Whatever you do, don’t view LG’s incubator program LG Nova as a corporate venture capital (CVC) organization.
The LG Nova, the company’s experimental playground, is the fanciest tip of the spear for LG, which works with startups to explore places the corporation sees areas ripe for future growth. Backed by a relatively large – and rapidly growing – team and a healthy budget, the LG Nova is rolling up its proverbial sleeve and exploring future versions.
Below is my interview with Sokwoo Ri, LG’s Corporate SVP and Head of North America Innovation Center – LG Nova, among friends. The interview has been edited for clarity and length.
“Are we CVC? The answer is no. Hell no,” said Ree. “CVC, as you know, is a venture capital game. Their ultimate goal is to get high returns. Because of this, they invest in companies with the potential to grow in market value. We are not that; We invest, and while we care about the growth of companies, we look more about how the business we can build will grow. But if the business with us has potential to grow, and if that company has something that we need to grow our business as well, then we’re going to invest and work with them. We will do Proof of Concept (POC) keeping our resources behind the company. And a financial investment is just one part of that. We are more interested in forming joint business and joint venture. For some companies, we may even do outright acquisitions. CVC is pretty much a financial game; We are more of a business building game.
“You’re probably tired of hearing about the Metaverse every day,” Rie laughs, garnering an honest concurrence from her correspondent.
“LG Electronics is one of the largest manufacturers of components etc. We’re doing very well, and we want to look to the future as well, particularly in areas that we believe are ripe for future growth, areas where LG may not necessarily be working today. The LG Nova is meant for areas where LG wants to grow, but we’re not there yet. Last year, we set up this center to find out what those things are and develop new businesses in new future growth areas.”
The team came up with five distinct areas of focus, clearly targeting the market segments where LG can leverage the strengths of its platform and ecosystem while expanding its innovation reach. These areas are digital health, the metaverse, EV infrastructure, and “smart lifestyles”. The latter is an extension of smart home, home automation and smarter living through the power of technology. Furthermore, the LG Nova highlights a broad mandate to see representation across categories.
“We look for things like helping under-served communities and products and services that can have an impact on improving the quality of life in communities,” Rea explained. “Corporate innovations have happened before, but a lot of them started internally. You do a lot of R&D centers and innovation initiatives, and you create something new internally in the lab, within existing structures. We spend a lot of time innovating. We’re looking at it from a very different perspective – we’re doing what we call out-in innovation. The LG Nova doesn’t have R&D capability, and it’s intentional. We have There are some engineers, but we will not be creating completely new innovations internally. Instead, we encourage external entities – startups etc. to propose ideas and work with LG Electronics in this new future growth area We want to find out how we can build new business together.
“When I say new businesses, it can mean a lot of different things. We are ready to create a new business entity if the ideas, suggestions and partnerships impact domestically.
So far, it feels like any other corporate incubator. Still, the devil is in the details, and the LG Nova corporate accelerator is bringing a lot of exciting twists to the mix. Applying how it works with its startups is much broader than the “write a check and hope for the best” and “here are some customers, good luck” approaches that many other corporates are taking.
process and benefits
The LG Nova has started to find its feet, starting with a funneling process it’s calling the Grand Challenge program. It started in September with a competition it called “Mission for the Future”, which was met with great interest from startups; The LG team told me that it received over 1,300 offers from over 100 countries.
LG Nova differs from many other incubators in that it is not taking a corporate venture capital approach to investment, nor is it looking for technology proposals. Instead, the incubator is exploring how startups want to bring their products to market by leveraging LG Electronics’ reach and influence.
Out of 1,300 proposals, they form a shortlist of 50 or so companies. At this point, each company has been assigned an Entrepreneur in Residence (EIR) who will work with startups to advance ideas and make a proposal, figuring out what LG’s big picture strategy and What are the possible synergies with strength. and opportunities brought by startups.