Innovation Department goes beyond the call of duty of a typical incubator or VC fund. Instead of recruiting founders to help their companies get to their own next stage, Alex Song and his team create their own ideas, and fill out teams from there.
Since founding Innovation Department in 2014, Alex has built a portfolio of brands, including e-commerce (CPG products geared towards millennials), media and SaaS companies. (They also maintain a fund for traditional investing, which acquires opportunities through their existing network.)
Leveraging Alex’s experience in investing and a team with diverse backgrounds, Innovation Department has created a playbook of institutional knowledge that can be deployed and replicated. These teams share physical and intellectual resources, learn from each other and function as an ecosystem where shared success and lessons lead to exponentially faster growth.
The Power of Learning Firsthand
Founder, Alex, was inspired to create Innovation Department in 2014 after building his investing career at Goldman Sachs and Pershing Square. Eager to invest in small companies himself, but aware he had much to learn, the founders of his early investments agreed to let him spend time in their office to observe firsthand how early stage companies are built.
He quickly realized that many of his investments needed the same kind of help – developers, designers, general business athletes and sound financial advice. “Not all of my early startup investments were a success,” reflects Alex. “I learned tough lessons, and wanted to build a team that could help with what I saw as common needs.”
Invest Only in What You Understand – Then Replicate It, Quickly and Efficiently
Alex contributes much of his success in his investing career to investing in what he understands and recognizing his limitations. Understanding the challenges of each business he invests in better equips Alex and his team to deploy individual resources as efficiently as possible.
Innovation Department prides itself on the idea that $1 invested equates to $3 of traditional invested capital. They’ve cut out many traditional inefficiencies and are immediately able to grow that dollar with tested strategies, making the road from $0 to $4 million revenue for their portfolio companies a remarkably repeatable journey.
Having already executed this strategy 5x already on the e-commerce front, the team has a clear playbook, developed framework and recognized patterns to help get new ideas off the ground.
The Playbook in Action – DojoMojo’s Recipe for Success
The essence of Alex’s thesis is that brands can grow efficiently and scale products by accessing each other’s audiences and networks. This form power of partnership results in giving both brands higher traffic and better access to people.
Partnership marketing, however, can be an inefficient time-drain. Most people resort to messaging people on LinkedIn, a tedious effort with limited returns. Observing an old process and industry, Alex and his team were inspired to rebuild it. Enter DojoMojo.
Created in 2015 for their own portfolio companies to provide the highest ROI customer acquisition available, an early version of the software started to make its way through the startup community, acquiring 90 million emails for the 3,000 brands in its network without spending a dollar on marketing.
DojoMojo has since hired 13 people and has become a flywheel of scalable audience growth at the core of Innovation Department’s strategy. “DojoMojo should be in the toolkit of every marketer looking for high ROI audience growth,” says Alex. “We’ve seen firsthand that a rising tide lifts all boats.”
Innovation Department is committed to continuing to apply their proven formula for duplicating early stage success with the launch of a new company in 2018.
Thanks to Alex Song and the Innovation Department team for assisting us with this post.