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Recently, within the span of one week, no fewer than three brand-name industrial giants – Honeywell, United Technologies and DuPont – announced joint ventures to create business-to-business digital marketplaces.

In the “Place Your Bets Economy,” industrial leaders around the globe are aware that they must shed their old husks and (they pray) their low market capitalizations right along with them. These companies are staring at the giddying stock prices of B2B digital marketplace leaders like VerticalNet(VERT) and i2(ITWO) and asking themselves, “How do we get there from here?” (As matter of disclosure, I should note that i2 is one of our firm’s clients.)

(For about two years now, I have privately theorized that we could see a de-coupling of the American capital markets, with the New Economy lifting our NASDAQ to untold heights and the Dow Jones Industrial Average left to its own mostly rusty and heavy manufactured devices. Translation: NASDAQ continues up, and Dow flounders or heads downward. This theory has yet to be tested. But, before this year is out, I think we may see proof one way or another.)

Faced with being locked out of the Internet economy by nimbler first movers who are winning the hearts and minds of empowered customers – or being outflanked by new-breed marketplace metamediaries who create neutral meeting grounds for “your” buyers, “your” suppliers, and your competitors’ product catalogs – what’s an industrial hulk to do?

The answer, in part, may be to look at the business models of venture capital firms. Speaking in gross generalities, venture capital firms place a series of informed “bets” on portfolio partners, knowing that if one in ten has a rocket-ship initial public offering (IPO), they will do quite well, thank you.

Venture capital investments within a given portfolio are not weighted equally. Privately, if pressed, most venture capitalists will admit that they play favorites because they think this portfolio member has a market-rattling technology or that one has a series of valuable patents. But – and this is an important point – although they (discreetly) play favorites, they also play a numbers game, by spreading risk (as mutual funds do) across several investments. In other words, they hedge their bets.

It would not surprise me if more than a handful of the Old Guard public companies start remaking themselves along these lines. Perhaps they will function as public holding companies that create, acquire, or invest in new Internet “plays” that fit with their traditional core competencies or even just their defined brand attributes.

What I am observing is what some business writers, in other contexts, refer to as an “expeditionary” corporation. In theory, the concept is extremely appealing: enterprises that are truly enterprising. As laboratories of customer-centered innovation, their organization charts would, of necessity, have to flatten. To quote a term used in the new, wired U.S. Army, you would require “strategic corporals.”

In fact, this concept requires a different corporate culture than most large companies possess or can even imagine. From the outside, it might appear to be a kind of loosely organized calf scramble. It would require a mix of discontinuous thinkers, for whom everything is provisional, and creative archivists who recognize and document the patterns and key themes. Most baffling of all, there could be real virtue (rather than stigma) in being quickly wrong, resulting in the reallocation of that “bet,” i.e., the personnel, dollars and senior management support, on to the next deal.

CEO as venture capitalist or mutual fund money manager? Welcome to FermentiumT.

This Business article was written by Chris Maher on 3/18/2005