We watch with keen interest retailers adopting ‘start-up’ practice. So, when we discovered that the Discount Department Store, Target (US) had launched an ‘Entrepreneur in Residence’ Program in March this year, we were interested to hear more. Namely to understand if this is just another marketing ploy to get in the news or are they serious about thinking differently.
The Entrepreneur in Residence (EIR) program is designed to be an in house incubator to help foster disruptive business ideas. The goal of the program is to help the mass retailer think more like a startup – without traditional processes and systems interfering with innovation. Target developed the idea of an EIR, after meeting with Venture Capitalists (where an EIR is a little more common). According to sources, this has been a big investment.
There a pretty huge reason for this investment – disruptive competition. Like Discount Department Stores in Australia, Target is frequently viewing it’s primary competitor as Amazon…not just Walmart. This means it needs to shred it’s age-old bricks and mortar profile in favour of something little more consumer-centric and modern. Target spent US$1B in 2015 on building their e-commerce ability – that in turn generated a 31% growth. This equated to about 3-4% of total sales – still pretty underwhelming. Hence the move to an EIR program – something a little more aggressive.
Instead of looking inside, Target are looking to attract seasoned entrepreneurs – people who have successfully launched new platforms, products etc – in order to speed up it’s innovation. Casey Carl, Target’s chief strategy and innovation officer – who heads the program, said: “I purposefully wanted to bring in the expertise of those who have done it before – at scale’. Carl’s role in all of this is (aside from finding the entrepreneurs) to help these entrepreneurs keep their ideas in tact within the business – to remove the political and cultural roadblocks that might stop big, breakthrough ideas from making it through to the consumer. Things like excessive meetings that slow down the process, too many project owners, and the need for ROI and certainty – things that exist in big Corps like Target but not in Silicon Valley.
I’m going to finish this article with an awesome and incredibly honest quote from one of Target’s current EIRs West Stringfellow (previously a product manager at Amazon and Paypall): “Target understood they wanted EIRs, but I don’t think they understood what that meant. I am 100% certain they were not prepared for what they got”
Aint that the truth!