Building a startup inside a big traditional company can be a nightmare. There can be a way-things-are-done attitude that will kill experimentation and cause a fledgling effort to fail.
But there are ways to succeed as Gabe Vehovsky has learned.
Vehovsky first built his media startup Curiosity inside of TV giant Discovery, and then spun the company out into an independent entity (although Discovery is still an investor).
Curiosity serves up 3-5 minute “healthy digital snacks” of information about topics from science to tech to animal care. The goal is to give you a conversational aptitude in a topic, which is deliberately steered away from news — or politics, for that matter.
The idea for Curiosity came to Vehovsky while he was working as a liaison between venture capitalists and Discovery, brokering commercial arrangements between the company and startups who might be good partners.
Most people in the education technology (“ed tech”) market at the time were focused on long endeavours that required a big commitment from users, Vehovsky said. Online courses are a good example. But Vehovsky wanted to make something more akin to the “BuzzFeed of learning,” he said.
Discovery’s immediate reaction was “let’s partner, buy, or invest,” Vehovsky recounted. But when he told them there wasn’t a viable opportunity in the market, the company gave him a small four-person team to build a prototype of his vision.
“I was never shut down, or embraced,” Vehovsky said. That ended up being a great spot to be in. He didn’t have insane expectations, but he had a dedicated team to build a first iteration of the product.
After about a year of incubating inside Discovery, Curiosity hit a point where it needed to get more resources and more formal budgeting. There was the choice of taking outside capital to build it, or staying completely within Discovery.
Vehovsky chose to raise outside money and succeeded with a $US6 million Series A round in late 2014, all from venture capitalists in Chicago, where Curiosity is based. Discovery was an investor, too, and took a place on the board, but Curiosity became an independent company.
There was one big reason Vehovsky decided to take outside money. “Good luck getting talent without equity,” he said. And Vehovsky thought maintaining a startup culture was essential to continuing to improve on the product, which was easier to do as an independent entity.
Curiosity still has a ways to go in making “lifelong learning as easy and accessible as sports, news, and pop-culture,” but it has made progress, snagging over 5 million monthly visits to its owned-and-operate properties last month, and a total reach of 75 million, according to Vehovsky.
Even at this point, Curiosity, which now totals 25 people, is a early-stage example of how a big company can foster entrepreneurship inside itself, namely by dedicating some resources to creative projects without weighing them down with huge expectations right out of the gate. It also shows how a big company can eventually set a startup “free” while maintaining its investment and influence.