Despite corporations' best efforts, the systems and structures used to grow their businesses often prevent them from transforming their companies from within. That's where a corporate venture studio can help.

High Alpha Innovation CEO Elliott Parker recently hosted an Innov8rs Learning Labs webcast to share the five transformative innovation failure modes we most often see in large enterprises today with corporate strategy leaders and how these scaled organizations can overcome them to unlock new levels of growth.

Specifically, Elliott noted how building a venture studio that launches startups at scale can help corporations avoid engaging in the illusion of innovation and generate invaluable insights that can improve the core business.

Top Takeaways

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• Without the right funding mechanism, governance and incentive framework, entrepreneurial talent, portfolio management strategy, and external partner, venture studios will fall flat, according to Elliott. Address all five areas, though, and you set your organization on a path to refine and repeat your venture-building formula to bring multiple venture-backable businesses to market.

• The most successful corporate venture studios tie in their startup-creation theme with their main business objectives, Elliott explained. This enables these enterprises to ensure companies they build address a customer, business, strategy, or market problem they've long wanted to solve and will provide learnings they can use to improve the core business or explore adjacent innovation opportunities.

• In addition to generating insights that can strengthen core operations near term, startups created via a corporate venture studio can also provide (potentially outsized) long-term ROI and optionality for enterprises. Not every startup will become a unicorn, but those that disrupt one or more industries or markets can provide financial returns that can future-proof the core business.

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Check out the entire Learning Labs webcast below to hear the advice and ideas Elliott had to share with the corporate leadership audience — insights that can help your enterprise get a venture studio off the ground.

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Transcript

Good to be here with you all today. I've been looking forward to this. I titled the presentation today “Why Venture Studios Fail.” It is a sad truth that most venture studios do fail. We're going to talk about why and how to avoid it.

The reason why this is relevant is so many corporations now are experimenting with the venture studio model and venture building.

If you look around the world right now, there are over 800 venture studios. By my count, maybe only 20 or 30 of those are working to produce a good return consistently.

So we are students of the asset class and study what's working, what isn't, and I'm going to share some of the things that we've learned from that study, as well as from our practice, the last 10 years running venture studios.

But a quick story before I begin, and I'll share my slides here in a second.

Back this summer, we had the Summer Olympics in Paris. Amazing. I love the Olympics. It's incredible to see what people can do. and a few months before the Olympics here in Indianapolis, in the U.S., where I live, we had the Olympic trials for swimming.

Now, I'm a very mediocre master swimmer, but we had an event at our office with USA Swimming, the organization that puts on the Olympic trials the night before the trials.

I met the whole leadership team, a bunch of former Olympians, and the president of USA Swimming found out I was a swimmer and said, ‘You should come swim with us at the trials pool tomorrow morning at 6:30, where everybody's going to be practicing before the Olympic Trials.’

So, I showed up the next morning, 6:30 in the morning, with all these former Olympians who are jumping in the pool next to me now. I was swimming next to them. I was doing the exact same things. They were looking at them, but they were going so much faster than I was and I could not. I could not figure out what the difference was.

But what I realized in the moment: ‘Wow, that is what world-class looks like. I can be so much better. I can do so much better. I just need to figure it out.’ I found it very inspiring.

What I hope to do today is share some of the things we've learned about what world-class venture building looks like so that it inspires you too. You can see that success is not only possible, but probable, if you can do some of the same things that successful venture builders are doing.

So my approach to venture building is based in large part on the work I did not only in launching companies over the last 25 years. My experience is based not only on launching lots of ventures as an entrepreneur, as a corporate innovator, or corporate venture builder, but I spent many years working with Clayton Christensen at his venture or his consulting firm.

Usually, most of you have to explain who Clayton Christensen was for this group. I think many of you know about Clay who came up with the idea of ‘disruptive innovation.’

We had lots of long conversations about how so many large organizations are focused on solving this problem of innovation. Most of what they're doing doesn't work. The evidence of that is almost 30 years now since Clay wrote the “Innovators Dilemma,” most large organizations have set up innovation teams. They've been running in some cases for decades now.

Yet when you ask people for examples of successful real transformation of a corporation by the work done by an innovation team, the examples are very few and far between. That is a sign, a signal to me that most of what we're doing isn't working.

If it did work, we'd all have readily available examples to share about transformation in corporations.

Now, there are lots of good examples of innovation on the margins, and that is important. Sustaining core innovation, really, really important. Most of the innovation we benefit from is sustaining the core, but that's not what most innovation teams are set up to do.

Most innovation teams are not succeeding in driving transformation. So we decided to take a different approach with our venture-building model. I'll explain what I mean by that in just a minute, covering three things today.

Number one: What is a venture studio? Let's get grounded on a definition.

We'll talk about failure modes, what makes them work or not and then how you can win. In your venture-building efforts, I want you to be successful because we need large organizations to be successful in innovating.

The point is that the failure of innovation teams is not because innovation leaders are not smart enough or capable enough. It's a problem of systems and structures of governance and of incentives.

Large organizations are not designed to pursue transformative innovation. As they scale, they become more careful, try to make things more predictable and more focused on capital efficiency.

Transformative innovation, as you know, is diametrically opposed to capital efficiency, safety, and predictability. Requires taking risks, making mistakes, figuring things out.

When we think about venture building broadly, I'll talk about venture studio specifically in a minute, but when we think about venture building broadly, there's really two classes of venture building.

There's internal venture building, and there's external venture building.

Internal venture building is a fantastic tool for core, maybe adjacent innovation. The reason is that the organization knows what to do with the problems related to that type of core innovation and can execute very, very well. Ninety-nine times out of 100, a scaled corporation is going to beat a startup at these types of problems.

Now, transformative innovation is different. In those cases, a startup is going to beat a corporation 99 times out of 100 because the governance and incentives that an organization used to execute at scale don't work for pursuing transformative innovation.

Most of the time, the rare exceptions are where you've got a founder who's still leading a business or a business that's facing an existential threat. They're going to go out of business in the next year or two if they don't successfully transform.

But even there, most of that innovation isn't coming out of innovation teams. It's being pursued differently. That's important to note.

All right. So we think about internal versus external. This is the biggest challenge and biggest failure mode when companies pursue venture building is we conflate everything.

Everything should be done as internal venture building or most things should. There's this other tool external venture building that can be quite successful for certain types of innovation, a minority of the opportunities.

But successful when it works. I won't go through all of this because of time. I will just summarize it to say that the big question you should be asking is what's the fastest way to create the most value for the organization? There are times when surprisingly the answer is external venture building.

I'll explain again how to make sure external venture building can work and what we mean by that. But, in the meantime, internal venture building is great where there are more known than unknowns, where you're dealing with what we call learning challenges. You know a problem, you know what you need to do to solve the problem, you just need to go execute.

Those are the types of situations a corporation is designed to go after and execute well.

External venture building is best suited for what we call learning challenges. So execution challenges, learning challenges, learning challenges are where we know the problem, but we're not quite sure what the solution is yet.

It's a little bit ambiguous. so we've got to go try things and figure it out. In those situations, startups are actually really well designed to pursue learning types of challenges.

Here's a quick test. To determine whether the problem you're working on right now in your innovation team is an execution problem or a learning problem.

If you can build a spreadsheet predicting the next 12 months of activity with some degree of confidence in terms of how the market's going to react to your solution and what's going to happen. if you can be fairly confident in the results of that spreadsheet, you're dealing with an execution problem.

The corporation knows what to do. You just need to go do it.

If, on the other hand, your spreadsheet your, your confidence level is very low, you're not sure how things are going to play out, you may be dealing with a learning problem, and pursuing that externally often is going to be more successful, and you're going to see startups go out and do this and solve that problem probably much better than the corporation can.

One more bit of kind of just grounding here before we get into venture studios. When you're dealing with transformative innovation, in particular, it's what we call a power law asset class, and this is the same asset class that we apply in our universe of venture capital.

Power law assets mean very few things produce most of the impact.

Contrast this with a normal distribution, which looks like a normal bell curve, a little bit more predictable. Investing in public stocks is a normal distribution activity. You can pick almost 30 stocks at random, and you're going to get a market average return. Investing in ventures is a power law investment activity where you need to invest in a lot of things.

You need to make a hundred investments to have a handful that will pay for the whole portfolio. When you're dealing with transformative innovation, think of it as a power law asset class. You need to gather as many insights as you can because you don't know ahead of time which insights are going to prove to be the most impactful for the organization.

Insights are a power law asset class. You need to gather lots of them. You gather lots of them by running lots of experiments, fast, cheap, and weird. It's what we say at High Alpha Innovation. Launching new ventures externally is a fantastic way to learn and gather insights. So that you can reap the benefits of this power law asset class.

Most of our corporations, what we do when we think about transformative and innovation is we are centralizing it. A good friend who runs innovation for a large company told me once that we're very good at failing slowly and at scale, which means that they're centralizing their transformative innovation efforts, whether it succeeds or fails.

It's very expensive and there's not a lot of it. As a result, the output is not very robust and doesn't lead to resilience in the organization.

All right. Venture studio. We hear this term thrown around a lot. It's funny because back in 2014 when High Alpha where I, I'll tell the story of High Alpha and High Alpha Innovation in a second, High Alpha was formed.

It began as an incubator, a team of people coming up with ideas plus a venture fund. My colleague and friend Christian said, ‘Well, what should we call this? But let's call it a venture studio. You've got the venture fund plus a design studio. We'll call it a venture studio.’

So it is funny to no end to us now to hear that term used around the world to describe this activity of, of incubating, building ventures from scratch.

We define a venture studio as a system for designing, launching, capitalizing, and scaling a portfolio of fast growing startups. All four of those activities are important: coming up with the ideas, designing them, launching them, putting capital into the businesses, and then helping them scale.

That's how we define a venture studio.

This is a great quote from Bill Gross, who came up with, invented one of the first venture studios, didn't call it that, but one of the first versions of this model called Idealab built in Southern California. Wildly successful. Launched over 170 companies to date. About a third of those have IPO'd or been acquired for, for good returns. Great track record.

If you take a group of people with the right equity incentives and organize them in a startup, you can unlock human potential on the way away. Never before possible. This is true. Startups are designed to move very quickly to pursue transformative opportunities to go figure out to go learn to try things, make mistakes.

Startups are not capital-efficient in the way that a corporation is managed to be. As a result, startups are able to do things faster where there's more ambiguity than a corporation can. Most startups fail. One of the biggest mistakes a corporation can make when pursuing innovation is to think we need to act more like a startup.

No, you don't. Most startups fail. You don't want your corporation to fail. Corporations are very good at executing. startups are not. Startups are good at learning.

So when you think about the kind of tools you have at your disposal for innovation, this is a chart we use just to explain the difference between a venture studio and other models.

It's not an incubator. It's not an accelerator. It's not a venture fund. All of these tools are worthwhile. It's a, it's an and not or proposition. you don't need to pursue a venture studio at the expense of all of the other things. In fact, for most organizations, a venture studio is not the first thing you do.

It should be a compliment to other things that you're doing. But a venture studio is all in on capital investment into the ventures created as well as support. contrast that with an accelerator, that accelerator that provides support to startups or new ventures, but may not be going all in on capital as an example.

Here's the key to success for a venture studio in particular for running a corporate venture studio. A venture studio succeeds by building as many startups as possible.

Think about the power law we talked about. You have to launch as many startups as possible at the lowest possible operating cost for startup launched and meaning operating cost of the studio.

You need to put out as many new ventures as you can at the lowest operating cost. Again, that's the key. Contrast that with what normally happens in a corporation where, ‘Boy, we're lucky if we can put out one to two new ventures a year and at great costs in our ventures, our venture builder.’ In the studios we run, we'll launch 20 companies in the next year. I don't think that's enough.

We are aiming to get to a point where we're launching a hundred companies a year. That's how you ensure mathematical probability of success. Tell the story of High Alpha. High Alpha began as a venture studio in Indianapolis in the U.S. back in 2014. Some friends of mine started and sold a company at Salesforce in 2014 for two and a half billion dollars and wanted to start more companies together.

High Alpha began, like I said, as a team of people coming up with ideas, launching companies, plus a venture fund. That's how we, we, we began using the term venture studio to date. High Alpha has launched over 40 companies deployed about a half a billion dollars invested in over a hundred startups in total.

We've learned a lot in the last 10 years about how to execute this model. In 2020, we spun out High Alpha Innovation as an independent business to pursue this model. This playbook makes it accessible to corporations. We're having more and more corporations reaching out to us saying, ‘How do you launch so many companies? Can we learn from you?’

We decided there was an even better opportunity. We could partner with corporations to launch these new ventures together where the corporation can help provide advantage to these startups and ensure the startups go faster and farther than they would on their own.

We're seeing great success with that model. Like I said, in the next year, we estimate we'll launch another 20 companies with corporations as co-investors and partners with us in that effort. So today, we built 24 companies in the last four years. We've launched and are currently running five venture studios.

We will launch a few more venture studios in 2025. Again, each of those with a partner or a coalition of partners focused on a specific theme. Our model, essentially just to summarize it, what we do with corporations is we say we can help you launch 10 companies in the next two years. Help you get points on the board, help you drive transformation in meaningful ways.

These are venture-backable external startups. A total cost to do that is $13 million. About $3 million goes to the operation of that studio team, then $10 million goes into investment on the balance sheet of the startups that we launch and then help scale. This is a great alternative for companies often to other CVC approaches, corporate venture capital approaches. A good complement to other innovation efforts.

All right, so let's talk about failure modes, and then we'll get a little bit cheerier at the end and talk about how to ensure success. The biggest impediment to innovation success in companies is the funding mechanism. This is not often perceived as a, as the primary downfall of innovation in organizations, but it is.

The reason is that most innovation is funded as an operating activity, or it's funded after the idea comes to us. Sit down. We think about a bunch of things that we need to do that are innovative. Then we ask at the end, how are we going to fund this activity?

The answer, most often, is, ‘We're going to fund this as an operating activity. We're going to impose a tax on the operating business. We're going to have a business unit pay for it. We're going to go run this thing and see what happens.’

Transformative innovation will fail nearly 100% of the time, when it's funded as an operating activity. The reason is that the organization is optimized for capital efficiency, for driving a return on investment over a defined timeline.

Transformative innovation has an uncertain ROI. So you've all seen this marketing has a clear ROI in an organization. Over time, if you are having to go up and compete with budget for marketing activity against your innovation efforts where the ROI is unknown, marketing will always win in the end.

It's inevitable because the organization is optimized to do that. Transformative innovation has to be funded from the balance sheet. And if that sounds confusing I urge you to, too, to get wise on the difference between operating capital and balance-sheet capital, CapEx and OpEx.

Balance sheet is what the organization uses to do acquisitions or to build a new factory. Timelines are long, the payoff is long, and there's a lot more patience.

Transformative innovation has to be funded as a business. A capital expenditure from the balance sheet. If it's not, if you're having the discussion around what's your ROI, are we competing with other activities in the operating expense operating budget, you're going to lose.

You have to start with the funding mechanism. If you're not using CapEx, not using balance-sheet dollars, you need to go back and make sure you are. Otherwise, your chance of executing transformative innovation is very, very low. This is born from decades of evidence. Unfortunately, I wish this were not true, but it is.

Governance, number two failure mode. One of the biggest problems we see with corporations that are seeking to build new transformative ventures is we have a high assumption.

We assume what's going to work because of what we know has worked in the corporation already. The assumption is that the corporation can control this new thing and still benefit from the learning that that new thing is going to attain.

So corporations seek to build a new venture, even externally, but want to own 100% or close to 100% of that new venture. Well, what happens in those, those when, when corporations do that is the new venture looks a lot like the corporation. In fact, I would ask why, why are we even launching it outside at all?

If you're going to own and control most of it, nobody else will ever invest in it. So you don't get other partners to come in. You can learn from it's very hard to recruit founders who see the upside, who could go build things on their own. That's going to achieve much better outcomes for them.

Personally, we tell corporations all the time. You can't be both rich and King pick one. King meaning you control it, rich meaning you don't control it, but you benefit in terms of the financial returns and the lessons that the little venture provides to the corporation. You're more likely to learn, produce strategic optionality, and produce a financial return, ironically, if you don't control it.

Number three, talent. I know when I was running a corporate venture builder and corporate venture capital team, we had a hard time recruiting talent, truly world class entrepreneurial talent to run our new ventures. It's because we don't get the incentives right. World-class entrepreneurs make all the difference.

You hear all the time, 'I'd much rather have a mediocre idea with a great team than the reverse.' Often, what we're doing in corporations, we have fantastic ideas, but we're only able to recruit mediocre teams to go pursue those because of the incentive challenges.

Think about this for a second, in a corporation, we cap the incentives at both the top and the bottom for people who are running new ventures for us, meaning we tell them if you succeed at this new venture, we'll give you a nice bonus at the end of the year, but you're not going to make more money than the CEO.

On the other hand, if this new venture fails that you're building, that's okay. You come back, we'll have another job for you. It's all right. Both of those extremities are well intentioned, but produce negative results.

Think about how a startup is different where the outcome can be very, very binary for an entrepreneur and certain people are very motivated, motivated by that.

If it works, they may never have to work again. If the venture fails, they may not be able to pay their rent in six months. That disparity of outcomes is extraordinarily motivating and entrepreneurs who are motivated by that go do amazing things in very little time.

Portfolio management. I talked about this earlier. If you're going to go venture build and have a venture studio at the corporation, you need to make sure you're pursuing a portfolio strategy.

There's some great professors at Stanford University a few years ago who did a study. They said, what's the best strategy if you're going to do an angel investing, investing in startups, did all this research on what works and what doesn't for angel investors found the best strategy you can have if you want to do angel investing, which this is a form of at a corporate level, right?

The very best strategy you can have if you want to do angel investing is to take everything you own. Put it into the next Google. Now, that is a fine strategy. If you could identify the next Google about the reality is most of us can't. and they recognize this.

They said the second-best strategy is to go make a lot of small bets. 'Go make a lot of small bets, and see what happens.'

If you're going to do angel investing, don't pursue angel investing unless you're going to be able to invest in at least 25 companies, you won't get a return. In fact, your probability of return is close to zero. Otherwise, when you're building a portfolio of ventures, you've got to do the portfolio approach, building one or two things, and then waiting to see how those play out.

Seeing that happen all the time is a strategy for failure. More shots on goal increases the odds of success. Again, power law assets are what we're dealing with. Think about launching a hundred things rather than three or four.

So what do you need to do to change your process and approach, your governance, your incentives, your strategy, your talent to enable you to launch 100 things in the next four years or five years rather than three or four, because you're not going to succeed at transformation unless you can do the former.

Now, that all sounds scary. The good news is this is doable and we've got lots of examples in our portfolio and corporations we've worked with that are succeeding at this.

How to win. Number one. If you're going to pursue venture building for your organization, if you're in particular going to set up a venture studio, you need to make sure that the strategic link is obvious and clear to everyone in the organization.

You have to connect the business strategy to the design of the venture studio. People need to understand why building new ventures, in particular if you're building new ventures outside the corporation in which you have a minority stake. Why is that going to lead to our success? Why does our success as a corporation depend on that approach?

Next, optimize the cap table for the ventures you're building. Again, this goes back to the control question I was talking about a second ago. What we have learned through the last 10 years, having launched in total over 70 companies now, you have to get the cap table right in the cap tables, the ownership split, who owns the new venture that's being built.

About 50% of any new venture, nobody will ever invest in it because the corporation has too much control. If corporations own more than 50% of world class entrepreneurs who are capable of doing amazing things on their own, we'll never go into a venture where that kind of trade off.

So you have to think about why we are doing this. What is the objective?

If you're pursuing an opportunity where the future success of the corporation depends entirely on the success of this new venture, then yes, you probably want to control it. You probably want to build that internally. So I'm talking about a very small subset of opportunities that are transformative.

Again, ambiguous. We don't know what's going to happen. Learning challenges. We want to get other partners. We want to use other people's money. We want to get world-class entrepreneurs involved so that we can learn as an organization as quickly and inexpensively as possible. Because remember, we want to do a hundred of these things, not one or two or three or four.

You do that by optimizing the cap table. What we found to be the sweet spot is in the establishment of a startup. To have the venture studio own about 40% of that new venture is 60% is owned by the people who are running at full time now within that 40% if a corporation owns 40% that's going to be problematic to most venture capitalists and even to many founders.

In our model, when we do this and we partner with corporations, usually the corporation is owning 20% of the new ventures. We're owning 20% as co-founders. Then the team that's working on it full time is at 60%. We found that to be a sweet spot that still attracts tier one world class venture capitalists to come in and co-invest alongside the corporation in these ventures. When they do, the results are so much better for the corporation.

So, again, rich versus king. What do you want to optimize for? If you want to optimize for other investors coming in for world class talent for moving very quickly, you need the cap table to look something like this.

Number three, you want to make sure the ventures you're building are endowed with advantage, real meaningful advantage.

Building a company out of a venture studio, whether it's a corporate venture studio or an independent venture studio by nature, by default, the ventures coming out of a studio are actually disadvantaged because of the weight of the cap table, the complexity involved. so you have to act, you have to actively find ways to endow these with advantage so they can move faster.

That might look like a corporation being a first customer that might look like a corporation being a distribution partner. In one case, I can think of in our portfolio, the CEO of a corporation we worked with. Called four other companies in his space and got the CEOs to all invest alongside his company in this new venture we built, ensuring its success.

Lots of ways advantage can come, but it needs to be clear. Putting your brand on a venture usually is not a strong enough form of advantage on its own. Okay. I talked about this a little bit. 'OPM' stands for other people's money. It is the best kind of capital. If you're going to launch a hundred things, you want to rely on other people's money.

Think about this for a second. As a corporation, you're going to launch a new venture. Your goal is that this venture become a $100 billion company over time. You need to realize how much capital is going to be required to build a $100 billion company. that may require $50 billion. That may require $100 billion of investment over the next few years.

Your corporation cannot do that on its own. Where's that money going to come from? You need other partners involved. So you need to cultivate relationships and structure deals to attract tier one venture capitalists, other corporations, other investors to be involved with you in the process.

A of corporations that have done this, earned a great return, got the lessons from the startups and seen these startups go much, much faster because of other investors' involvement.

Last one, make sure you can attract world-class entrepreneurs.

Our typical entrepreneurs in our portfolio are 45 years old. They've already launched and exited a couple of companies and they view working with us and with the corporations we partner with as a way to move faster than they could on their own.

You need world-class entrepreneurs. It makes all the difference. Again, a mediocre idea with a great team is going to lead to good outcomes for the corporation. A lot of learning very quickly.

It's very hard to predict ahead of time which new ventures are going to be successful. Again, think about the power law. But your chance increases dramatically if you can attract world-class entrepreneurs to run them.

The way you do that is by having a good network, number one, number two, having the right incentives to be able to, to to make sure that they see the potential outcome that would benefit them.

Last piece of advice: Remember why you're venture building as a corporation at all.

Often, I'll work with corporations and they'll tell me, ‘We've got a $5 billion revenue gap we have to close that's on us. So our responsibility is to build new ventures that close that $5 billion revenue gap.’

I was talking with an executive yesterday whose revenue gap is $2.5 billion that he's expected to fill by building new ventures.

Building new ventures is the worst possible tool for augmenting corporate revenue. Here’s why. Look at Google as an example of just dramatic success in the startup world.

I can't remember the exact numbers, but it took years for them to get to a point where they were generating billions in revenue. The idea that your innovation team and building ventures with people part time you're going to build the next Google, it's just not feasible.

Augmentation is a terrible objective for venture building. There are much, much easier ways to augment revenue, a more traditional core innovation, entering new geographies, et cetera. The primary objective for venture building should be learning for the organization. Go take a space, look at a space where you feel both opportunity and disruptive threat coming.

You just need to get smarter about space as a corporation. You are more likely to uncover anomalies and discover new ways of understanding how the world works.

By building external startups that can move very quickly, led by world class entrepreneurs. Learning is the primary objective. Those lessons can then be incorporated back into the scaled corporation's business to produce dramatic results very quickly.

To augment revenue, we've got some examples of this, of corporations fundamentally transforming their core business model because of the startups that we've built together and what they've learned.

Number two is strategic optionality. We don't know how the future is going to play out.

All we know is the future is going to be much weirder than we can imagine and it's coming much faster than we can anticipate. You need to be ready. I heard the other day of someone comparing the difference between planning and preparation.

Corporations are very good at planning. Planning assumes everything's going to go right. Preparation assumes everything's going to go wrong. Preparation means you are prepared for any eventuality.

You can prepare and have strategic optionality by building a portfolio of ventures that unlock new strategic pathways in the future.

Number three, financial returns, of course. In the end, all of this activity has to produce financial returns for the corporation. At a minimum, you want to produce returns so that this activity pays for itself so that you can fund the learning and the optionality for the corporation.

Most of the time, though, venture building is not going to produce the types of financial returns that matter to the balance sheet bottom line of the corporation.

We worked with a corporation, the first company we launched as an example. This corporation had $35 billion of windfall profits last year, profits they did not expect ahead of time. We could build a new venture that would be one of the most successful startups ever and sell it for, you know, $10 billion a few years after launch.

It wouldn't matter to the corporation. What's much more important is the learning and optionality, but this activity at a minimum should pay for itself.