you've got to test something the old the bullets first Cannonball test and then boom you figure it out masters of learning I think that is that's I know that's crazy this startups are are designed or optimized to be Capital inefficient what I mean by that is they have a limited amount of money right you have to run you have to be fast but you're not executing efficiently in a startup you're trying a bunch of things and trying to figure out what works along the way that's actually really Capital inefficient contrasted with a big company what we say in the world of starucks and Venture investing or if you're an entrepreneur building startups it is the magnitude of correctness that matters not the frequency meaning you can be wrong a lot because when you're right it's going to pay off really well the opposite is true in a corporation it's the frequency of correctness that matters not the magnitude meaning don't be wrong don't screw up keep things safe and predictable you need you need to be right often uh it almost doesn't matter how the magnitude of your correctness as long as your frequency is turned at pi and so that that's where boy when you try and take that system and and make it Innovative when the frequency of correctness matters it doesn't work because in innovating you want to be wrong a lot actually that's how you learn you have to uncover anomalies and surprises and figure out what's going to work entrepreneurs do that really well blending this idea of the big cor like this has been just a productive conversation around the idea of blending my my vision of Entrepreneurship with the big corporations because I've always been like I'm not a big Corp guy I'm that's not for me I like the startups the entrepreneurship one learning how why we need big Corps and like these big corporations like we don't want them to fail we actually want them to succeed caveat we want them to succeed as long as they're producing Surplus for society oh okay right so think about a few years ago Jeff Bezos famously said told his employees Amazon's going to go out of business one day and I remember reading the articles on this people were shocked how can the CEO of a company say that his company's going to go out of business I was like of course Amazon's going to go out of business one day but what he also told his employees was that it was their job to postpone the bankruptcy of Amazon for as long as possible by continuously experimenting in the service of customer needs so in other words as long as the corporation is serving customer needs in better ways a corporation deserves to exist right Society should want that Corporation to succeed you talk about Innovation they're in Amazon's insane at innovation like I was just shopping last night and I have overnight delivery I could have clicked the button at 10:30 or whatever and I was laying in bed and if I hit the $25 minimum they were going to drop it off on my doorstep between 4: and 8:00 a.

m. yeah that's absurd societal Surplus right so that's amazing yeah that's innovation in that vein then talk about Walt Disney you talked about Jeff Bezos are there any other Master these entrepreneurs that are welln that are like they were really good at innovating Innovation and who would that be oh man so many so many I think about and Edwin land the founder of Polaroid guy was amazing not as well known as he should be today an amazing entrepreneur one of the things Edwin land used to say all the time optimism is a moral duty and I love that I love that I agree with him I agree with him because optimism drives us to build and to do things and to have a desire to be a good ancestor for those who are yet to come oh my gosh optim say that again optimism it it leads us to want to first of all it leads us to think in longer timelines it leads us to want to build things that endure and that benefit those who are yet to come I I want to be a good ancestor for those who are going to come a long time from now um wow that's powerful yeah and by the way being optimistic is not people can misunderstand what that means it's not being polyana is thinking everything's going to be great from here on out that's not true being an optimist what that means is that we recognize that problems are going to come in fact every solution creates more problems and as the solutions get better the scale the problems increases but optimism is the belief that our ability to address those problems and solve those problems is going to increase over time and if that's how I Define optimism and with that definition I am certainly an optimist yes absolutely and it's that's just a way to be in my opinion it's like realizing no everything is not hunky dory and fine it's but I believe that it will be I believe that we can find the solution get better and it's don't I add that a lot with like just different teams that I work on and everything and it's great we'll take this beginning piece and we'll like gripe and complain and then get all the problems out once all the problems are out now we're in Solutions mode let's figure out there's a way to get through this and find the next way to go and we it's our job now to find that solution totally when things break in our companies or in our in high off Innovation boy that's an opportunity to learn something before the rest of the world has learned it and that's how you create defense right but think about the last 20 30 years for the first time since we've been tracking this the majority of people feel like the future is going to be worse than the present that's never happened before go back to for a sustained period that's never happened before if you go back to the the 1700s the the enlightenment people thought things are going to be amazing from here on out that was wrong that was too polyana is in the mid 1800s you had all these things happening the end of slavery and Industrial Revolution coming people out of the world is just getting turning into an amazing Place very optimistic 20th century that started to slow down a little bit you had things like um Atomic weapons and world wars that got people to feel a little bit less optimistic about the future perhaps but in the last 20 30 years when you pull people and ask them are you do you think the future is going to be better than the present majority of people surprisingly for the first time ever say I don't think it's going to be better and so when you're an entrepreneur the way that you succeed is by being non-consensus and turning out to be correct right if you think about it if you are consensus going along with the crowd and right you're not going to win win in fact if you're running a big business and you're going along with the crowd and right you're going to go out of business that's the innovator's Dilemma you have to be non-consensus you have to come up with ideas that the rest of the market people don't understand yet and then you have to turn out to be right a really easy way to be non-consensus right now is to be Optimist and because you're going to turn out to be right on average over time through history the optimists have been right yes I that is I'm going to clip that that's amazing yes it's like right now if the rest of the world is saying that the future is going to be blle be the person that's saying one just cuz that's a world that I want to live in and two you that's the fact that it's contrarian to be an optimist is wild to me it is wild that's wild but I love that and I think that's a great pin in that piece and that this part of the conversation it's been amazing I've Loved learning in about Innovation and just the way you're thinking about being contrarian that just I'm just overwhelmed by that last statement there that's awesome I just love that as an AS an optimist I'm like let's yeah you're going to win yeah but let's talk about the book yeah real quickly we just did a 50-minute conversation around Innovation and what big Corps are doing what startups are doing co-creating these startups like you guys are doing at high alpha Innovation Elliot also wrote a book The Illusion of innovation who's this book for the book is for individuals who see the need for organizations to reclaim progress progress and be good at invading again and who want language and analogies they can used to persuade others to also want change oh okay one quick tip from the book where it's if I read this thing I'm going to learn like something yeah run more experiments fast cheap and weird fast cheap and weird yeah I love do you have an I want to double click do you have an example of one of your big core Partners or anyone that's like running a weird fast experiment yeah I all of the startups that we launch to some one degree or another are weird and what I mean by that is challenge the status quo beliefs challenge the beliefs of the organization so an organization as it grows grows and expands these assumptions about the way the world Works get embedded because that's what got us to be successful you want to run experiments that challenge those beliefs you want to find the anomalies that are going to lead you into New Growth paths I love this I actually just had a conversation with one of your CEOs at hey M at M it's an awes exle yeah it's talking about being weird it's like content creation for Farmers yeah and from I'm obviously all over Indiana and one of my best friends is a a true on Farmer I was talking to him about this you're creating content around farming and that's like a weird fun experiment of just like how do I get the rural Indiana farmer to create content to make another stream of income I think about the so make yes they enable right now it's an a that might expand beyond that over time to help all big companies do social media advertising better than they do but think about the assumptions embedded if you're running a large restaurant chain you'll see a running mcdonals the way you think about advertising marketing is we have to hire agencies and they have Studios and we want to put out a 30 second Spot somewhere it's got to be 30 seconds by the way and it's going to cost millions of dollars and we're going to buy time all that none of that is true in the world anymore that's not viewed as authentic by younger customers today and it doesn't work Instagram you're hearing this right totally set up your phone and just start talking about stuff right so here comes M K with we're going to challenge those assumptions and our belief is that we can do connect with customers better through authentic Raw selfmade made stuff that in the past 20 years ago people like we can't air something like that won't work so true like the it's crazy the lower produced videos do so much better yes so so for the farmers listening out there if you want to make some content about your farm come talk to us shoot us an email I'll get you introduced to the whole crew over there they're doing some awesome stuff but maybe we can round up five or 10 Indiana Farmers to come help pilot make he oh yeah that would be sweet this has been an amazing conversation we're down to the final 2 minutes for a lightning round our the rule is it's just first thing that comes to your mind okay right so quick rapid fire this is fun no wrong answers unless it's the wrong answer all right so when you were driving into Indiana you're coming from California you're driving you crossed the welcomed Indiana sign what was the first thing y'all thought BL blot of fields field blot of fields to make hay Rock soer yes okay awesome outside of the amazing entrepreneurial e ecosystem what is Indiana known for racing yes are you a 500 fan yes are you going to be at the race no but we're going to go to we'll go to Carb Day this year there we go arguably not as much fun but a pretty good time yeah okay I love that this is my favorite one what is a Hidden Gem in Indiana there are so many I don't know if it's hidden but my favorite place to go in Indiana is greater ice cream the start in Ohio but when we were living here in Indiana originally I I was so in love with greater ice cream the closest one was in Kentucky and when we'd go down there I'd go with a cooler we'd buy dry ice and stock up and bring it back and I was sending emails to the company please open greaters in Indiana so now we've got a few of them here in Indiana yeah the one on Illinois in mid I don't even know Butler Red by Butler I that's a spot greater I actually did not know they were that big yeah so greater it started in Ohio Ohio yeah Cincinnati 100 100 years ago so you can thank we can thank Elliot for do great full credit yeah there me absolutely and then I moved yeah when we moved back there was greaters so that made it's like they plane touch us down and he's I know I have this important business meeting but I got to go to greaters yeah I here's another one Hidden Gem it's not hidden but man I so I work downtown live in Caramel drive up back and forth big chunk of my commute is on Michigan and there's a stretch there where you can find some of the best tacos anywhere right just a whole pick any place along that between like mid-50s and mid 80s I was going to say there is also the international market over there and there's just a whole Global culture that's happening in that stretch on Michigan Road someone just recommended to me the paperia on 71st in Michigan I saw that yeah I I go check that out yeah that's on my list of places to go all right I have two more questions for you one who is someone that we need to keep on our radar someone who is doing big things besides your cousin Hunter haes yes besides we can we can give Hunter a shout out he is doing big things unfortunately though I think he's he's wheels up he's headed up to the lake and then I think he's going to Chicago for for a time being there he's leaving Indiana which we don't love but I know he'll be back yeah we've got a lot of young entrepreneurial Talent here in the state just very I'm very bullish on Indiana let's go I love that finally what's an organization doesn't have to be a company doesn't have to be a startup could be if you want it to be what's an organization that in Indiana that's making a huge impact oh got a shout out to my friend Mitch Frasier at arovas just a huge vision for the future of what a and what Indiana is well positioned to do with a Food and Health in the state and how those things eventually converge and What Becomes of how Indiana can lead that he's doing amazing things Mitch is a previous guest of the show big Jeep guy which I also read driver Jeep so he and I bonded over that thank you so much Elliot this has been an amazing conversation all about Innovation a ways to build that into the culture and the DNA of your companies whichs to co-create where the big Corp and the small startup can live and cohabitate In Peace So I appreciate the combo I appreciate the Insight it was amazing for those listening at home we're going to link the his book The Illusion of innovation in the show notes check it out and just thank you one more time for all the change and impact you're bringing not just to Indiana but across the globe right yeah going to Japan next week launching our first company there let's go we we're going to need an episode two need an episode two it cool fun date appreciate it thanks this has been get in a powder kick production in partnership with Elevate Ventures and we want to hear from you if you have suggestions for a guest or segment reach out to Matt or Nate on LinkedIn or on email to discover top tier tech companies outside of Silicon Valley in hubs like Indiana check out our newsletter at powder.

com newsletter and to apply for membership to the powderkeg executive Community Check out powder. com premium we'll catch you next time and next week as we continue to help the world get in since you just listen to this podcast you might be thinking about starting one for your company lucky for you our partners over at casted have you covered casted is the first and only podcast in video marketing platform made specifically for B2B Brands I love this about them the platform makes it possible to publish Syndicate amplify and measure the value of your podcast and video content in fact we use it for our podcast here at powderkeg and if you're a startup you should listen up because cassid for startups is definitely for you they are offering exclusive deep discounts of up to 82% off retail price for qualifying startups connect with casted at cd. us powderkeg