Allan Young’s Incoherence

News Corporation (NWS-A) and its Myspace subsidiary announced the formation of an incubator named Slingshot Labs. It will be seeded with about $15 million to hire a team of software developers. The goal of Slingshot will be to create new Internet technologies and startups to bolster News Corporation’s properties in Web media, especially social networking giant Myspace.

Myspace has witnessed a significant slowing of growth while watching archrival Facebook achieve healthy expansion over the past year. Even Microsoft (MSFT) bought into the phenomenon by investing $240 million in Facebook at a $15 billion valuation. Much of Facebook’s success can be attributed to the decision to open its technology platform to third party software developers, resulting in an explosion in the number of customized applications for the Facebook community. In so doing, Facebook benefited from the creative efforts of outside talent as users eagerly adopted the various apps, ranging from useful to extremely frivolous. Facebook even teamed up with venture capitalists to form fbFund, a small seed fund to invest in application developers, to nurture continued outside innovation. Slingshot Labs appears to be Rupert Murdoch’s answer to Facebook’s fbFund. Details are still sketchy as to how the incubator will be structured and how it will operate. A formal launch date has not been announced yet.

I’m very interested in what their approach will be. If Slingshot hires all the talent to work internally on News Corporation and Myspace priorities and mandates, I doubt they will achieve meaningful success. If Slingshot functions as a sort of talent scout to fund smart developers whose proprietary ideas are purely innovative and add value to the Internet, then they will increase the chances of producing a hit. Adding specific value to the News Corporation family should be a secondary goal – given today’s move towards open platforms, it’s a goal that could easily be appended to the original idea. Any really good idea should have the potential of succeeding simultaneously on several social networking platforms.

Entrepreneurs are passionate people. We don’t like being told how and what to do; that’s why many of us cannot stay employed for very long. It is why many of us have avoided entering Corporate America in the first place or why many of us are refugees. Incubators that solicit ideas from passionate people and give them the basic tools to build a company stand a better chance of building valuable businesses than incubators that staff up on good talent to manage towards internal, corporate-directed goals. Plus, true innovation is oftentimes an accidental, haphazard process; no ordinary corporate manager will be able to guide sustained innovation. In an age when every social network is talking about being “open” – I hope that Murdoch and Company will take an open approach with Slingshot.

Categories: Entrepreneurship, Innovation, Technology, Venture Capital
Tags: Corporate America, entrepreneurs, Entrepreneurship, Facebook, fbFund, incubators, Innovation, Internet, Microsoft, MSFT, Myspace, News Corporation, NWS-A, Rupert Murdoch, Slingshot Labs, social networking, talent, Technology, Venture Capital, Web, World Wide Web