When LG left the phone business earlier this year, the company declared it instead wanted to focus its resources on growth areas such as EVs and the smart home. Now, LG is trying to put its money where its mouth is: The company on Wednesday announced a new startup competition that aims to accelerate innovation in these areas with mentoring, collaboration and millions of dollars in funding.
The startup competition is run out of LG's new NOVA Silicon Valley Innovation Center. The 12-month plan will ultimately result in 10 companies getting access to $20 million worth of funding and resources to build products and businesses together. It's not the first time the consumer electronics giant has tried to lean on West Coast tech talent: In 2013, LG opened its Silicon Valley Lab to develop its own smart TV operating system. However, prior attempts to merge Silicon Valley innovation with LG culture largely failed, and the lab laid off most of its staff two years later.
This time, it's supposed to be different, thanks in part to new leadership: The company has brought on Sokwoo Rhee as its new SVP of innovation to lead NOVA, and given him the mandate to develop a more collaborative approach that aims to develop new products and businesses together with outside companies. In an exclusive interview with Protocol, Rhee explained what NOVA will focus on, why he doesn't want to build yet another lab and how his experience working within the U.S. government will help him navigate corporate bureaucracies.
This interview has been edited and condensed for clarity.
Tell me a bit about the idea behind LG NOVA.
LG Electronics is a world-renowned manufacturer of appliances, TVs, vehicle components and so on. But there are many sectors that we have not been involved as much. And frankly speaking, there are a lot of smart people outside of LG Electronics. That's why we established this innovation center. We want to create new business opportunities. We want to create an innovation ecosystem so that startups, Big Tech, nonprofits and even government agencies can all work together, and create a situation of one-plus-one equals more than two.
Which role does the startup competition play in those plans?
This is going to be a 12-month program called "Mission for the Future" that brings in hundreds, and hopefully thousands of startups. And hopefully in 12 months, we can create something really tangible, something great that can really make an impact in our lives.
We'll have four tracks. One of the focus areas is remote health care and wellness. The second area is electrifying mobility, electric vehicles and charging-station infrastructure. The third area is smart lifestyle, which is basically the smart home, IoT and so on. The fourth area is the metaverse, which is a little bit more peculiar from LG's perspective. We also have what we call an open track, [which is] basically open [to] any other ideas.
What's the ultimate outcome going to be like for companies that participate? Do you want to acquire them? Invest in them?
So the ultimate outcome may be different [from case to case]. It could be an acquisition, could be an investment, it could be a cooperation. On the health care side, for example, a lot of startups have interesting components, like glucose sensors or blood-pressure sensors. But in many cases, because of the complexity in the health care system, each component itself may not become as prominent as it could. That's where we come in. We are selling tons of appliances, and we [could] incorporate such glucose sensor devices into, let's say, a home network, for example. Startups can work with us, and we can create new business together.
How important is it to be in Silicon Valley for something like this, especially now that everyone is just on Zoom all day?
Innovation can happen everywhere. I was in Washington, D.C., for seven years, and a lot of great innovation happens over there. But our way to do innovation is through collaboration. We don't want to have a single lab somewhere. Our approach is to work with others. To do that, we have to be at the center of global innovation, even geographically. That's why Silicon Valley is important for us.
Companies like LG have tried to get a foothold in the Valley before. This hasn't always worked.
There are a lot of challenges for a large company to try to create an innovative environment, and especially a company like LG Electronics that started outside of the United States. That's why this innovation center is really a mix of professionals who've been with LG for a while, who know the culture, and entrepreneurs like me, who have worked for startups multiple times. It is intentionally designed to have a mix of those talents.
Speaking of your past work experience: Big companies tend to be kind of bureaucratic. They have a way of doing things, and it's hard to break those habits. Do you think years of working with the federal government will help you with that in your new job?
Yeah, well ... [laughs]. You actually answered your own question. Obviously, the federal government is very process-oriented, and for a good reason. I was a startup guy, very much an entrepreneur. Then I did a 180 degrees, [worked] in the government and learned a lot.
You're right, I'm familiar with bureaucracies. And frankly speaking, LG Electronics is actually pretty good in terms of that. [The company] is very aware of the potential issues that may come up, so they are doing everything they can to enable us to do our jobs without getting in the way. Any organization has its own challenges, but I think we can make it work.
