Diageo’s start-up liquidity
Diageo is never going to be able to behave like the fabled entrepreneur in a garage, which is why the drinks giant leans on its Distill Ventures, Futures Team and Digital Technology Ventures units to tap into start-up spirit, says Steve Mullins. The latter, for example, works up innovation briefs with a committed $100,000 pilot budget for applicants coming up with the best solutions to a challenge. Diageo teams work with start-ups to develop plans for initiatives that might just get to move through to pilot-testing.
Distill Ventures offers both seed and growth funding to third parties. Seed cash is for products which recently launched or are just about to – and it’s all about brilliant liquids with a compelling story, plus entrepreneurs full of ambition. Growth money is for established brands already with an outstanding liquid and looking to take it to the next level. There must be proven sales and loyal customers.
And one output of the Futures Team is the Johnny Walker Blue Label smart bottle – very Internet of Things – which boasts tags that enable Diageo to send personalised comms (think promotional offers, cocktail recipes and exclusive content) to consumers who read them with their smartphones. "Mobile technology is changing the way we live, and as a consumer brands company we want to embrace its power to deliver amazing new consumer experiences in the future,” the brand says.
“Big companies need to be able to operate like start-ups,” said Syl Saller, Diageo CMO, at the Economist’s The Big Rethink event in London. “And that’s why Destill Ventures and Digital Technology Ventures are out there all the time. And the people in our Futures Team understand Diageo, but are very externally oriented.”
She added, “Our tech partnerships are used in many different ways and we have already linked technology to some of our biggest business problems, such as responsible drinking and counterfeiting.”
But isn’t the propensity to failure among start-ups a tad scary?
“We haven’t lost enough through failure at Diageo, which means we probably haven’t been bold enough,” said Saller. “And failure can be learning, it can unlock many brave ideas.”
But instituting a bent towards corporate failure can be pretty difficult.
“A willingness to fail in a big company doesn’t get you promoted or get you a bonus,” Azeem Azhar, evangelist at Brandwatch, said at The Big Rethink Event. The way forward is clearly for large companies to work with external start-ups because they simply can’t do innovation externally. “They don’t have the right culture.”