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LG and the hunt for the next-gen business incubator – TechCrunch

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LG and the hunt for the next-gen business incubator – TechCrunch

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Whatever you do, don’t refer to LG’s incubator program, LG Nova, as a venture capitalist (VCC).

LG Nova is the sharpest tip of the spear for LG, the company’s experimental playground for working with startups to explore spaces where the company has spotted areas ripe for future growth. Backed by a relatively large – and rapidly growing – team and a healthy budget, LG Nova is rolling up its proverbial sleeves and exploring versions of the future.

Below is my interview with Sokwo Rhee, Senior Vice President of LG and Head of North America Innovation Center – LG Nova with Friends. The interview is edited for clarity and length.

“Are we a CVC? The answer is no. Hell no,” Rhee said. “CVC, as you know, is a game of venture capital. Their ultimate goal is to have a high return. For this reason, they invest in companies with the potential to increase market value. We are not that; we invest, and while we care about business growth, we look much more at how the business we can build together will grow. But if there is potential to grow the business with us, and if that business has something that we also need to grow our business, then we will invest and work with them. We will do a proof of concept (POC), putting our resources behind the business. And a financial investment is only part of that. We are much more interested in creating joint ventures and joint ventures. For some companies, we can even make outright acquisitions. HVAC is really a financial game; we are more of a business creation game.

“You’re probably tired of hearing about the Metaverse every day,” Rhee laughs, eliciting an honest nod from your correspondent.

“LG Electronics is one of the largest manufacturers of home appliances, etc. We’re doing very well, and we also want to look to the future, especially in areas that we believe are ripe for future growth, areas where LG doesn’t necessarily operate today. LG Nova is for areas where LG wants to expand, but we are not yet. Last year, we created this center to find out what these things are and to develop new businesses in the new areas of future growth.

The team proposed five different areas of focus, explicitly targeting aspects of the market where LG can leverage its platform and ecosystem strengths while expanding its innovation reach. The areas are digital health, metaverse, EV infrastructure and “smart lifestyle”. The latter is an extension of smart homes, home automation and smarter living through the power of technology. Additionally, LG Nova highlights an overarching mandate to review representation across all categories it serves.

“We look for things like helping underserved communities and products and services that can make an impact in communities to improve quality of life,” Rhee explained. “Corporate innovation has happened before, but a lot of it started internally. You take a lot of R&D centers and innovation initiatives, and you spend a lot of time internally in the lab to create something new, innovating within existing structures. We see a very different perspective — we do what we call innovation from the outside in. LG Nova has no R&D capability , and this is done intentionally. We have a few engineers, but we will not build entirely new innovations in-house. Instead, we want to encourage outside entities – startups, etc. – to come up with ideas and work with LG Electronics in this new area of ​​future growth.We want to understand how we can create new businesses together.

“When I talk about new businesses, it can mean a lot of different things. We are ready to create a new business unit if the idea, the suggestions and the partnership hit the mark.

So far it looks like any other business incubator. Still, the devil is in the details, and LG Nova brings plenty of exciting twists to the mix of business accelerators. The implementation of how it works with his startups is much broader than the “write a check and hope for the best” and “here are some customers, good luck” approach that many other companies take.

On stage to announce the launch of LG Nova — Sokwoo Rhee, LG SVP and Director of LG Nova. (Picture: LG Nova)

The process and the benefits

LG Nova has started to find its feet, starting with a funnel process it calls the Grand Challenge program. It all started with a competition launched in September, which he calls the “Mission for the Future”, which has generated a lot of interest from startups; The LG team tells me they’ve received over 1,300 submissions from over 100 countries.

LG Nova differs from many other incubators because it does not take the corporate venture capital approach to investing, nor does it seek technological proposals. Instead, the incubator seeks submissions on how startups want to market their products by leveraging the reach and impact of LG Electronics.

Of the 1,300 proposals, they make a pre-selection of around fifty companies. At this stage, each of the companies is assigned an Entrepreneur in Residence (EIR) who will work with the startups to flesh out the ideas and develop a proposal, determining what the potential synergies are with LG’s overall strategy and strengths. and the opportunities brought by startups.

LG and the hunt for the next-gen business incubator – TechCrunch

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