I’m betting you like your home, but is your home “conscious” yet?
That question, really, comes from Tony Fadell (and Matt Rogers), who are the founders of the Nest (@nest) company [link]. That’s the company which created a user-friendly thermostat and is now moving into smoke detectors. Nest also made news when it was acquired this month by Google [link]. When asked about what some could consider an odd joining of companies, Faddell told TechCrunch: “Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship.”
In other words, it would seem that the founders of Nest — and now Google — do see homes being “conscious” of their environments and able to change the environment according to the owner’s preferences and/or alert the residents to the need for change. But there’s a larger question here. According to The Financial Times, Google is spending $3.2 billion on this acquisition [link]. So, even for Google, this is a serious bet that this is at least one of the future directions for the Internet. So: Is this what Nextsensing looks like at Google? And other big companies? Does having a corporate venture-capital arm that places small bets on early-stage companies constitute Nextsensing?
You bet it does, and there is much we can learn from this model. Despite Google’s enormous success, size and strong leadership position in search, they are experimenting in many arenas such as driverless cars, wearable devices, the internet of things [link] and much more. Why does Google do it?
The tech world moves very, very fast. Google should (and does) realise that we are at the dawn of a new age when it comes to utilising the Internet. But, as opposed to many who see such change as an enormous threat — as uncomfortable disruptions, Google sees it a continent of opportunity. Basic search, as we know it, will one day be a commodity. And, thus, Google’s venture capital (VC) fund was an early investor in Nest. Yet many other companies (Intel, Microsoft, GE, Siemens and Nokia) have used VC as a way to invest in the future, with mixed success. Which is proof that it takes more than a VC fund to Nextsense your way forward.
Corporate VC is a structural model — a way to organize a particular type of Nextsensing, one that is focused on external efforts to unlock new insights. It can be very effective, but it is not a substitute for generating your own paradigm-shifting insights within your own organization. But money is money without true nextsensing. As Matt Rosoff said in 2012 [link]: “But back in the 1990s, Microsoft invested in companies like a drunken sailor on a spending binge.”
You have to ask some really piercing questions to determine if Google is wisely investing in Nest. Put another way: How does Google know where to place its bets? There is an overarching strategic intent somewhere beneath the surface that shapes, guides and informs where Google looks and listens. Likewise, Google needs internal people with a keen sense of opportunity foresense about future-tense opportunities in order to place its bets on possible productive opportunities in the future. Google has enough cash that they could (and some have said they have!) just throw money at dozens of companies with some whiff of future success. As long as one company hits big, Google will be okay — much like betting on half the field in a horse race. History, however, shows that such behaviour has not really worked for Microsoft and other companies. My point: The difference between investing and gambling is strategic thinking.
The best strategic thinking involves an opportunity foresense derived from the nextsensing process and a clear understanding of how foresense shapes action, whether it is via a VC fund or other structural platform. This truth applies to companies of all sizes and shapes.
While your firm may not have a Corporate VC arm, that does not mean that you get a free pass on forsensing the future. Without delay, you must establish your strategic intent, place future-tense issues on the agendas of senior executives, and lead a conversation about possible productive opportunities for the future in your organisation. To my mind, this is the only way for your own management team to navigate to the continent of future opportunities.