The founder and CEO of INNOVO articulates the incubation of the New Global Commerce, its unique business model and the unpredictable profit potential based on incredible ambition, a belief in true partnership and 10 years of innovations.
“I have always been incredibly ambitious,” the 59-year-old founder and CEO of INNOVO Network, Martin Kelly said while talking about his business experiences. He is now devoting himself to the expansion of INNOVO, the world’s 1st free managed commercial network which boasts £14m of resources with negligible cash. The idea didn’t come “in an instant blinding flash of inspiration.” For over a decade, Kelly crystallized the INNOVO business model from a series of innovations. When he took charge of Priceless Ltd. in 2003, he gained buying service experience from a model that was not viable. He then set up For Good Ltd. in 2007 and forged strategic partnerships around cause related marketing. From 2006 to 2010, he became the founder and CEO of IP Innovation Partnerships Group Ltd. There he developed the contingent funding business model, engaged with major corporates, implemented innovation sourcing and so forth. As IP couldn’t satisfy the major corporates’ needs to have their own trading company, Kelly launched INNOVO Network in 2011, forming a cost-saving business model which maximizes the benefits for all partners.
“INNOVO has been born out of 10 years of repeated innovations and many, many failures but a few breakthroughs. All of this work has been undertaken in the spirit of true partnership which only works on the basis of trust, transparency and fairness.”
Xi Zhu: What inspired you to run your own business?
Martin Kelly: My passion for innovation and new products was often incompatible with the risk averse nature of corporate organisations. I became frustrated with corporate politics. So much effort was devoted to rivalries inside large organisations. I have always been incredibly ambitious – I’ve always felt the need to achieve something absolutely awesome. I felt I could achieve so much more running my own business especially if it was a successful business which did something that was good and meaningful.
XZ: How did you come up with the idea of building a global commercial network based on fairness?
MK: I certainly didn’t come up with “the idea” in an instant blinding flash of inspiration! INNOVO has been born out of 10 years of repeated innovations and many, many failures but a few breakthroughs. All of this work has been undertaken in the spirit of true partnership which only works on the basis of trust, transparency and fairness. This foundation has actually led to some extraordinary breakthroughs. For example our ability to resource INNOVO without cash because our executives and partners trust us to share the profits of success. INNOVO has been built on incredibly fast strategic partnerships enabling us to weave completely new services into our network within weeks instead of having to take years and spend millions building it ourselves. The realisation that we needed a global commercial network dawned on me in 2012 after repeated failures with individual INNOVO trading companies each focused on a different industry.
“INNOVO’s business model is based on the proven foundation that: Neither INNOVO nor its customers, suppliers or executives need cash to enable commerce."
XZ: What’s unique about INNOVO’s business model?
MK: The world of business is based on the seemingly perpetual principle of competition, whether it’s individuals competing for a job or companies competing for customers. Competition gives employers and customers a choice which drives performance. Yet competition has its price – it leads to duplicated and wasted capacity and above all it leads to mistrust between rivals.
INNOVO’s unique business model arises from partnerships between individuals and organisations based on trust arising from an absolute passion for fairness. It is amazing how such a simple difference in principle enables INNOVO to achieve so MUCH more. For example:
- Build a large business with £14m of resources with hardly any cash.
- Forge strategic partnerships within weeks.
- Weave together partners providing us with infrastructure that would take us years to build and cost many millions.
- Enable individuals to use their talents on major projects for a share of the profit.
- Allowing INNOVO to be a fully monetized commercial network.
- INNOVO’s underlying principles make it relevant to all industries and all geographies.
XZ: How can INNOVO make global commerce free for each partner?
MK: The whole of INNOVO’s development and infrastructure has required input worth £14m from INNOVO’s suppliers and executives, but only a negligible amount of cash. INNOVO’s network generates cash but it does not need cash from any of the parties that work together on the network. INNOVO is an entire commercial ecosystem which is free to access and generates a radically different paradigm for business:
The market for goods and services provided through INNOVO is not limited by the cash available to buy them. Instead, the market for goods and services is defined by their commercial potential.
An unlimited market means that organisations and individuals can achieve much more together than by wasting resources competing.
Companies and individuals have access to unlimited resources, assets and cash, with which to pursue commercial projects. The only limitation is whether the parties to the project believe that by working together, they can generate a profit which is fairly distributed.
It is actually very easy to collaborate on INNOVO with what would be conventionally deemed to be ‘competitors’. This is because organisations pool their resources to generate uncontested profit instead of focusing their resources against the resources of a competitor to fight for a share of contested profit.
XZ: During the model testing period from 2011 to 2012, what attracted the more than 170 executives and what did they expect the model to be?
MK: They were aware of the vast commercial potential of improving procurement and business development. They were attracted to INNOVO because they shared its ambition and the potential that it had. We experimented with separate commercial trading companies, each focused on a different industry. Consequently, they expected the model to be industry specific trading companies. In 2012 however, it became a clear that a global cross-industry network was needed because companies buy and sell across geographies and across industries.
XZ: How do you introduce INNOVO to potential clients?
MK: There are numerous ways that organisations and individuals are introduced to INNOVO:
- Buyers introduce their suppliers
- Suppliers introduce customers and prospects
- INNOVO's partners, such as recruitment firms and consultancies, introduce companies and individuals
- Awareness is created on social media which encourages new members to join
- INNOVO’s executives introduce companies to the network.
“The supplier/innovator offers the customer and INNOVO a rebate from savings generated or new sales achieved. INNOVO earns a share of this rebate that it has created.”
XZ: What is INNOVO’s profit model?
MK: INNOVO enables buyers to save costs and suppliers and innovators to sell more. The supplier/innovator offers the customer and INNOVO a rebate from savings generated or new sales achieved. INNOVO earns a share of this rebate that it has created.
XZ: What is the business opportunity behind the 'free managed network'?
MK: There are a great number of business opportunities that INNOVO taps into. INNOVO helps:
- Suppliers to save selling costs
- Suppliers to sell untilised spare capacity
- Suppliers to save money on their own suppliers costs
- Suppliers to acquire major new customers and enter new markets
- Buyers to save costs on procurement
- Organisations to source and commercialise innovation
- Organisations to set up fast strategic partnerships
- Organisations to have projects undertaken without cash, just a share of the profit
- Executives to undertake work on major projects for a share of the profit.
“INNOVO is working closely with ‘competitors’,as conventionally defined, in strategic alliances in almost every area of INNOVO’s business.”
XZ: Who do you compete with?
MK: Conventional thinking about competing companies in a market is based on the following paradigm:
- The size of the market for a product is defined at any point in time by the total amount of money that customers are willing to spend on the product.
- Competitors can grow their business by taking market share and/or because the market itself is growing.
- Companies have limited resources, assets and cash, with which to grow their business.
- It is very difficult for competitors to collaborate with one another because of the tension that competition injects into a relationship.
INNOVO is pursuing a classic “Blue Ocean Strategy” [See the book “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne, Harvard Business School Press] on “how to create uncontested market space and make the competition irrelevant."
XZ: How do you differentiate INNOVO with its competitors (other global networks)?
MK: One or more of these organisations might choose to compete with INNOVO in the future. This is not a strategic concern because:
They each only provide one of the many services that INNOVO has integrated together. An organisation would have to develop or find all of the other services to offer everything offered by INNOVO. At the same time, INNOVO is not linked solely to one supplier, and has multiple alternatives to turn to, if one supplier should decide not to partner with INNOVO.In this case, INNOVO remains as robust as before.
INNOVO has proved time and time again that it can forge lasting strategic alliances with major partners within weeks. The key to this is trust-based relationships and a fair, independently audited share of the profit for each partner [See the book “The Speed of Trust” by Stephen Covey].
A fundamental pillar of INNOVO’s activities is to get large amounts of work done without cash. The whole of INNOVO has been built with £14m of resources but with negligible cash. INNOVO’s entire network operates without the need for cash inputs. Instead, it can take resource inputs and convert them into large cash outputs. INNOVO has many years’ experience of the processes and methodologies needed to develop businesses and execute projects without cash. It would take an organisation a considerable amount of time to understand and execute the processes and methodologies and how they interact.
In any case, the markets for INNOVO’s services are defined by vast commercial potential across all geographies and industries beyond the existing cash budgets of organisations. There is room for many competitors.
XZ: How does INNOVO deal with its competitors?
MK: INNOVO is working closely with ‘competitors’, as conventionally defined, in strategic alliances in almost every area of INNOVO’s business. In each case there are numerous alternative or parallel partners.
The vast majority of organisations, especially new businesses, have to invest very substantial sums over a number of years in order to build their infrastructure. However, INNOVO rapidly forges strategic alliances with major infrastructure partners which enable it to deploy large scale multi-functional infrastructure for virtually no cash, just introductory commission, contingent fees and share options:
|Partner Capacity||Cost to INNOVO||Speed to Form
|Social network for enterprise||Recently acquired for $1.2 billion||5 million users
|Commission + equity||6 weeks|
|Executive recruitment network||$2m||100,000 senior executives||Small fee + commission
|Procurement network||Recently acquired for $4.3 billion||700,000 suppliers||Commission + equity||4 weeks|
|Innovation network||Unknown||2 million innovation solution providers||Commission + equity||8 weeks|
|e-invoicing & spend analytics||$15 million||$187 billion invoicing
|Commission + equity||8 weeks|
|Numerous other infrastructure elements: HR services, website, marketing, financial services, legal services. etc.||Proven large scale global capacity||Contingent fee
+ commission + equity
|4 – 8 weeks|
For each of the partners, there are a number of alternative partners that INNOVO could switch to, if required. However, this has not proved necessary in the past. The overall strategic impact is to give INNOVO’s network a vast, proven capacity for a very wide range of integrated services. It would have taken many years and cost an enormous amount for INNOVO to build all of this infrastructure itself.
"INNOVO is presently in the early adopters stage with already some 7 Blue Chips registering and trying INNOVO. I feel we are at the tipping point. When these Blue Chips see what opportunities are available through INNOVO it will open a whole new chapter of the New Global Commerce, and then we can all achieve much MORE together."