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Welcome to the Decoding Innovation podcast series, brought to you by the EY-Nottingham Spirk Innovation Hub, where we explore the innovative technologies, business models and ideas that are shaping the future of industries. During each episode, Mitali Sharma, a principal in the EY-Parthenon Strategy practice, meets with stakeholders at the cutting edge to discuss innovations in their space, challenges they need to overcome and their outlook on the future.

Mitali Sharma

Hello and welcome. I'm your host, Mitali Sharma. And today we're talking to Greg Twinney. Greg is the CEO of General Fusion, a nuclear fusion company. In addition, Greg has the distinction of being part of leadership teams that built and commercialized four highly successful tech-enabled companies. Greg, welcome to the show.

Greg Twinney

Nice to be here. Thanks for inviting me.

Sharma

Greg, would you mind sharing with our audience your journey so far and your background?

Twinney

Sure. I would be glad to. So currently I’m the CEO of General Fusion, but I've spent the last 20 to almost 25 years now in the technology sector, not deep tech, but in disruptive tech. I started my career in the late 1990s in disruptive tech, which back then was building websites in the ‘’dot com’’ days. It was part of a company that ultimately became one of the largest public companies, building websites right up until the ‘’dot com’’ bubble burst in 2001.

So that's when I got my first introduction into technology disruption. It was back in the ‘’dot com’’ and I found that, being part of an organization that is disrupting industry is a really exciting thing to do and it really helps to build a community internally when you are really trying to make a big, big dent in something that currently exists. Back then, building websites at the time meant that physical commerce was going to change completely, and for us, that was the big challenge. It was building websites in a way that would absolutely disrupt physical commerce.

From there, I moved on to another company that was focused on disrupting large data centers. Back in the day in the mid-2000s, there were large data centers being run by banks and insurance companies in a way that currently they are. This was before cloud computing, and those data centers required thousands of people to maintain and monitor all the servers. So I partnered up back then with a founder who had developed a technology for being able to monitor, maintain and oversee many, many servers, much like a virtual robot, basically. And he wanted to bring that to market.

And of course, being a highly technical person, he had the technical capability to do that but didn't have the business expertise to be able to take an idea and turn it into an actual business. So, I joined the company and joined him and together we built the company from an idea through to a large-scale business monitoring, maintaining, overseeing large data centers. So that was my second company, sort of disrupting an industry as well.

The third company was a company called Kobo, an e-reading company. Back in 2009, e-reading was not mainstream. And so, we were looking to disrupt the physical book industry. We had the bold ambition of being the largest e-book company in the world and believed that by doing that, we'd be able to bring books to people globally, to many that currently don't have access to books, and also to allow people to have sort of libraries of books in their pockets. And so, we set out on that mission in 2009, built the company over the course of four or five years and ultimately had the largest e-book company in the world, and working with booksellers around the world in order to do that and disrupted that industry in a big way, and ultimately were purchased by a large e-commerce company.

The next company after Kobo that I was a part of was a company called Real Matters. That company was looking to disrupt the mortgage appraisal industry, which to me was a brand-new industry, much like the prior two companies that I was a part of. I was unfamiliar with the industry when I joined. However, I recognized the opportunity in terms of market size and inefficiencies in an existing industry and said, I want to be a part of disrupting this industry as well. The company was focused on mainly in the US, when you need to refinance your mortgage or get a new mortgage, you always have to get an appraisal. Anything that touches the house’s equity as a means for security requires an appraisal, and it was a very inefficient process in the US with large banks having to reach out to physical appraisers on a daily basis in thousands every day and organize appraisals and get them back from appraisers and all of that.

So, Real Matters, what we did was insert ourselves in that process to be an intermediary between the bank and these independent physical appraisers of homes. What that allowed us to do was almost be like an uber of appraisals. When a bank needed to do an appraisal at a particular location, they would contact us, Real Matters, and we would go and find the best appraiser, organize that, interface with the appraiser, handle all of the billing, all of the back and forth, and the Q&A to ensure that the bank got an appraisal on time as expected, and at the quality they expected. We inserted ourselves there and we're doing thousands of appraisals per day, and that company continues to exist, and has expanded their product portfolio since then.

We took the company public in 2014, and it was a pretty successful IPO on the Toronto Stock Exchange. So again, entering into another new industry, one that I was less familiar with, but partnering with the founder who has a strong technical background and deep understanding of an industry and using my business expertise to help them along on that journey, and that has been the recurring theme in my career, partnering up with founders who have strong technology backgrounds but need the partnership on the business side to do a lot of the remaining pieces. That's the common thread that I've been bringing to all of these companies, time after time.

Sharma

Greg, thanks for sharing that. If we were to think about your background and the commonality around it, disruption comes across very, very strongly. Would you mind sharing with our audience your view on disruptive innovation?

Twinney

It's a good question. It's interesting because when I reflect on my career or even just describing it to you now, it comes across as though I have set out on a journey to disrupt industries, which is actually not a conscious decision that I made 20 years ago when I got into technology.

In fact, it's been just probably something more related to being on a mission that really matters, and that drives me and motivates me in a way that I want to put everything into a particular endeavor. So, when I am looking at opportunities and looking at places to spend my time, it's had to always have a very, very strong ‘’why’’. Do I think I'm going to be able to make a major impact in this industry and with this business in doing that? I think that's why I have bounced between several different disruptive industries and still been successful because I can recognize an industry that is appealing to me and an opportunity that's appealing to me and that I can make an impact in that particular company before I make the decision to actually go on the journey.

Sharma

In each of these cases, you said you started working with the person or people who had the original idea, but could you walk us a little bit around your thought process as you were trying to take that idea and commercialize it?

Twinney

It’s really interesting to me when I talk to young entrepreneurs who perhaps are just getting started and often they are thinking about the idea as being the secret sauce. They don't want to share their idea with anybody because they're afraid someone else will steal it. I actually have a very different thought process around that, and my personal opinion is that the idea doesn't really matter all that much. That's not the secret because there's no real wall around an idea. In my career, the wall that gets created is all about execution and taking that idea and turning it into something that can be executed, moving it forward every single day, week, month, quarter, year, to ultimately keeping your eye on that on that goal – “Why did you start this in the beginning?”, and making sure that everything you're doing is aimed at that. So, for me, it's all about the execution of a great idea and a great technology, more so than actually the technology or the idea itself.

Sharma

So, once you figured out that the idea has potential, when do you know the scope of the disruptive potential? Do you start with that, or do you discover it as you go along?

Twinney: For me, I start with that. I do a lot of mentoring of young entrepreneurs trying to get into a new industry or start a new company. Often the question that I ask them to ask themselves is, if you are successful here and it's a home run and you get 50% market share in this particular industry that you're trying to disrupt, what does that mean? Is it going to matter? And often, what comes out of that is people reflecting on their idea, how they're thinking about things and realizing that even if they hit a home run, it's still too small. The business is going to be too small, and it's not really disrupting on a large enough scale. So, I often think about the opportunity upfront in terms of what does a home run look like and what's that outcome that I want to have in five years. And for me, it has been kind of a five-year timeline for pretty much every company I've been a part of, it has been started and then it’s about what does five years look like, and kind of defining and getting a handle on that at the outset more than dive in and then figure it out later.

Sharma

When you're trying to build a new business, you have to pivot sometimes and it's hard. Pivoting is always hard. What are some of the signals that the market gives you back? And if you can rely on your experience and give us insight into when you did that and how you did that, that would be very helpful.

Twinney

Yeah, that's an interesting question because it is a bit of an art form to know when you're getting traction and when you need to realize that you're not getting traction, and you may not get traction, and you need to pivot. But often what I found as an important indicator early on is finding a partner of some sort inside the industry, and this has been throughout pretty much every company. It is finding somebody in the industry who will acknowledge what you're doing can be very disruptive and very valuable to the industry if you can do it, and then having them actually partner or participate in a way that they may not be putting capital into your company, but they're spending time and resources helping you be successful in one way or the other.

I had a board investor in 2008 when we were trying to bring one of my companies to market. And what he said was, you need to find a partner that cares and what he meant by that is that they are going to put the time and energy to understand what it is that we're doing and help us to bring us along. So, if you can't find people that want to pull you along and you're having to push your way in, I find that is often an early indicator that, if you're having to push, push, push, and no one's pulling you along or interested in helping you pull along, you might have an issue.

Sharma

So can you give us an example of what that might mean for the e-reader company or any of the other companies that you worked with?

Twinney

Yeah. So, for the e-reader company, it's a good one because our entire model is built on partnerships. We built the largest content platform in the world of e-books, the most number of e-books available. We were building e-readers, but we needed a channel in order to sell these e-readers and engage customers. And so, what we did was we went around the world and partnered with the number one bookseller in every single country. Starting within Canada, Indigo and then, as we moved our way around the world, we found the number one bookseller and connected with them and said, “Look, we want to sell our product and our books to your customers. We'll share with you the fruits of all of that. Your customers will be able to access e-books in a way that they currently can't. And that was a major, major defining moment for us as a company, recognizing that the people that we needed to care were the current and existing book selling companies and that pulled us through in a huge way. And it's really interesting because they could have looked at us as a threat because we were e-book company and they were a bookselling company. They had to shift their mindset to recognize that this type of disruption is going to happen, and it will be good for their customers ultimately, and therefore, they should participate in it. So that fueled us. And when we started the company, there were probably about 150 other e-book companies starting in around that time frame as it was sort of a hot time to be starting an e-book company. And this strategy of finding a partner is what allowed us to become the largest one in the world.

Sharma

What you're talking about is convening an ecosystem that is specifically geared toward what you're trying to achieve. What I found really interesting is the fact that you were disrupting the industry and partnering with the same industry. So often in those times, what you had said earlier was that it's very relevant that the inventor is hesitant to part with the idea because then the incumbent could take that idea and run with it.

Twinney

Yes.

Sharma

How did you get over that hurdle?

Twinney

This goes back to something I was talking about earlier, which was in order to disrupt the physical book industry, you would need to build something that is pretty incredible. Books have been around for a while. The expectation when you grab a book off the shelf is that it always works, it's always there. So you need to build something pretty incredible, to disrupt physical book industry.

In order to build something that big, you would need to invest a lot of money, a lot of time and a lot of expertise, and these partners that we made were not able to do that on their own. So think about the largest bookseller in Italy. If they were to go and spend the resources required to build something that will disrupt books for them, they wouldn't get the return in their country alone. They would need to be a global company. And so, our approach was that we will build something that is going to be incredible, something that wouldn't be economically viable in just one country, but will need to be global. And so that was allowing these individual booksellers around the world to join this in a way that they couldn't build this themselves.

Sharma

When you start thinking about product development as a CEO or part of the C-suite, how soon should companies think about building a platform versus one product?

Twinney

Hmm. Yeah, that's an interesting one. And I would say that ultimately it goes back to that question of what is your end in mind? If your end in mind is to disrupt the e-book industry as an example, perhaps you're going to start with just building out the catalog of books and selling it to people who have, their own e-reader of some sort.

But you need to be focused on ultimately what the end goal is. You need to have a path to this sort of bigger disruption play. Otherwise, what you're building will not be appealing and scalable. So if you're building just one piece of the product like we did at Kobo with our catalog, we knew that ultimately that would plug into a platform for e-reading. It wasn't built on its own. And then depending on somebody else.

Sharma

No problem. As you build these companies, scale them, and in some cases exited the IPOs, what has surprised you in this journey?

Twinney

What surprises me often is the stories that get told on the other side of it, including me telling these stories because they often come across as these very well thought out, linearly growing and progressing adventures in business. People look at you and say, “Wow, you had all the force, you know, you're able to see the path and you understood it.”

Often that's just not in reality the way that it works. It's very messy and very iterative. And there are lots and lots of moments where you are uncertain whether you're going to be able to carry on because your competitor comes in or you're out of capital, or your biggest investor has bailed on you because they've got their own problems or all of these types of things. And I think it's really misleading for others that are looking to get into disruptive industries, or even start their own business in some way, because that kind of sets a bit of an expectation that it should be straightforward. And, you know, you hit these walls, while good companies, they didn't do that and their story was straight up into the right. Even you at the beginning of our podcast made a comment that, you know, this sort of string of successful companies, but it's been close and every single company that's been successful, I would say there have been multiple, multiple times where it was uncertain whether we're going to make it to the next stage. I always feel compelled to try and share the reality of how it actually unfolded versus the romantic story of how it be nice to tell the story up until to the right, but it's just not the reality.

Sharma

A lot of innovation and disruption tends to come from entrepreneurial world, you know, fringe of the main industry. Why do you think big companies cannot disrupt as frequently or as well in most cases? There are exceptions.

Twinney

Yeah, I think there's probably a bunch of reasons for that. Often it's too much to lose, in my opinion, when I see big companies that I've disrupted in coming out of nowhere with a startup, as have been companies that have too much to lose. So there's a real opportunity cost to stop doing what they're doing in order to do something new that's very high risk because they're either making profits and revenues and or their stock is based on what the inertia that they've built.

So when you're going to take resources off of this near-term and apply it to a very high-risk venture, the opportunity cost is very high, whereas if you're a startup, you're not giving up anything else. This is it. Generally, what I see is in early-stage startups, you know, with 50 or less people, you are usually attracting individuals who want a mission and don't want not necessarily just a job. They also have a higher level of risk tolerance, I would say. So I think it's a combination of those couple of things.

Sharma

Very fascinating. You know, what you said was very true. One of the things is that comfort with ambiguity, comfort with risk, and then attracting people who are comfortable with it. So that's a fascinating answer. Do you think big companies could somehow maybe change their structure in a way? Or they could learn from the entrepreneurs of the world to bring some of that in-house?

Twinney

It seems as though big companies are going to continue to struggle with that, in my opinion. And that's why I think you see big companies acquire small companies that are doing the things that are going to disrupt their industry, or that an industry that they want to get into because they recognize that even internal incubators and carving out budgets for separate innovation, I just don't think you get all of the ingredients that you get in a startup that is hanging it all out there and doing it all on their own. And that is a really unique experience without a safety net, it drives you in a different way than being inside of a larger company trying to do it.

Sharma

It's fascinating. One more thing. When you're building a team, it's hard to figure out when to scale up. Some companies scale up too fast. Some don't scale fast enough, and both are dangerous. Tell us about to experience in that area.

Twinney

That's a tricky one too. There isn't a real formula for it. But it's a real fine balance of keeping the team stretching and growing as it is before you go and add additional resources, but you don't want to stretch people to the point where they burn out and it's not sustainable longer term. But I would say that in all the companies, there have been these real moments of discomfort throughout the organization as we go through these growing pains, and often the growth is happening in the companies I've been a part of. It's usually pulled us to having to expand the team and we haven't tried to anticipate the growth and hire too far in advance. So that creates some discomfort because you've got a team that's probably executing beyond its bandwidth at certain periods. I have always felt that that is more likely to succeed than sort of overbuilding too soon and you're just spending money too fast. So, perhaps there's a bit of an opportunity cost there and you may miss some of the opportunities because you haven't staffed up and can't take advantage of it. But if you're playing the long game, you eventually will catch up to that as you grow.

Sharma

Greg, this has been a fascinating conversation. Thank you so much for your time today and good luck with everything.

Twinney

Thanks for having me.

Sharma

On December 13, 2022, U.S. Department of Energy and National Nuclear Security Administration announced the achievement of fusion ignition at Lawrence Livermore National Laboratory. This podcast episode was recorded prior to that announcement.

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The Decoding Innovation podcast series is a limited production of the EY-Nottingham Spirk Innovation Hub, based in Cleveland, Ohio. For more information, visit our website at ey.com/decodinginnovation. If you enjoyed this podcast, please subscribe, leave a review wherever you get your podcasts and be sure to spread the word!

 

The views of third parties set out in this podcast are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.

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