Innovation Units Need Separation

Shaan Puri shares his perspective on managing innovation within companies, particularly focusing on how to handle new ventures alongside established business units. He emphasizes the importance of organizational separation and proper resource allocation for growth.

• New Ventures Need Separation from Core Business

  • Can't have "the baby and teenager in the same room"
  • Different needs require different types of care
  • Weaker projects may look feeble compared to established ones
  • Must protect growth potential of new ventures

• Resource Allocation Challenges

  • Natural tendency to invest time in profitable, proven businesses
  • Example: Choosing between $1M profitable business vs unproven project
  • Easy to neglect speculative projects when comparing metrics
  • Solution: Split companies/projects into separate units

• Timing of Innovation Projects

  • Don't attempt too early in company lifecycle
  • Reference to Amazon's AWS: Started 10 years into business
  • Required 250+ people and significant resources
  • Need stable core business before expanding

• Early Stage Focus

  • Startups are like babies - need basic care first
  • Focus on fundamental survival needs
  • Don't complicate with advanced initiatives too soon
  • Core business must be stable before diversifying

• Later Stage Opportunities

  • More flexibility once core business is stable
  • Can take calculated risks on new ventures
  • Better positioned to allocate resources
  • Less worry about survival allows for innovation