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Scanning New Horizons for Bold Solutions

NORTHAMPTON, MA / ACCESSWIRE / October 26, 2022 / Baker Hughes

Baker Hughes, Wednesday, October 26, 2022, Press release picture
Baker Hughes, Wednesday, October 26, 2022, Press release picture

Meet the team working to bring fresh ideas to life as innovative technologies to fuel the future of energy.

Baker Hughes created its New Frontiers team as a strategic investment platform to invest, partner, develop and scale early-stage companies with radical new solutions to solve the most intractable challenges for the industrial world working to decarbonize. Vice President of New Frontiers Luca Maria Rossi explains how they're going about it.

QUESTION:
Can you tell us the New Frontiers story so far?

LUCA MARIA ROSSI:

Baker Hughes is proudly present in the oil and gas industry, but we also know that to address climate change we need to explore new fields to advance the energy transition. We are exploring spaces where Baker Hughes does not currently play, with a longer-term view. The idea of New Frontiers is to go out and scout and invest and accelerate the commercialization of promising, breakthrough, cutting-edge technologies.

WERBUNG

We spend a lot of time in the innovation ecosystem, talking with startups, universities, other incubators and accelerators. We scout for, a) technologies, b) interesting startups and c) interesting people that when you bring them together can create new capabilities.

Today we have about 12 people fully dedicated to New Frontiers, with access to more than 200 experts in the company. Our role is to connect the dots, and this is definitely a marathon, not a sprint. We have to be patient because this market is in formation - it will be meaningful by 2030 and huge by 2040.

QUESTION:
What technologies are your main areas of focus?

LUCA MARIA ROSSI:

We have already done nine investments, the first in March 2021. We have a wide range of investments, including in CCUS, hydrogen, energy storage, decarbonization, industrial asset management and other emerging technologies. We invest in a range of ways: sometimes it is an acquisition, other times it's a minority investment, or investment plus licensing. Our role is to keep pushing the boundaries and find where we can place little bets to test new solutions and open up new markets for the company.

QUESTION:
How does your team work with startups?

LUCA MARIA ROSSI:

We are building a new muscle within Baker Hughes, to support our ability to interact better with early-stage companies. We come in with a very strong industrial angle. Baker Hughes of course has many engineers, a lot of factories and global reach, so we can really help take your beautiful idea and get it to scale. But I also tell them, ‘We are a big corporation, and our processes are complicated because they are structured for complex projects.' The New Frontiers team and I are creating special, dedicated processes for startups so that we make sure they are not suffocated by the ‘corporate' processes.

It's easy to say, but it is a big culture change, and we are having success. We now have a dedicated procurement process for New Frontiers. Our typical process takes can several months to qualify a single supplier. The startups can come in and use their own suppliers and go faster. Similar for the hiring process, which may be quicker in the start-up context. And we have different technology milestones for these startups, so we can help them to accelerate.

When our structure overwhelms them, which has happened in the past, we slow things down. One example is in the pre-investment phase when we are scouting. The companies we're looking at normally have five or six people maximum, and our typical due diligence team is 20 people. Of course, this works very well for traditional M&A deals as they are very complicated. But for New Frontiers, we have created a process where we size our due diligence requests to match the means of the startup. It makes sense because our investment is also much smaller compared to traditional M&A. Are we really as lean as I wish? Not yet! Are we going in the right direction? Yes, we are.

QUESTION:
Could what you are learning with this new approach change processes within Baker Hughes?

LUCA MARIA ROSSI:

The concept when investing in innovation is you need to validate your technologies as quickly and cheaply as possible. After that, you can start thinking of it as a traditional mature product, but you want to spend the least money possible to validate your assumptions. The name of the game for our team is how fast can we validate assumptions on investments. We are taking little bets that could have huge returns, and we know that the success rate may not be as high as that of traditional technology because we are investing in products at a very early stage.

In order to make these decisions, we partner of course very closely with our two main business segments Oilfield Services and Equipment, and Industrial and Energy Technology.

QUESTION:
What's the value for startups to partner with Baker Hughes?

LUCA MARIA ROSSI:

The fact that we are an energy technology company is a big differentiator, because technology is at the heart of everything we do. The depth and quality of our R&D team - we have 9000 engineers and scientists, 17 global innovation and education centers and more than 2500 patents - means that we can support innovation to go faster.

Add to that our infrastructure in terms of manufacturing and capability to scale up the technology. Around the world, we have over 650 manufacturing and service centers, plus licensed third-party sites, and 9000 qualified suppliers across 118 countries.

Finally, the commercial aspect. We have global reach and great relationships with our extensive network of customers. We conduct business across 120 countries and have around 250 active projects worldwide and this vast global presence means we have in-country expertise and are familiar with local regulatory requirements. Our portfolio companies can leverage all that.

We are creating a structure where the investments New Frontiers makes align well with the goals of Baker Hughes as well as those of the startup. More often, we take a minority position, where we can cooperate on developing the technology through a license or a joint development agreement, but we leave the company alone to run their own day-to-day business. I am realizing that is a powerful way to work, because it gives us insight to the culture and the company that we are cooperating with and investing in, but at the same time, keeps the right distance for the entrepreneur to be free to run and take their own risks.

QUESTION:
Are you also scouting within Baker Hughes?

LUCA MARIA ROSSI:

Yes! I am really eager to explore our internal innovation, because there are a lot of ideas sitting in the company that do not take off because they are not at the heart of what we do today. New Frontiers is opening the innovation opportunity for everybody who wants to contribute. At level one in our idea generation process, anybody can bring an idea, including our own employees. It's not only about scouting outside. The investments to date have been for outside ideas, because there is a world of new things happening outside, but we cultivate many innovations inside the company, and that requires some attention from us.

QUESTION:
Could you tell us more about Mosaic Materials, a recent acquisition?

LUCA MARIA ROSSI:

I believe this is truly visionary technology. Mosaic Materials is working on direct-air capture (DAC). This is an incredibly challenging but also very promising technology because it can actually separate CO2 directly from the atmosphere, a little bit like a tree does. It is to a scale where you can really solve a lot of the problems around decarbonization, and it may be the only technology to reduce CO2. Other technologies can capture CO2 that has been produced, but this technology can remove the amount of CO2 in the atmosphere, which is amazing.

There are others working in this space and we did a lot of research to find the most promising technology. We have a good relationship with UC Berkeley, which is where the cofounders of Mosaic Materials developed this technology. We know the scientific principle is right, now we are working on an accelerated plan to be in the market with a very competitive product.

QUESTION:
What have you learnt so far in this role?

LUCA MARIA ROSSI

The learning from working with startups is huge - the speed at which they can take decisions or pivot is not easy for a big company like us. We have learned that as much as our processes are powerful and very solid for an established company, there are things we can learn from interacting with startups that can make our processes better. It's a mutual learning - we are learning from the startups and the startups are learning from us.

QUESTION:
Is there anything else you want us to know?

LUCA MARIA ROSSI:

At the moment, my team is based mostly out of Europe and North America, and that's where we've made all of our investments so far. We plan to extend our scouting. There is a huge amount of opportunity in Asia. Australia is very big for us, also Singapore and India. We are trying to work as a connector between the different parts of the company. I would like the New Frontiers team to be perceived as a change agent not only for the business but also for our culture. What we are doing only works when collaboration is very strong and that is one of the biggest opportunities we have as a company.

View additional multimedia and more ESG storytelling from Baker Hughes on 3blmedia.com.

Contact Info:
Spokesperson: Baker Hughes
Website: profiles/baker-hughes
Email: info@3blmedia.com

SOURCE: Baker Hughes



View source version on accesswire.com:
https://www.accesswire.com/722492/Scanning-New-Horizons-for-Bold-Solutions