From Zero to One - Sustaining Growth in the Ecosystem era

In the book Zero to One, venture builder and investor Peter Thiel posed an interesting question, one that grabbed my attention and did not let go of me, until I could come up with an answer.

The question - What valuable company is nobody building?

You would think he was aiming this question at seasoned entrepreneurs, venture founders perhaps sitting in their garage pondering their next big thing. He may have, but working with some of the world's most enterprising companies, some multinationals well over one-hundred years old, I came to realise that this question is not limited by the age of our companies, neither is it constrained by size. It applies to those who embody an enterprising spirit, be they intrapreneurs, capital allocators, or outsiders looking in.

How do we get from Zero to One in an era where Banks no longer compete neatly 'in their lane' with other banks but with an ecosystem of non-traditional rivals, ones that can offer value propositions well beyond banking core capabilities and as they do so with great agility? Similarly, Telcos can no longer rely on sustaining revenues based on sustaining Average Revenue per User (ARPU), for years the industry's key customer metric, but rather services that speak to customer needs. Look to air travel and you might see national carriers, once the pride of nations, that can no longer compete with travel hubs that offer a unique experience in the air and on the ground, think Dubai or Singapore (where I am writing this week's edition from).

Even in infrastructure-rich sectors, the basis of competition is shifting and incumbents can see it, feel it, and are in search of new options. As an example, we can look to Cognite, a Norwegian software company who's parent company is Aker BP, one of Europe's largest independent Oil & Gas producers. When Cognite was launched, it aimed at providing digital transformation solutions to companies in heavy-asset industries, such as its parent. The two companies became the catalysts of an ecosystem, who's shared vision was to digitize the operations of oil companies around the world, and in so doing, deliver low cost and lower emissions. By 2020, Aker and Cognite were testing and piloting their early solutions - robots and drones that conduct aerial and underwater inspections, responding to leaks, performing work that takes humans out of harm’s way, and providing onshore operators with telepresence on offshore installations. The data these pilots provided convinced Cognite and its parent that one could indeed solve something that asset-heavy industries could not solve on their own - end-to-end digitization of their operations

That was the time I first met the Cognite team. As much as they had a significant parent behind them, they looked every bit as entrepreneurial as the late Steve Jobs and Steve Wozniak in their garage. They spoke with a spark in their eyes of the value locked in industrial asset data, they were recruiting a team literally from zero, and within a year, reached nearly 300 staff (a Zero to One accomplishment in itself). Their model was fresh - offering clients the tools to harness industrial data within weeks of launch, co-piloting these data-driven solutions with them, and iterating at speed.

In Peter Thiel's words, every time we create something new, we go from zero to one. The act of creation is singular and the result is something fresh and often strange - seeing Cognite running multiple pilots was one of these.

You see, the Cognite team wasn't trying to fine-tune its parent company's Oil & Gas operations, even though they were given operations to pilot their solutions at. They were creating new paths, that placed their parent company bureaucracy and costly processes (think underwater inspections in the freezing waters of the North Sea). At times, they needed some akin to a miracle, to overcome inertia, and these came in the form of digital technologies, ones they could harness, build a digital ecosystem around, and scale.

Cognite's main offering is its Data Fusion® platform. It helps asset-intensive clients by making industrial data more accessible and meaningful, enabling them to build and test applications at speed. In recent years, the company has grown to support client's sustainability goals and incorporated AI capabilities on its platform.

As they went about proving their transformative approach, one particular ecosystem partner was taking notice. Their digitisation partner in the Middle East was none other than Saudi Aramco. Itself on a journey to invest in disruptive technologies and new business models. In 2022, Saudi Aramco acquired Aker BP's shares in Cognite, a near 10% stake. Aker BP was not merely exiting. Cognite was not a once-off bet. It was part of a portfolio that today encompasses nine (9) companies, from energy to industrial digitisation and marine biotech.

What is shared to Cognite, their parent company Aker and others in their ecosystem is the belief that value can be found in unexpected places, and so it has built its offerings to draw on new data insights that point its clients in the direction of these unexplored places.

As in Zero to One, a company's most important strength is neither being agile or having ample resources on its balance sheet. It is the ability to think anew and create a Blue Ocean of opportunity where everyone else see just challenges.

Where do you see opportunity where others see just challenges? Would you be willing to explore new options with partners, that draw on new thinking, rather than mere rivalry of old?

Feel free to DM me for a discussion - click here for more.

Have a good week ahead.