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So yes this is apparently a resubmission. But this statement struck me: "Since the acquisition, Biswas, who is 32, has fought to retain the spirit of the vang

So yes this is apparently a resubmission. But this statement struck me: "Since the acquisition, Biswas, who is 32, has fought to retain the spirit of the vanguard, but his struggle reveals an implicit fear — that young engineers might be willing to work at Meraki but not at Cisco (because it’s too big and fusty), or that clients might be willing to buy from Cisco but not Meraki (because they don’t really trust start-ups)." So maybe the answer is for these large companies to spin out R&D departments into their own companies with different names and corporate cultures. The primary customer at first would be the parent, but employees wouldn't have to deal with the nonsense that comes with working at a large multi-national company, or with the risk that comes from working for an unproven startup. The companies could also generate revenue from outside customers that do not compete with the parent and be publicly traded as a separate entity, which means that the value of options given to employees and the underlying stock wouldn't necessarily be tied to the prospects of the parent. Young engineers go to work for the fun R&D startup, and customers buy the products they design from the large, reputable parent.

epa 11y ago
While good in theory - Underlying corporate culture eventually leaks into the core essence of the subsidiaries, thus exposing the true substance of these little companies.
dpiers 11y ago
This sounds like what Cisco does with their spin-in process. They invest $100MM in a new company in exchange for a majority ownership stake, and retain the right to purchase the remaining shares for a previously agreed-upon price based on performance targets. More info here: http://www.businessinsider.com/why-cisco-showered-three-men-with-billions-2014-9 http://www.businessinsider.com/why-cisco-showered-three-men-...
Eridrus 11y ago
Interestingly, this model was advocated for in The Innovator's Dilemma, which was the book that coined the term disruptive innovation. However the parent company is unlikely to be the first customer, since they're unlikely to want the product themselves. Cisco probably didn't want Meraki's business until Meraki proved it to be a valuable one.
- downandout 11y ago
  If a company spins out its critical R&D functions and gives the new company its intellectual property, then yes, it will want the "product" :) . What I'm talking about is creating a new company that begins with the express purpose of doing exactly what the internal R&D department was doing before, with a long-term contract from the parent to do exactly that. The parent becomes its first built-in, guaranteed, life-long customer. You're talking about buying companies that already have IP, which is a different thing.

epa 11y ago

While good in theory - Underlying corporate culture eventually leaks into the core essence of the subsidiaries, thus exposing the true substance of these little companies.

dpiers 11y ago

This sounds like what Cisco does with their spin-in process. They invest $100MM in a new company in exchange for a majority ownership stake, and retain the right to purchase the remaining shares for a previously agreed-upon price based on performance targets. More info here: http://www.businessinsider.com/why-cisco-showered-three-men-with-billions-2014-9 http://www.businessinsider.com/why-cisco-showered-three-men-...

Eridrus 11y ago

Interestingly, this model was advocated for in The Innovator's Dilemma, which was the book that coined the term disruptive innovation. However the parent company is unlikely to be the first customer, since they're unlikely to want the product themselves. Cisco probably didn't want Meraki's business until Meraki proved it to be a valuable one.

downandout 11y ago
If a company spins out its critical R&D functions and gives the new company its intellectual property, then yes, it will want the "product" :) . What I'm talking about is creating a new company that begins with the express purpose of doing exactly what the internal R&D department was doing before, with a long-term contract from the parent to do exactly that. The parent becomes its first built-in, guaranteed, life-long customer. You're talking about buying companies that already have IP, which is a different thing.