How Entrepreneurs in Residences are Transforming Corporations

Over the past decade, entrepreneurship has become a hot commodity. Politicians and the media laud entrepreneurs as “the backbone of American capitalism.” Revered as “the most forward-thinking, innovative minds.” Feared as “disrupters of every industry”. Entrepreneurs understand that in the post-digital age the rules of business have changed. Now there are no rules… only laws, and as Uber & Airbnb have shown, even laws can be somewhat malleable.

Entrepreneurs see the world differently than corporate executives and more importantly they act differently as well. With little resources and within a small amount of time, this new breed of entrepreneur will enter entrenched markets and cause massive disruption to corporations that have previously been untouchable.

Corporations have tried many tactics to combat this rise of disruptive startups. They launch corporate incubators, hold workshops on “Lean ”, and hire Big 5 consultants. All to try and inspire their workforce to think and act more innovative. Yet they are missing the main driver of disruption in their industry. The startup entrepreneurial mindset.

But not all corporations are lacking the entrepreneurial mindset that helps them stay relevant in a quickly changing, disruptive market. What these savvy corporations have figured out is how to work with serially successful entrepreneurs more closely, helping the corporation think and act like a startup, while being able to leverage the advantages most large corporation have.

This secret weapon is a new position within a corporation that is spreading quickly called Entrepreneur in Residence (EIR).

The History of EIR’s

Traditionally, an EIR is a position at a venture capital (VC) firm that is given to an entrepreneur. This entrepreneur was funded previously by the VC firm and then exited their company. The entrepreneur is usually an individual with deep domain knowledge of technology. Additionally, they have experience starting, growing and exiting a business. VC firms retain this expertise and fund the entrepreneur’s next company. In return, the entrepreneur provides the VC firm with value by helping to evaluate potential investments, performing due diligence and advising the firm’s portfolio companies. Once the EIR identifies their next new company, they exit the VC firm as an EIR and a new entrepreneur takes their place.

EIR’s have also appeared in the academic environment. An academic EIR provides the school, professors, and researchers with expertise in entrepreneurship. This allows them to focus on the technology while the EIR focuses on building a business and getting it funded. Academic EIRs also review the school’s past, current, and future research. They look for technologies that have the potential to be commercialized and spun out into a self-sustaining startup.

What is a Corporate Entrepreneur in Residence (C-EIR)?

C-EIR’s help corporations identify and build new startups and innovation offerings utilizing entrepreneurial processes and skills. They create, own, and lead the startup/innovation vision and thesis. These visions/thesis are created based on consumer, technology and market trends identified by the C-EIR. Once identified the C-EIR iterates the startup/innovation ideas to uncover and validate the problems, solutions, and business model.

C-EIR’s aid in architecting prototypes and running pilots spanning both physical and digital formats. Great C-EIRs know when to act in service to the corporation and when to think entrepreneurially, beyond the current needs of the business. To this end, C-EIRs direct and motivate internal corporate teams to do what is needed to advance a startup/innovation within the company. Or they recommend that it is spun out of the corporation, freeing it from restraints that are inadvertently holding it back.

Throughout the process of creating, identifying, and growing startups/innovations, C-EIRs share the vision with the senior executive team. The C-EIR brings them along on the journey of the work being done and insights gleaned. They introduce the senior management team to entrepreneurial perspectives, new technologies, disruptive business models, and strategic partnership opportunities. C-EIRs are uniquely qualified to act as ambassadors to the entrepreneurial ecosystem. They help with vetting external startups as partners, providers, or potential investments for the corporation.

C-EIRs mentor, teach, and coach corporate teams as a startup/entrepreneurial expert. Additionally, they advise senior management on all things entrepreneurial.

Who makes a great C-EIR?

Great C-EIRs need to have deep experience as real-world serial-entrepreneurs. They need experience starting, building and selling multiple businesses targeting large scale opportunities. Through this experience, they develop strong entrepreneurial business acumen and strategic insight.

While being a great entrepreneur is mandatory, C-EIRs also have to have corporate experience. The need to know how to bridge the gap between start-ups and large corporations. The ideal C-EIR will have created numerous startups that worked directly with or on behalf of large corporations. By working with large corporations C-EIRs learn the limitations and advantages that are inherent within the corporate environment.

Great C-EIRs should predominantly be builders of technology versus operationally skilled. The reason why is that most corporations have MBAs on staff to aid in operational experience.

C-EIRs need to have a robust startup and entrepreneurial network of individuals, ideas and opportunities. This enables the C-EIR to act as an ambassador to the startup community, on behalf of the corporation.

And finally, a C-EIR must have experience mentoring, teaching, and coaching in a recognized startup incubator or accelerator. Having experience with an incubator such as Techstars or Y-Combinator, brings a wealth of other individuals startups experience to the corporation.

What does a C-EIR do?

C-EIRs spend their time thinking, researching, building, and meeting on all things entrepreneurial within a corporation. For example, they manage and attend pitch meetings from startups interested in partnering, selling into, or getting funding by the corporation. C-EIRs help ensure that the startup is a good fit and can deliver on their promises.

They work with the Corporate Venture Capital (CVC) arm if the company has one. They aid in due diligence on the corporation’s prospective startup partnerships and investments. Additionally, they request updates from existing startups working with or funded by the corporation.

C-EIRs work with the corporation’s internal innovation teams. They provide startup/entrepreneurial expertise in discussions/meetings as well as mentoring, teaching, and coaching within the corporation at large. They engage with the corporation’s executives helping them answer questions around startup industry disruption (i.e. Uber is the world’s largest taxi company yet owns no taxis, Airbnb is the largest accommodation provider yet owns no real estate, Alibaba is the world’s most valuable retailer yet has no inventory, Facebook is the most popular media owner yet creates no content, etc.…). C-EIRs provide a sounding board for insight into how entrepreneurs create, identify build and grows innovations into scalable businesses, quickly and cheaply.

And finally, C-EIRs act as startup ambassadors for the corporation, meetings with other EIRs, VCs, founders, and other contacts around entrepreneurship.

In part 2 of this article I will cover some questions I have been asked in regards to Corporate Entrepreneurs in Residence. If you have a question, feel free to email me at [email protected] and I will include the answer in Part 2. Additionally, if you want to discuss my personal experience as a C-EIR, over numerous engagements, in small to multinational corporations contact me and we will schedule some time to talk/meet.

To learn more about Inspirer’s Entrepreneur in Residence Location Assistance Program visit: https://www.inspirer.com