Consumers' Consuming Pattern and Their Demographic Growth Helps To Identify Future Products: Leigh Radford
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Startups are the new-age saviors. They not only bring more convenience to the table but also address the pain points that traditional companies with deep pockets fail to fix. Different approaches to solve an issue while shouldering a risk to lose it all if the service/product does not work make the startup break the ceiling and deliver innovations. Lately, it has been noticed that apart from traditional venture capitals who typically invest in startups, there has been an increase of consumer companies who are carving out a venture arm to support startups.
These startups not only receive funds but also get guidance and the platform to expand their footprint. Two of the largest consumer brands who have done the same are P&G, a multinational consumer goods corporation and Sony, a Japanese multinational conglomerate corporation.
Both the companies extended their venture arm at the same time around 2015.
“We are working with both inside and outside entrepreneurs, to create the next billion-dollar business for P&G. We focus on areas that are not in our categories today. So we're looking to create new categories and new brands,” explained Leigh Radford, senior vice-president/GM & founder P&G Ventures while speaking at the Collision Conference.
Adding further she said this way it keeps them out of the crosshairs of their current businesses and grow new categories for the company. “It's this partnership of entrepreneurs on the outside and the best of P&G to create new businesses for the future,” she added.
Gen Tsuchikawa, chief executive officer and chief investment officer at Innovation Growth Ventures, Sony Innovation Fund, said it was in 2016 when Sony decided to commence investing in startups. He said that the venture arm invests in companies that have business adjacent to Sony’s. At present, the venture arm has invested in more than 80 companies across the US, Europe, Japan, Israel, and India.
He added that collection of data through sensors and then feeding it into systems to get higher output is what startups in mobility, agriculture and retail are looking towards. He said this trend is interesting for them as Sony is one of the leading players in the sensor manufacturing industry. “Another exciting area I would point out is entertainment content creation,” he further added.
The onset of the pandemic last year has wreaked havoc in businesses across the industry. While startups needed funds to float, investors were skeptical in investing at such a time. Radford said it is consumers' behavior that is helping to shape new trends. She said that as more people are staying indoors products like cleaning, personal health care, telehealth are witnessing a rise in demand. She further added that consumers above 60 years of age post-COVID wants to stay remain indoors.
“So that is a big area that we're looking to grow categories to help consumers age in their home longer because they don't want to be institutionalized and even less so now post COVID,” she added.
She said there are two areas to look ahead to determine the consumer need. The first being the consumption pattern which will cover what the consumer is consuming, from where they are consuming, among others. The second is to look at the intersection of where consumers are growing. Taking an example, she said that China’s middle-class and aging population is a big area of focus.
Tsuchikawa added due to the pandemic their investment team is always in dialogue with different nations, which earlier would have required business trips, which has helped Sony to invest. The investment arm has recently invested in a Canadian content creation company called Lander. It has also rigorously invested in cybersecurity companies such as Israel’s Identic and fraud detection company called Arkose. Whereas, P&G Ventures has introduced a new brand called Opte, a skincare digital device that leverages artificial intelligence and algorithms to read consumer skin. Another brand that P&G Ventures is working with is Zevo, an insect-killing product manufacturer.