Hunting Innovation: Incorporating Tech Scouting & Corporate Venturing Into Your Internal Innovation Process

Acquiring a company is a common way to stay relevant in a quickly changing business world. While tech scouting is a crucial element in any large company’s ability to stay ahead, it is also an extremely challenging task requiring lots of skill, experience and a scouter’s honed intuition. Seeing an opportunity and seizing an opportunity are two different things: a successful tech scouting is the result of the ability to keep track of all the different opportunities, asses, evaluate & compare them properly.

But perhaps above all, the scouting team’s mission is to evaluate whether the direction of the potential company or technology to be bought matches with the strategy of the acquiring company. Below are some tips on how to make your tech scouting more efficient, and best practices to help ensure your search goes smoothly.

technology scouting process successful approaches iconSuccessful Approaches to the Technology Scouting Process

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In 2006, Google bought YouTube for $1.65 billion. In 2014, Facebook purchased WhatsApp in 2014 for $19 billion. HP bought Compaq in 2001 for a whopping $25 billion, and just a few weeks ago, Microsoft bought professional social network LinkedIn for a cool $26 billion.

There are many different types of innovation. Some are internal (involving employees, incremental innovation, etc.), and some are external (involving customers, open innovation, etc.). All these types can be very effective for organizations.

Another successful approach to generate and implement innovation is to search for ideas that are at a much later stage in their development – ideas which have evolved into technologies, products, strategies and even companies. This is what many large organizations do. Technology scouting is when companies assign part of their staff or employ outside consultants to systematically gather information in the field of science and technology to facilitate external technology sourcing.

technology scouting process iconBoost Outreach by Adding Tech Scouting to your Internal Innovation Process

Tech scouting is obviously a costly enterprise, but it often provides companies with numerous benefits to complement their innovation scouting process:

. Fully Evolved Technologies
Developing your own technology requires lots of trial and error. By augmenting your R&D with ready-made technology you’ll enjoy a faster time to market, with much less effort.

. Talent Acquisition 
When you buy another company you acquire not only their technology but also their personnel. This will likely include a highly valuable talent pool experienced across a host of technical disciplines.

. Preempt Competitors
Your competitors are also on the lookout for the latest technologies to expand their product offerings and win a larger market share at your expense. By purchasing the company outright you prevent their tech from falling into the hands of corporate challengers.

. Customer Acquisition
The start-up you purchase may also have a significant customer base in place. This saves you a lot of time marketing and selling the product and gives you great leverage for expanding sales.

. Improves Your Products
Often the new tech you acquire will not only be profitable in itself, but it will also increase the value of your existing products, enabling you to provide a more comprehensive solution to your customers.

. Trigger for New Internal Ideas
Just searching for new technologies to purchase will expose your personnel to many new ideas and technologies, greatly expanding their mindset.

. Boost Your Perception
A company is more than just the people who work at the company and the products/services the company provides. A company is also the shareholders, the customers, and most importantly, the public perception. Tech scouting shows that the company is not stuck in the here and now, but has its eyes firmly set on the future. It shows that the company is agile and flexible, and that you do not plan on staying in a rut, but are putting the company’s money where its marketing messages say it is.

technology scouting process challenges iconChallenges in Tech Scouting

As the saying goes, if it were easy, everyone would be doing it. The fact that there aren’t many tech scouts shows that, like many things in this world, just because something may seem simple doesn’t mean that it really is simple. Tech scouting is full of challenges, and there are many hurdles and obstacles which need to be overcome before the scout’s work is successfully completed:

. Information
Information is one of the world’s most precious commodities. The world of business is primarily, and always has been, a world of information. Companies and businesses are constantly striving to gain as much information about their field, their industry, their partners, their products, and most importantly, their competitors. This is one of the reasons why corporate espionage is so prevalent within the global business community. Especially when closing a deal, be it a licensing agreement, a partnership, merger or acquisition, the party with more information and better access to the information available is usually the victor when two companies go up against each other. In the case of a deal between two companies, knowing that crucial piece of information and having ready access to it could make a difference worth millions. Tech scouting teams need a way to have all the information in one place, available at their fingertips whenever they need it.

. Networking
By nature, we are networkers. Our friends, families, colleagues, acquaintances, gym-buddies and all our other social groups all form different networks. Much like a living organism, the size of our network is reflected in the amount of information (data) available in our network, and the ability to get this information to different parts of the network. Our networks are only so big, though, so when trying to scout a new company or gather information on a potential business partner, a tech scout is potentially hindered by the size of his network, which might not be big enough to gather all the relevant information which he needs and up on which he bases his decisions.

. Masses of material
Once a tech scout has gathered all his information, he will have what seems like several forests’ worth of paper files (or the equivalent in computer data). A tech scout will need to be able to sift through all of the information he has, incuding information he is receiving secondhand from people in his network as well as people in his network’s networks. The amount of information will rise exponentially the more people the scout engages in order to discover information. The crucial piece of information the scout needs might be hiding within this mass of information and paperwork, and the scout needs some way to separate the wheat from the chaff, to address only that which is important while leaving the irrelevant aside.

. Taxonomy
The information has all been gathered, the important pieces separated from the distractions. The scout must now organize and arrange all the information in a coherent, sensible manner in order to help him reach his conclusions. Information regarding finances, products, pending and ongoing litigation, predictions, complications, and dozens of other categories, each of which can spell success or failure for any sort of collaborative project between two companies.

. Rankings
Once everything has been ordered and set into the right category, the information must once again be sorted, ranked by the importance of any piece of information in relation to all the other pieces of information, each of them important. This second sorting allows the scout to focus on areas that are more crucial to the potential deal. Items that are red-flag issues, time sensitive issues or simply burning issues which the scout’s natural instinct say are important. All of these need to be worked into a hierarchy so that when the scout is asked what he feels about any given deal or company, he has the top issues at hand and can immediately respond to the questions asked.

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technology scouting process info sharing iconInformation Sharing

All of the above challenges are daunting in and of themselves, but the final challenge, of information sharing, is likely the hardest of them all. Each scout will be  working on several companies, but must also keep the rest of the scouting team appraised and informed at all times of what he has found, and what he believes are critical pieces of information. Multiply this need to share by the amount of scouts on the scouting team, and you’ll see that the amount of information going around any given scouting team is astronomical. To be able to share all this information among all team members, so all members know what everyone else is working on, is a challenging task that combines all of the above challenges within it, and then adds its own levels of complexity.

Another aspect is the fact that tech scouters do not work in a vacuum. While the scouter can gather all of the information, research a company, follow up on prospective partners and acquisitions, the decision to proceed usually lies elsewhere. Accounting, Legal, Manpower, IT and other departments will all need to weigh in, and a decision must be reached by the CEO and the VPs, the Board of Directors and other stakeholders.

While the tech scout is well versed in gathering the information and what all means, however, the decision makers usually do not have the time (or sometimes the ability) to wade through all the information and reach a conclusion. Therefore, there needs to be some way in which the essence can be presented to the decision makers without all the excessive information which comes along with it.

Tech scouting is similar to any other internal project, and is in essence another project to be managed. Project management systems are crucial to keeping a company running smoothly, and this challenge of tech scouting is just like sending a project for the project manager’s approval before it continues to the next stage.

technology scouting process benefits iconBenefits of a Scouting Platform

Many companies just use an Excel sheet when scouting. But a task this intricate really needs its own dedicated platform. Scouting platforms empower companies throughout the scouting process helping them search, evaluate and even negotiate.

A scouting platform will improve the efficiency of any tech scouting team by standardizing the various opportunities being examined, in order to better prioritize and compare them, both as standalone options and in comparison to each other. No two companies are the same, but the ability to place them all on equal footing is a tool which the tech scout can use to bolster or support their intuitions regarding any specific company.

technology scouting process graphs image

A scouting platform can collate all of the available information, separate it, prioritize it and sort it, and most crucially, share the information with all other scouting team members as well as colleagues who need to see specific aspects of the gathered information. At the same time, a scouting platform can be used to combine the networks of the entire scouting team, exponentially increasing the number of people available to get information from.

Moreover, this easier data entry drives widespread adoption. Seeing the success one scout or one scouting team enjoys by using a scouting platform encourages other scouts and scouting teams to also begin using scouting platforms. In the Darwinian world of global and corporate businesses,failure to adapt could be the difference between being an acquiring company or an acquired company.

Using a scouting platform also provides you with a visible representation of the multiple interactions which are constantly going on, between scouts on the same team, between different scouting teams, between scouting teams and other departments within the company, and between different companies. A scouting platform can also be used in order to see the big picture, by finding insights hidden in your data.

These reasons all translate into a very lucrative bottom line, an improved negotiating position and the ability to handle a significantly larger portfolio.

Q-scout icon for technology scouting process Q-scout

technology scouting process in Q-scout
Qmarkets’ Q-scout tool

Q-scout is Qmarkets’ advanced tech scout platform. It enables large organizations to efficiently identify, develop, and assess external tech opportunities along with acquisitions, mergers, and partnership opportunities. Q-scout helps you gather the evidence which allows you to make an informed decision.

A proven solution, Q-scout tightens your relationship with the business, making sure no opportunity slips by. It can also support your innovation scouting process. Use it to easily find the data you need, share and collaborate on technologies and requirements, engage the right experts within and outside your company, manage and track evaluations, build and manage your pipeline, as well as search for and report results.

Q-scout includes numerous data management features:

Automatically populate your database including importing data from existing Excel files

Automatically extract data from our start-up database

Tag and classify your data anyway you want – for better search

It also integrates seamlessly with your IT:

Two deployment options – SaaS/Cloud or locally deployed on a client server

Single Sign On (SSO) – Ensures full integration with existing Intranet and other legacy systems

Easily adjusts to your IT security requirements – Encryption, restrictions, password management, etc.

Q-scout also comes with Qmarkets’ powerful ‘sonar’ visualization tool, allowing you to:

better sonar

See & segment all platform activities – enabling you to gain a clear overview of where the best ideas are coming from

Forecast the risk, cost, and potential of each idea – allowing you to better respond to trends and opportunities

Streamline workflows – easily identify where bottlenecks are occurring in the system

Q-scout is part of Qmarkets’ Q-360 offering of innovation products which can be integrated together to form part of a company-wide culture of innovation.

 Contact Qmarkets to consult with our experts and discover how your enterprise can innovate and transform ideas into results!

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