There are two kinds of innovation in the world.

Incremental innovation and exponential innovation.

Many large companies focus on the first. Which is fine. It’s the safe thing to do.

Very few large companies focus on the second. At Aimforthemoon we call them moonshots. These are the audacious ventures. The inspiring problems that nobody yet knows how to fix. The company’s risky bets that have the potential to become much larger than themselves.

Here’s a historic example: Dutch electronics company Philips launching a semiconductor maker.

Over the course of four decades, Philips grew it into the world’s sixth-largest semiconductor company by 1999. There were some acquisitions and by 1991 the semiconductor activities were split off from its “host” product division. In 2005 Philips announced its intention to divest Philips Semiconductors into an independent legal entity. In 2006, it sold 80.1% of its equity to private equity investors. By then, the company was called “NXP”. Philips sold its remaining stake in 2010.

Today, their market caps are € 11B vs € 191B. Philips € 11B, NXP € 191B.

I’m pretty sure Philips regrets that decision…

But let’s go back to the moonshot concept. Very few companies launch them for several reasons:

– Boards focus on H₁

– People in corporates “just don’t understand fast-growing companies” as my friend (let’s call him Ralph) says. Until spring this year he directly reported to the CEO of one of the largest Dutch companies in terms of managed capital. “I was literally teaching my investment boards how to assess projects.”

– Moonshot projects may drift away from the mothership’s core activities. Which is what happened at NXP.

Now, I would love you to launch moonshots. But I know It’s not very realistic. So instead, I’m suggesting that you make your future project more moonshot-like.

Why?

As Ralph told me the other day: “You need to get the right people on the bus. My biggest regret is making concessions when it comes to people. Involving the wrong people has slowed me down. It might even derail your entire project. When it comes to hiring people on innovative projects, large companies often have some people available. But the amazing people never seem available. And the amazing people are the ones who make great things happen.”

Who are the “amazing” people?

They are the hungry ones. The ones who are willing to push themselves and take risks to turn their mission into reality because it matters to them personally.

I know several of these people -including Ralph- and the thing that drives them is vision. They don’t care about things like “making €10M revenue within 5 years”, they care about tough, inspiring problems.

This is exactly why companies like NXP and ASML (another company with Philips roots that grew exponentially) are able to attract tens to sometimes even hundreds of amazing people per month from all over the world. I can highly recommend this episode of VPRO Backlight, which gained exclusive access to ASML and its people. You’ll find out why their people say, “I have the best job in the world.”

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