Redefine Innovation

The challenges to creativity inside of large organizations are well documented. But it’s a mistake to think that nothing creative happens inside big companies.

Lots does. Such creativity is often a bit hard to see though, because it’s process-oriented, internally-focused. Self-centered, even. Nothing surprising or wrong with that, per se. Structures define outcomes. And the company structure is designed to reward internal efficiencies and improvements.

The other challenge to seeing it is, it often happens far from the “innovation lab,” under a different label entirely: solving problems. Many of the most creative solutions that have been developed aren’t classified as “innovation” by the organization, because they’re internally-facing solutions to problems, not market-facing new products and services.

Over the past decade, much of this creative problem solving has ended up as software (it’s equally a mistake to think that no programming gets done outside of Silicon Valley). Trillions have in fact been invested in software development at big companies, often to solve internal problems.

These assets – fixes to internal problems, often committed to code – rarely see the light of day. They aren’t celebrated as “innovation” in any conventional sense, because they’re the result of individuals doing what they do: solving problems as they arise in the normal course of doing business. But the time is right to change that, and celebrate internal innovations in the same way that new products and services get celebrated. It’s time to turn such solutions into new products and services that serve customers far beyond the founding enterprise. Market conditions favor exerting entrepreneurial energy towards unlocking these assets.

Imagine a mechanism that does exactly that — acquiring locked-up assets from big companies, leasing them back to the originating corporate, and building them to scale and sell beyond their first customer — and you’ve envisioned freespin. It’s like a sale-leaseback, but for technology ventures. A sale-saasback if you will.

We’ve made our first investment out of the fund, purpose-built to seed exactly these types of opportunities. Specifics of the investment will follow, but imagine it as follows:

[ Firm contributes IP into new entity, in exchange for equity position; new entity gets a 10-year guaranteed anchor first customer and sufficient capital to fund hyper-growth; investors get a post-product market fit venture at pre-product market fit prices. ]

We are ready to do more of these deals, but we need entrepreneurs to help us find them. Our offer in return is great service. We will help you evaluate an opportunity. We will help you navigate your big company counterpart. We will help you work through the interworking technicals of cash vs. stock compensation for the acquisition, the duration of the “leaseback” agreement you enter into, etc. And yes, we want to write you a term sheet to start this kind of company. 

And if you don’t want to start the company yourself, we’ll give you deal tokens if and when any opportunities you raise reach an agreement with the right founder. It’s the ultimate side hustle!

Freespin is your way to turn a former employer — or a friend’s employer — into a highly motivated customer.

And if you’re entrepreneurial and looking for your next adventure, we think this is an interesting model. The business you start will have an awesome, long-term enterprise customer out-of-the-gate. You may not have crossed THE chasm at that point, but certainly will have crossed A chasm.

We have office hours every day. If you’ve got something interesting, we’d love to meet.

Related: Monetize Unidentified Assets

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