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.

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