June 4, 2025
[Full Podcast transcript at end of page]
One of the most common tensions in corporate innovation is this: how do you build something truly new without shaking the foundations of a legacy brand? That’s what made our conversation with Nancy Yaklich so powerful.
Nancy has done this kind of work at Best Buy, Cargill, UnitedHealthcare, and now Caterpillar—where she’s leading an ambitious initiative called EcoForge, a shadow brand created to test bold, sustainability-focused business ideas outside the Caterpillar brand.
At a time when many companies are retreating to the core, Nancy is pushing into the edges. Here’s what we learned from her:
Nancy launched EcoForge as a way to test new ideas without the weight (or risk) of the Caterpillar brand. And she was refreshingly honest: getting buy-in wasn’t easy. She spent months aligning legal, finance, and executive stakeholders—not with lofty vision decks, but with data, methodical pricing tests, and customer signals.
What stood out to us was how she reframed the shadow brand not as a workaround, but as a truth serum. Without the Caterpillar name attached, customers respond to the product—not the reputation. That’s the kind of clean signal most innovation teams dream about.
Her approach isn’t about avoiding risk. It’s about containing it, validating fast, and letting the market tell you what matters—without jumping the gun on branding, manufacturing, or investment.
Another thing we loved was how Nancy talks about failure. At EcoForge, if a concept doesn’t get traction, it’s not considered dead. It’s “not now.” That’s more than semantics—it’s a cultural shift.
Most organizations default to binary thinking: win or lose, green light or kill. Nancy’s framing allows teams to treat failed tests as learnings worth logging—not liabilities to be buried. This kind of language creates breathing room for iterative experimentation while still preserving accountability.
We’ve seen too many companies afraid to admit when something didn’t work. Nancy has built a language and cadence for testing that makes failure normal—and useful.
Too often, innovation leaders swing between incremental improvements and far-flung R&D that’s ten years from commercialization. Nancy made a compelling case for what she called the “adjacency space”—opportunities that aren’t core, but aren’t science fiction either.
We talk a lot about Horizons 1, 2, and 3. Nancy is building in Horizon 2.5: ideas that can generate revenue in 3-5 years, not 30. She isn’t pitching $1B moonshots. She’s building new businesses that can generate real revenue in specific niches.
“There are riches in niches,” as she put it—and we agree.
Nancy brought a portfolio approach to Caterpillar that didn’t exist before. Instead of betting on a single concept, she frames each initiative as a customer problem worth solving—then explores 3-4 potential solutions. That’s a flywheel, not a funnel.
This resonated deeply with us. At Highline Beta, we’ve seen how many corporate teams treat innovation like a single experiment instead of a system. But you don’t de-risk innovation through one-off wins. You do it through volume, structure, and signal.
Nancy’s team is building that muscle—and helping other groups inside CAT adopt it, too.
We ended the episode on a high note. Nancy’s advice to other innovation leaders? “Now is the time to swing.” In uncertain markets, most organizations play defense. But Nancy argues the opposite: in chaos, there’s cover. Customers won’t remember a swing-and-miss during a storm—but they will remember when you help them solve a real problem, fast.
This mindset shift—from playing not to lose to experimenting to learn—is the core of everything we believe in at Highline Beta.
If you’re an executive trying to navigate corporate venture building, take a page from Nancy’s playbook. Build quietly, test fast, normalize failure, and play for adjacency. That’s where tomorrow’s revenue lives.
We’re grateful Nancy joined us to share her insights—and we hope more leaders start building the way she has: with discipline, creativity, and courage.
— Ben & Marcus
Nancy Yaklich 00:00
Shadow brand approach allows companies to actually go out and test get the data that you need before you actually do any significant investment. When you actually test a concept out under a third party or a shadow brand, your parent brand does not impact how that customer is going to react. So you truly get great market evidence, right? You really understand if there is really demand there, you're really solving that problem so you don't get the benefit of the brand, which is a good thing when you're trying to do something new and different.
Ben Yoskovitz 00:38
Nancy, thank you for being here. Welcome very excited to speak with you today. You've had a long career working at a variety of different companies, in different verticals, building ventures, I would say, you know the title of the podcast, beyond the core and outside of the core of what those companies do. So really want to dig in with you today on that. And you know, currently you work at Caterpillar, and you are working, I'm sure, on a whole variety of different things. But one of the things that caught our attention was this new venture beyond the core called ecoforge. And so, you know, I'd love to start there and understand, you know, how did caterpillar and how did you and Caterpillar sort of get together and say, We've got to go build new businesses or new ventures beyond the core, and then we can speak sort of about how you got to ecoforge specifically, and what it
Nancy Yaklich 01:32
is got it Okay. Thanks, Ben, and nice to meet you as well. Marcus, so, so I was brought into caterpillar to basically stand up kind of innovation and incubation within an emerging group within caterpillar in I'll say energy transition. It's really electrification and energy solutions. So if you think about how the world is trying to get more sustainable in a lot of different industries, same thing is happening in construction. And so there was a lot of interest around electrification, alternative fuels and whatnot. But to build those things, you know, takes a lot of time, takes a lot of money, and so I was brought in to kind of find a way to actually bring rapid product market fit and get that demand first before we actually invest in anything. So we actually started out, me and my team started out kind of talking to customers to understand some of their problems. And what we found was some of the problems did relate to electrification and some of the problems didn't necessarily relate to electrifications. And as we kind of discovered this, you know, we got some really great qualitative research, but qualitative research doesn't really bode well when I'm talking to my finance person, or I'm talking to my legal person, or I'm talking to other folks, you know, the really business minded individuals, if you will. And so I knew I needed to get hard data, very, you know, statistically significant whatnot. And so found this company, Spark nine and said, Hey, I've got this concept that I kind of validated with customers in the market, but now I actually have to go and get demand. And that actually sprung the beginning of ecoforge. We needed a brand that would encompass like sustainability and sustainable construction, but not be connected to cat. So we are separate and apart, or not another entity of cat. We're sort of a way for cat to actually test new concepts without it coming back to cat, to understand whether or not there really is market demand. And if you've been to the website, you can see some of the products or solutions that we've tested. Some of them have been, like, awesome, and they're off the charts from demand, and some of them, unfortunately, were, I'll call them duds, but it's really kind of our testing platform. And so I, you know, it's been a great experience here, and I've actually gotten some other entities within cat to adopt this approach, right? For large manufacturing companies and industrial companies that want to test things beyond the core, it's very difficult for them without impacting their brand, right? They don't want to damage their brand. They don't want to, you know, necessarily, give customers an idea that this might be coming to market. It might be a great idea, but there may not be enough market demand to warrant manufacturing or putting in a new production line. And so this kind of a shadow brand approach allows companies to actually go out and test get the data that you need before you actually do any significant investment.
Marcus Daniels 04:36
And so did you have enough support to put together that shadow brand, or have that sort of interface from an executive level perspective, you said you had some qualitative and quantitative kind of backing, but was that an easy process to get that stood up? You know, it
Nancy Yaklich 04:50
was a longer process than I thought. You know, I come from a lot of industries that run really fast. I mean, retail, like with Best Buy, and so at Best Buy, it was never an issue. Too. In other companies like cat that are, you know, have a really strong brand. Not that Best Buy doesn't have a strong brand. It was a lot of kind of stakeholder. It was a lot of educating executives on why we would do this. I would say that I spent the majority of my time talking with my attorney to get him comfortable with this approach, right? And once we did, then I got my SVP comfortable with this approach, and he's been a super big advocate for doing this, and then we're able to go in and, you know, kind of make the pitch for the funds that we need to build any of those solutions. But it's really about educating, you know, senior leaders, on why you want to use this approach. What's the benefit for it, not only from a benefit from a time perspective, right? Because I can do this fairly quickly, put something up, test it, to see if the market actually has interest in it, but I also can do it in a way that does not either positively or negatively impacts the brand. The other thing that I think is important about this approach is that when you actually test a concept out under a third party or a shadow brand, right your your parent brand does not impact how that customer is going to react. So you truly get great market evidence, right? You really understand, if there is really demand, there are you really solving that problem? So you don't get the benefit of the brand, which is a good thing when you're trying to do something new and different. So it was a little bit of a slog, but, you know, we were able to find a way to actually convince them. But a lot of talks with our our attorneys. I'm
Marcus Daniels 06:42
just curious, just when you say it was a little bit of a slog from a time constraint perspective, how long did it take? Was it months, or was it just a matter of maybe a few weeks? What's your definition of a
Ben Yoskovitz 06:53
little bit of a slog? And see,
Nancy Yaklich 06:56
I'll say my definition kind of changed here. Caterpillar. It was a couple of months, right? So I originally tried to do this concept internally here, using internal resources. And, you know, large organizations have a lot of digital things that they want to do, so I I couldn't find a way to actually do it in, in within Caterpillar like using Caterpillar resources. And so I needed to go outside. And so it was probably about maybe three or four months of just kind of, you know, talking to potential partners and then talking internally, getting my boss comfortable, getting the attorney comfortable, getting the attorney comfortable again, because you'd always come back with new questions and be like, yeah, that's not going to be a problem having him interface with a partner that we ultimately selected so that he got comfortable, and then when we did get enough of that data, that market data, that statistically significant market data, went to a governance board and said, Okay, so here's the qualitative research that we have, here's the quantitative research that we have, and now that's why I'm asking for this amount of money to actually go build prototypes.
Marcus Daniels 08:01
Yeah. Well, a lot of credit to you. Nancy, I know you've seen this movie before in different organizations, and I think you've been able to piece all that together to get some pretty good momentum. Ben and I, you know, we work a lot of organizations globally, and often it's taking 612, plus months to really get that sort of momentum. So, you know, congrats. We have
Nancy Yaklich 08:19
a saying here in North America, we always find a way to do stuff, right? You know, lots of organizations have a lot of, you know, processes that are can be super complicated. We always find a way to get things done, because we know that it's, you know, a lot of things are very dynamic in this space, and so I've got to go out and kind of test that in as rapid as a way as I can. But still being as I always say, we're always, you know, compliant, legal and compliant. We're always legal and compliant. So nobody can come back and kind of point the finger at us and like, nope, nope. My attorney signed off on it, right? And actually, my colleagues in Europe are doing this approach as well. And as I mentioned before, there are other groups in Caterpillar kind of looking at this approach to kind of go out and test concepts
Ben Yoskovitz 09:02
as you think about the next step for some of the concepts, let's say, at ecoforge or elsewhere, that are working. Do you envision those being spun back into Caterpillar being? How do you do a handoff there? Or are you thinking, Oh, maybe we should spin these out as new companies and new entities and sort of go even further away from Caterpillar. How are you thinking about that next phase of whether we call it scale or not, but the next phase in the development of those ventures?
Nancy Yaklich 09:30
Yeah, that's a great question. Ben, when I was at Cargill leaving their digital business incubator, that was a question that we had like, do we move it back into the business? Do we spin it out? One thing actually did get spin out. Most of the other things kind of got encompassed back in one of the lines of business here at cat. You know, we're still trying to prove out some of the concepts, right? So obviously we proved them online. We've got that market demand, but now I've actually got to go and build some of these things and actually see in the real world, do they really solve that problem? Our customers still excited about it, once they actually see it and they can live with it, or is it just something like, well, they were interested, and then they clicked a button and they submitted a form. So we haven't gotten to that point, but I can say that, you know, if there is great market demand and if there is, you know, a steady new revenue stream. You know, I and my and my colleague will do our best to make sure that that gets as much advocacy internally here at cat as possible. Because, again, we're looking at innovation and incubation, right? And sometimes innovation is something that's adjacent or might be transform, transformative for the short term, right? These aren't necessarily long terms kind of play. They might just be for 510, or 15 years. But who doesn't want a new business that has 510, or 15 years revenue stream to augment or supply, you know, supplement what you already have going? So we haven't crossed that bridge yet. We're still kind of, again, building some of these prototypes, getting them out in the real world and trying to bring, I'll say, minimal revenue, into cat to understand, you know, is this really a possibility? Yeah.
Marcus Daniels 11:08
And I think it's a really great insight there, just in how you articulated that and how you pitched it. It really seems like you pitched going on the offense, right? It wasn't a defensive kind of posture. It's, how do we create these businesses for a period of time and generate new revenue. And I think often Ben, and I have seen in the market, sometimes some of these measures are really defensive. So I think it's great that you've been able to take that approach. Yeah,
Nancy Yaklich 11:31
I think you have to, right? And I think, you know, with a company that has, you know, I've worked for some very large companies, Cargill and Caterpillar, whatnot, that have been around for 100 years, and so they're used to doing things in a very long kind of game. But you know, if you have more of an entrepreneurial, corporate entrepreneurial aspect, you know that it might be a short, short term gain. While, you know, there is a niche opportunity, we have a saying. Also here in North America, there's riches in niches, right? And so if you can find a nice little niche, and really, I'll say, take advantage of it. I was actually going to use the word exploit. But if you can take advantage of it, you're going to bring in new revenue. It doesn't mean that that product is going to be, you know, in your product portfolio for the next 100 years, it might be, hey, you know what? We're going to start this. We know that competition is going to come in, and then we'll find an exit plan,
Ben Yoskovitz 12:20
right? So, so it that's an interesting point, because sometimes we're talking to big companies, and, you know, they're thinking along the lines of incremental innovation, and then, you know, crazy, crazy disruption, like, that's where R D sits. You know, they're building flying robots or whatever they're trying to do, and very far from commercialization, it sounds like you're you're you position this somewhere in the middle where you say, look, there are opportunities we can sort of see around the corner. We see those opportunities. We think they're shorter term wins for us. So we don't have to go pitch a 20 year, 100 year vision. We have to pitch a five year P and L, maybe incremental revenue, but in in new areas and and fast. So you want to see that kind of revenue growth pretty quickly. Is that, is that fair, that kind of, that middle spot of it, you know, not so close to the core, but not crazy, R and D,
Nancy Yaklich 13:13
right? Right? That adjacency space, right? There's a lot of opportunity in that adjacency space. And if you think about any, any industry that's going through transformation, there's always, right? You know, a lot of people focus on the core and make their products, you know, just incrementally better, and then, and I've played on the core, and I've also played on a way outer edge, right? I mean, like, way outer edge, and you do have some customers or some interested parties out that that want that way outer edge, but there's always this, like, great space in between that, that adjacency space, where sometimes it gets lost and sometimes, when you talk with customers, they will give you, like clues to that adjacency space that no one is like really addressing. And I think that's where the innovation, that's where the opportunity actually lies. And we've been fortunate enough in some of the work that we've done here in North America to find a couple of those?
Ben Yoskovitz 14:04
Yeah, I totally, I totally agree with that. I think that is where the opportunity is. It's a couple of years out, but not 1020 years out. It's, you know, maybe not six months from now, but it's just around the corner. And so when you were making the case for doing this. Did you try to put dollar values on, I mean, these, these ventures were ideas, but did you say, look for this to be material for a company the size of cat we have to hit, you know, X millions of dollars in y years? Did you try to put financial targets, even though it was super, super early,
Nancy Yaklich 14:39
you know, a lot of companies I work for doing this kind of where they do put a financial target out there, and sometimes those financial targets are just not reachable, not not by any startup, not by a unicorn, not by anybody in corporate. So what we did instead is we would do price tests. We would understand like, Okay, I've got great market demand now. I'm going to go out and I'm going. Understand, like, what am I going to actually? How can I charge? Like, what's going to be my ceiling? What's going to be my floor? And then from there, we're able to extrapolate what potentially this could be over the course of five years, 10 years, whatever it might be, to see how you know what the revenue stream might be. But we never went out and said, you know, this thing here is going to be worth X millions of dollars over the next five years. We wanted to be very strategic about how we approached it, and very data driven as well. So great market data, great pricing data, and then I can start to do the math, right? And then I go out, and if I'm building a prototype, I'll understand some of the costs, right? But if I come out and say, it's going to be a $20 billion business, or it's going to be a $5 million business. I may not understand the cost. I may not understand what I'm going to be able to charge for it. So we took a little bit of a different approach, maybe a little bit more methodical in
Ben Yoskovitz 15:51
nature. Yeah, it sounds also like but like a bottom up approach is the way I describe that, which is, let's not set like a tan, like a total addressable market, on something silly and make numbers up. But let's actually go and sort of methodically work from the bottom and say, Okay, well, if we can sell it for $100 and there's 1000 customers that we think we can reach, we have a number that is. And now we can decide if that number is interesting or not. We haven't achieved it, but we can at least do that bottoms up analysis. I I always encourage all you know, startups to do it that way, ventures to do it that way, even though, most to your point, have to pitch this, like, billion dollar market that we're going to hit in X note, 100 million dollars in five years. I'm like, nobody ever Well, some people do get there, but very few
Nancy Yaklich 16:35
do, yeah, Tam clam, and some if I could say, I mean, that was a methodology we used at Cargill, right? And we did have, like, an astronomical ask for anybody who came into that program, which I don't think anybody ever accomplished it here, what we're trying to do is, you know, people will ask us that, and we say, well, based on the data that we have, here's what we think it potentially could be. But again, it's what we think it could be. It's not proven out. And so then we have to go and prove it out we're about, you know, let's have a hypothesis, go out and prove it, somehow, get some data and then kind of
Marcus Daniels 17:06
refine it. Yeah, we've seen also, when you're the work you do in just putting the financial modeling and testing the assumptions, the Financial Assumptions in that zero to one phase is so important, because you're getting more data as exactly what you described was all kind of the price checking. I'm curious in the pitch strategically You talked a bit about before, about the niches, and you said exploiting, I like to use the word harvest. Was there ever part of the pitch of maybe, if we can dominate this new category, this new very specific niche that becomes very strategically valuable vis a vis our competitors, was that even part of saw how you got were able to get so much support so quickly.
Nancy Yaklich 17:43
It was for one of the ideas that we are that we concept out, and it has to do with sustainability, right? And if you think about, you know, the construction industry in particular, is, is a very old business, and it's a very methodical business. I mean, when, when I visited job sites, the superintendents or the project managers still work on Excel or sometimes even paper, right? And so technology is not necessarily in their forte, no? But
Marcus Daniels 18:09
I think it's important just to note the fact that how you're being able to be successful in pitching, you've taken different angles, right? Took the quantitative angle, you're taking strategic angle. There's many ways on how you can accelerate. Is there anything in in hindsight, you know, thinking about cat and other things you've done, you've done differently in pitching new ventures to boards, yeah,
Nancy Yaklich 18:31
you know, I think one of the things I found in doing this work in a lot of different industries is where this kind of team generally sits right. And for me, I've, you know, I've worked I've done it at United Healthcare, I've done it at Best Buy, and I've done it, you know, at Cargill, and I've done it here at cat and what I find is that most organizations don't elevate this work enough. And by that, I mean it really needs to sit at that Chief Strategy Officer, because you need to span the entire, you know, enterprise. It's not just within a business unit. It's not within just one department. It really should be within the chief strategy officer or chief sustainability or whatnot, really needs to sit that that high up. But every other, every every group that I've been in has been very business. Kind of focus at Cargill was actually interesting. It was actually led by the IT department, because we were focused on digital, right, digital kind of farming, digital kind of products, digital types of services. And so there was a heavier focus on digital. But we did get a lot of senior executives, both from the business units as well as the C suite, participate in, let's say, the review of these opportunities and allocating funds to the internal founders to actually go and kind of do the work. So I think that was probably the best case. But I would, you know, my recommendation and my advice is like, you know, the higher you can. Put this in the organization, I think the better you're going to get, because you're not necessarily tied to, you know, what the strategy is of that department or that line of business. You're really trying to look at the organization overall, or the enterprise overall, and trying to find new lines of business in that kind of maybe adjacent space, maybe even into the core a little bit, but with a tweak. And maybe you're, you know, you know, moving a little bit into the transformation space. But if you do it in a business unit, you're a little bit constrained.
Ben Yoskovitz 20:31
Yeah, we that's exactly what we've seen, which is, when you're focused on innovation in a business unit, you're almost always going to get pulled closer and closer to the business unit, and that just makes logical sense. They've got a roadmap that's as long as anybody's things and goals and targets that they have to hit, and you're off running around doing fun, crazy stuff, and they're like, no, no, can I use those resources to do the stuff I need to accomplish? But then the flip side is also sort of true, which is, if you're too far away, then when you've got this thing and you're like, this works. We validated it, and we need a home for it. I guess you could create a line of business, and maybe that's some of what you're looking at at cat, which is, we're going to spin up a new line of business with its own or you're trying to find a home for it. And if you're too far away and you bring them something, they're like, What? What do you want me to do with this? So I found, you know, too close, and you get incremental, too far, and they they don't care,
Nancy Yaklich 21:24
right? Too far, they don't care, right? And I think that was the challenge that we had at Cargill. Some of the things were, you know, very, I'd say, revolutionary for farmers, but might have been too far away from the line of business. And then some of the other ones were kind of maybe a little bit too core, still, technology enabled, but maybe a little bit too core. And then it would, it was always there was a lot of discussion around like, where is this going to sit? And I think that's a question, as you mentioned, Ben, no matter what you do, right? And so I haven't really found a good model. And maybe you, you, you and Marcus, have found a good model where it is kind of in that middle, right, you're not, you're not, like, embedded in the business unit, but then you're getting, you're not in the ivory tower, you're kind of in that middle again, sort of in that adjacency right area, that middle zone, so that you have that constant connection to, you know, the chief strategy officer, as well as the business, and you kind of all three are working together as you're exploring different customer problems and solutions.
Marcus Daniels 22:31
Yeah, what we've seen is you need to get that initial momentum, and clearly you've been able to do that in different organizations. But then it really is about can you articulate and sell more of a portfolio approach of different ventures that you're going to develop, develop, regardless if they're going to be spun in afterwards, where they sit on the different kind of horizons. But certainly it's been, you know, fantastic to hear some of these insights you provided. Yeah, I'm
Nancy Yaklich 22:54
just going to pick up on that portfolio approach, because when I, when I came here, there wasn't this notion of portfolio. And that's how I operated, you know, at Cargill and other places as well. We always had portfolios, whether it was like at Best Buy, I was leading the health portfolio and I was involved in the, you know, EV portfolio. And so when I got here, I saw that I needed to put some context and some, let's say, portfolio, around some of the things that we were exploring. So it was a customer problem, but we might try three or four different ways to actually solve that problem. And that's where, you know, you try to get that flywheel effect and go, Okay, I'm going to see which one actually has enough sticking point so that you can invest in it, as opposed to doing something that is more, I'll say project based, right? So think of it as a portfolio. What is that customer problem? And what kind of solutions can you offer that might solve that overarching customer problem, and then go out and test them and see which one actually has the best chance of actually, you know, making it to a new product or a new service or a new line of
Ben Yoskovitz 23:57
business is, and you you use the word dud. So I'll, you know, dud, which I thought was a great word, by the way. I mean, I'm going to steal that when I'm trying to explain to some of them are going to be duds. How have you found cat or other organizations you've worked with comfortable with that notion of, okay, I get the idea we're going to try a bunch of things. Fine. I get the idea we're going to do it outside of the core and not involve necessarily a ton of core resources. Fine, I totally get that. I get it's going to be fast. But what's the appetite, the stomach, the understanding, the realization, when you come back and say, we tried 10 things and X number of them, whatever X might be, aren't going to work, so we're shutting them down. What's the reaction you've seen to that?
Nancy Yaklich 24:43
Yeah, I would say that depends on the organization itself. So in some of the organizations I've been in, and I'll point to Best Buy, and I'll point to Cargill, they had a great culture of innovation, right? Obviously, Cargill lots of innovation on the food space. I mean, they have an awesome like R D. Quality facility to do all kinds of things, food related and Best Buy just being retail. The nature of retail, fast, fast, fast, right? You're always trying to change things. So it largely depends on that corporate innovation culture, those cultures that see this as more of a learning experience. And, you know, see these types of experiments, these types of tests, as sort of the, the easiest way to go out and kind of identify the duds and kind of put them on the side. And the dud doesn't mean it's never going to happen, right? It's just not now, right? There's, there's just not, it's not now. And I've got a lot of those duds in my portfolio that I could talk about.
Ben Yoskovitz 25:39
We all do that's
Nancy Yaklich 25:41
natural, no. And if you don't have enough duds, there's something wrong with you, right? Yeah, because you learn so many lessons from those duds. And then in those organizations that really don't have a real strong innovation culture, and I mean innovation, not engineering, not scientific, R and D, but I mean innovation, they don't understand the failures and why. You say, Well, I know you really thought this was going to happen. I've had these conversations here. I know you really thought this was going to happen, but I'm telling you, the market doesn't see that as a problem now, and there's reasons for that. And then you go into the reasons for and then you say, I'm not saying this is never going to happen. I'm saying right now, given the market conditions, given where we are, it's not going to happen. So don't invest anymore and put it on the side, and then kind of take a pulse every six months, every eight months, maybe once a year, depending on market conditions, to see if it's going to change. And then if it is, go back out, test that concept, tweak the concept, test it again, and see if there's any traction. It's not, it's not like dud, it's dead. Put a tombstone on it, right? It's like, not now. And so that's a concept that I've tried to incorporate here, and I've gotten people to start talking about that language. It's not, it's not now. It's not, doesn't mean never, it's not. Now we have
Ben Yoskovitz 27:03
that conversation so many times with people, honestly, it's so funny where, you know, we Marcus and I coming from a background as founders and investors, you know, we just call failures failures, and we're okay with that, you know? And well, I'm not, I don't love failing, but we get that. That's part of the job. But, you know, we've worked with so many companies where we use that kind of word, and they're like, it's going to be hard to sell that in, you know, we're going to go do a bunch of things and fail more than we succeed. I'm like, Yeah, fair. So, you know, the backlog, the you know, not now, is exactly the terminology we use. I still find it. Some organizations don't, and maybe it's the culture they don't really get the learning part, you know, like, I'm buying, let's say, learning, and it's like, well, do I want to buy learning, or do I want to buy revenue, or do I want to buy profit? And so I'm curious also, just like, how do you sell in the note, as you're doing this at cat now? And sort of you mentioned other groups are like, Oh, the interesting process, you know. So we don't call it a failure. We say not now, maybe later. Makes total sense learning like, how do you sell learning into an org?
Nancy Yaklich 28:18
That's a great question, and I'll say that I didn't have to sell learning at cat and I didn't have to sell it at Best Buy, and I didn't have to sell it at United Healthcare or even at Cargill. I think it was part of, part of those companies cultures. Here. There is a learning culture. And the learning culture is, you know, they've had this approach in previous years, like, I don't know, maybe, like, 10 years ago, and then through whatever, you know, they decided to kind of scrap it and do something more traditional. So they always want to learn, right? But I think, you know, what I brought in and what I tried to sell when it came to learning, Ben was, I just don't want to learn, to learn, right? It's like, you know, when you're in, when you're in undergrad school, and you're like, I got to take an elective. You can take art history class, right? But at the end of the day, art history class isn't going to get you into a great MBA school. Or maybe it does. Now, I don't know.
Ben Yoskovitz 29:15
Imagine if we had Art History degrees, though, Nancy, imagine if we do not, we do not. But just imagine.
Nancy Yaklich 29:21
But, you know, so I try to use that analogy, and I'm like, you know, I love art, and I did take art history, but I knew it was, it was like an elector if I had to take just to fill something up, but at the end of the day, like, I really want to learn something that is going to help me determine whether or not this is a thing, right? And so, you know, you mentioned it before, I think, then talking about assumptions and hypotheses, right? Like, what are you actually going to try to learn? Right? I'm going to try to learn. Like, is there really a customer willing to pay this amount per month? Okay, that's pretty, that's pretty, you know, strategic, that's pretty detailed. But if you're just. Going to go out there and say, I'm just going to learn, right? And I say, Well, what are you going to learn? I'm just going to learn. And I'm like, well, that's like going to art history class. It's not really going to have any meaning. It's not going to move the concept forward. It's not going to move it backward. You're basically going to be stuck in the mud. So you have to be I've tried to help folks build, you know, test plans, learning plans, experiment plans, whatever it is. And say, what are the three to five things you need to figure out right now, like right now, as you put this thing in the market, with those customers, those prototype customers, if you will, that will tell you whether or not you should continue the investment. And that's a hard concept here for cat, because they really don't understand that they want to learn, right? And so there's a lot of learning going on, and I'm like, That's awesome, but at the end of the day, it's not helping you decide whether or not I should invest in something or not.
Marcus Daniels 30:49
Well, it's rapid applied learning, because I think it's how you framed it, right? I'm curious a bit about the point you made earlier, about how important the culture of innovation was to really set this kind of fertile grounds. What advice do you have for organizations to effectively have that set properly for corporate venture development, because it is a bit different, right? They use a lot of organizations, I would say, have really strong innovation cultures. But then when it comes to venture building, those activities that you've been successful with, it is a bit different. So do you have any advice from your experience? Yeah,
Nancy Yaklich 31:23
I think, you know, like, I've been fortunate in that I've worked in some companies that had, you know, the real strong innovation, but innovation was always a commercial kind of perspective on it. And so that venture capital or venture building kind of was innate now, right? You just don't go to innovate for innovate sake, right? Those days, I think, are long past. You know? I think it really has to start by getting senior leaders like on board and really understand what it really means and in the companies, and I'll share something at Cargill, right? We had a number of different ways that you could innovate. We had a number of different groups that brought innovation in. We had a way that you could get different color belts, much like six sigma white belt, a blue belt, or whatever color belt, in this type of way of doing it all, with the notion of doing something different than was before, whether it was an internal thing where I'm going to be more operationally effective and improve things, with a concept of it being a bottom line, or externally, that I'm going to actually build a new business, a new line for Cargill, right? So there's always that kind of commercial aspect to it, and I think that kind of goes with the learning the, you know, for the previous response, right? You can learn for learn sake, right? And I think we all kind of do that. I mean, I'm like, right now, kind of dialing way in on AI which, who isn't right, but I'm not doing anything with it. I still need to understand it. I got exposed to it when I was at UnitedHealth. United Healthcare. Did some work there, and then lots at Cargill and a little bit here, but I'm not learning with, let's say, the notion that I'm going to use any one of those models to build an AI based business at this point, but I but the cultures that I've been a part of that really look at venture building and do it well, they have that mix of that innovation, and it kind of permeates the entire organization, as well as that notion of commercialization, right? How do you take that, that thing that you found that has a new way to solve a customer problem, and customers want to pay you for it. How do you then put that in a new product, a new service, new line of business, and whether you, you know, launch it internally as a separate line, or you exit it as a, you know, exit the opportunity and have those folks who worked on it as part of that startup and fund them for the first couple of years, a lot comes down to literally what is the core of that company. Do they really believe in innovation for innovation sake, or do they believe that it's really a way to solve customers problems, and solving customer problems always has some commercial aspect to it, and that's where the venture building comes in.
Ben Yoskovitz 34:18
Right, right? Yeah, I think that the totally, totally agree with that. I've lived this, the experience of learning for learning sake, which sometimes, again, is interesting, like, if you're dabbling in something like AI, that's totally fine, and you hope you can find some applicability to it. I think learning to make better commercial decisions, whether it's like, Let's not do this thing, because we can't figure it out right right now, not never, but right now. Or wait a second, we've got a couple of customers that are excited about this. We should, we should double down and figure it out. Maybe you can walk us through a little bit more. It sounds like you're you. You run a pretty tight ship from a systematic. Experimentation kind of level. So a couple of things, like, one is, is there a playbook there where you sort of establish with folks at cat or elsewhere to say, look, we're going to do X interviews, we're going to do y. If we don't hit, you know, we're going to have scorecards for certain things to say, if we don't hit these thresholds, we're not going to we're not going to move forward, or we will move forward. I'm not suggesting you articulate all of those things, but curious if you've built up that systematic way of doing it, or how qualitative winging it is it, and where's the balance between those two?
Nancy Yaklich 35:33
Yeah, that's a great question. Ben at Cargill, we had a very systematic way about going it, going doing it, and we had a playbook, and it was a challenge to get internal folks to kind of abide, let's say, by the playbook, it's like, yeah, there's a reason we want to go out and talk to customers and get this kind of evidence and data. And after a while, through coaching, and through a coaching network that I set up, you know, I got them kind of focused on it, but it needed to be light enough, right? Because you need to be very nimble, right? And here at Caterpillar, I thought, you know, you know, such a playbook approach probably wouldn't work. So what I did is I took the notion of, you know, the traditional innovation curve, right that we all know, right? And I said, Okay. And then I went out and did some research. And I said, I'm just in North America, so let me understand, let's say, how many construction companies make a certain list, like the ENR, what is the Engineering News Record has a list of like the top 400 engineering or construction companies. Let me use that as sort of my n, the number, and then let me lay the innovation curve over that to figure out what my threshold should be, as I'm kind of moving through the different phases and then knowing that we have some challenges necessary to reach customers, take that number and kind of slice it in half so that it is still a stretch, but but still approachable. And so we did have a little bit of a methodology. It's not as, let's say, rigorous, as I had at Cargill, but it really helped, kind of my team, anyway, kind of get the evidence that we needed to move to that next level, so that I could go to that next level and then go and get additional funding to build prototypes. And it's a very kind of light methodology, like our experiments aren't, aren't as, I would say, well defined as I use them in the past. Like even at Best Buy, we were so into, like, learning plans. I mean, we would spend, you know, I wouldn't say, hours, but we spent a lot of time really crafting those out, and what are we actually going to measure? How we're going to measure it here, it's a little bit looser. It's still a little bit disciplined, but not as, I'd say, rigorous, as what I had at Cargill and what I had at Best Buy. It seems to fit the industry right now, but you know, you know, come, you know, a couple of years from now, might need to tighten it up a bit.
Ben Yoskovitz 38:02
I've never found a one size fits all model, and I always tell folks that, like, you can't bring in a top down model, even what you've used before. And you've lived this experience where, you know, we were very rigorous at Cargill, and I'm sure you know, you come to cat, you read the room, and you're like, Okay, I'm going to take some of these pieces, but I'm not taking the whole playbook and just slapping it on here. I've just never found that, that that that works the sort of top down approach, cookie cutter approach, has worked ever for venture building.
Marcus Daniels 38:32
I'm just curious a bit about leveraging talent outside of the organization you know, taking more of an ecosystem approach. What are some of the best practices from your experiences that you you've you'd love to share just what has worked, what hasn't worked in doing so,
Nancy Yaklich 38:48
yeah, so here at cat, you know, finding really good partners just to help execute experiments was was a big thing for me, and we found actually a great partner in a company called spark number Nine. Super awesome to work with to help us validate things, and then the ecosystems that we've developed really around the startups, right? If you think about like, even at best buying and Cargill, right? It was all about startups who can run faster than organizations. So you know, they might have a great IoT device that can capture sound in, let's say, chickens, and identify the early onset of avian flu, right? Bird flu. And it's like, great if I try to build that internally, it's probably going to take me three or four years. Let's partner with that startup. So I get a lot of work with startups at Cargill on a lot of different, let's say, animal kind of platforms, whether it was chickens, fish, cows, you know, any kind of thing. And we even used external partners startups on crops as well, because they had developed. Computer visioning models that we just couldn't develop fast enough, even though Cargill had a great data center data scientist group, absolutely awesome folks to work with. And we've kind of done the same thing here at Caterpillar. There's companies out there that are exploring, you know, really interesting kinds of new energy platforms. Let's go partner with them. Whether they've been in the business for 10 years, or they've been in the business for three years, they can move faster and and who doesn't want to work with a large enterprise, right? And startups, I always say, you know, yeah, I know you guys want to work with Cargill, or you want to work with Caterpillar, you want to work with Best Buy, but you have to understand that there's a lot of bureaucracy that comes with that. Okay? So it's not going to be as fast and easy as you think. So, you know, just making sure that, you know, you kind of are super upfront with them and they understand that can take a little bit longer to get stuff done, although here we always try to find a way to get things done fast. But our ecosystems are really more about startups and how we can kind of, you know, bring new solutions to customers in the construction world that they've never seen before. So, all
Ben Yoskovitz 41:05
right, well, we're almost at time Nancy, so maybe I'll just ask one last question. What advice would you give to corporate leaders who are looking at the venture building model, you know? So what you're doing, I know you've done it before at cat with ecoforge. What advice would you give them? You know, as they're they're trying to figure this out before they've actually taken the leap to do so,
Nancy Yaklich 41:27
yeah, one thing I would say, now is a great time to do it. So if you're not doing it now, get in right now, because there's a lot of chaos going on, so there's a lot of opportunity. The second thing I would say would be find groups, find peers, talk to other people who've done this have been successful at doing it and not successful at doing it. I think that the one thing that I don't think Caterpillar necessarily did, I don't think they really went out and talked to other organizations that did that before right to understand like what works and what doesn't work, and what you should bring in and what you shouldn't bring in. And the third thing is, is, you know, know that you're, this is an experiment for you as well, right? So, you know, don't think that you're going to have the ideal model. You're going to have to kind of tweak it and adapt it and whatnot, and be conscious of that. And I would say the fourth thing is, you know, you need to get all levels of the organization involved, right. The senior executives have to buy into this, right? They need to bring this up at every meeting, the senior leaders, right, the department leaders, the folks on the field, right? It has to be sort of top down, bottom up. Everybody has to be thinking about doing this, because you never know where that next big solution is going to come to and I would say the last thing is, you know, agencies are great partners to work with, but you got to do the work yourself. You got to sit down with that customer. You've got to have that conversation. Because they'll tell you, you know, yeah, you know, that's that's kind of a problem for me. But what I really want is this, and when they start talking about, when more customers start pointing over here, what I really want is this, you know, they're you're onto something that nobody else has found. And that's where there is really true innovation, that you can really solve something that is a big problem for them right now that is not being addressed by anybody else, and then you can start building that relationship, and, you know, get more solutions to them. So those are the pieces of advice that I would
Ben Yoskovitz 43:25
share. Those are great, by the way, by the way, I think your first one was amazing. They're all great, but that first one was so key. Because the reason I say that is that you know when, when, when things are chaotic, a little bit upside down in the world, wherever the case may be, some folks retrench, right? It's your natural instinct is to say, play defense, like Marcus said, and said, just hold on to the core, do what we're doing and make it more efficient, survive. And others say, No, we're just going to go in. We're jumping into the pool. We're going to go take a swing at this. And your mentality is more that. And you see, I don't know if it's 5050, or what? But a lot of folks are retrenching as opposed to taking a swing. And I'm with you, I think they're missing a huge opportunity.
Nancy Yaklich 44:08
You know, if you take a swing now, no one's going to remember it right, because there's a lot of other stuff going on, and so you can do a lot of crazy stuff, right, crazy innovative stuff right now, and no one's going to know. Your Customers aren't going to remember it, right? And they'll just be on to the other thing, because we are in such a weird kind of situation. If you do it when things are more stable, it seems to be emblazoned in their brain. And always go, I remember that New Coke thing, right? I remember New Coke. But, you know, do you remember some of the other stuff that maybe Pepsi tried, or Dr Pepper, or somebody else? No,
Ben Yoskovitz 44:39
right, right? Interesting. All right. Timing matters. Thanks, Nancy. Yeah. Thank you so much, Nancy. It was great to have a conversation with you, and we wish you the best of luck with all the venture building that you're doing.
Nancy Yaklich 44:50
Hey, thanks. It was great meeting you guys, and can't wait to hear this then, yeah, thank you. Thank you.
We always enjoy conversations about innovation and startup building so please get in touch.
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