Reverse Engineering TDK Ventures core values

Nicolas Sauvage
Sep 1, 2021 · 8 min read

I frequently reference how important it is for those of us working in venture capital to unlearn what we learned in our corporate careers, and to then train ourselves to take a contrarian approach to our work. While the most obviously beneficial aspect of these practices is learning to see the potential of an investment opportunity long before others do, unlearning and then working on your contrarian game is applicable in other areas as well.

In this article, I want to share how and why both of these practices were applied to the process of articulating TDK Ventures’ core values. As I’ll explain, rather than convening meetings with the executive team to bat ideas around, or working with external consultants to make sure the values we came up with would be “on trend,” from the very beginning we paid close attention to how we described what we were already doing, how we were thinking about things, how we were behaving, and how we were making decisions. Eventually, we wrote these values down to be more consistent, and to share them with others. The key thing is that we took our time. Two years.

Today, well into TDK Ventures’ third year, our core values represent everything we do. From making the best decisions possible to how we improve continuously, the core values touch on everything. They are also our official commitment to everyone we work with, from entrepreneurs to other VCs and CVCs to those we’re connected to throughout our mothership, TDK.

We change the photo of the entrepreneur each time we update our introduction deck

While it wasn’t initially intentional, we take the CODE acronym for our four core values seriously. Our values really are our code of conduct, and if there’s ever an instance of anyone at TDK Ventures, including me, not upholding them, please call us on it.

The opposite of top-down

One of the most important characteristics of TDK Ventures is that it is not top down.

That’s why writing down TDK Ventures’ values was something I held off on for two years. Rather than me deciding what the values should be and then announcing them, I thought it was important for the values to be an articulation of what we were already doing every day, well after we had built our muscles and reflexes. I observed and absorbed the organization’s culture as it was taking form around me. The TDK Ventures team worked according to its priorities, and I let our team and its culture evolve, made adjustments when necessary, and, after two years, formalized our values.

For us, two years was a perfect amount of time for our core values to incubate before being formalized. As we approached the two-year mark I found that I was having to make fewer adjustments because the team had developed an intuitive understanding of what mattered, and, in a sense, already knew what the values were. It was also a pivotal point in our growth trajectory. I had decided not to add team members because all of us, along with the rest of the world, were dealing with the COVID pandemic. So the team had been stable for more than a year, but there was growth on the horizon, which made it critical to crystalize our values before our size essentially doubled.

If you’re thinking about what your VC or CVC’s core values should be, my advice to you is to simply listen to the heartbeat of your organization. During the first two years of TDK Ventures’ existence, it was impossible to not hear us talking about the paramount importance of putting entrepreneurs first. We also talked about our commitment to making meaningful contributions to society and the importance of working with entrepreneurs who demonstrated the same commitment. And, with more than 20 TDK Ventures Briefings behind us, we were sharing high quality, deep insights with the groups to which they pertained most directly at TDK.

The values identified and agreed upon, each of which I am introducing briefly below, were already an important part of the culture that was forming at TDK Ventures. While they were also embedded in the core values of TDK, TDK Ventures needed its own core values because there are fundamental differences in how we operate as a corporate venture capital group. Our core values reflect our connection to TDK, but the differences in those core values reflects the looseness of that connection. As I explained in this article about the importance of unlearning, the loose nature of our connection to TDK is by design.

Making our core values official was important, not just internally for team members, but probably even more so for everyone with whom we work. Our core values are both our guideline and our promise, and it’s important that they leave no doubt as to what guides our actions and informs our decisions.

C for Contributing to Society

Our investments, as well as the work we do throughout the entrepreneurial ecosystem, are guided by our unwavering commitment to make a meaningful contribution to society. The contributions made by the entrepreneurs we work with can look quite different on their surface. It might be enabling sustainable energy solutions, or accelerating an advanced materials breakthrough, or ensuring wider availability of sophisticated healthcare technologies. Contributing to society may also entail choosing to not invest in startups linked with things that actually harm society, such as weapons or e-cigarettes. Simply put, we invest only in projects that are good for the planet and good for the people who call it home. Contributing to society is one of TDK’s core values. It was anchored in the company’s corporate motto 86 years ago: Contribute to culture and industry through creativity. It’s not surprising that it guided the first two years of operating TDK Ventures and then percolated into one of our four core values.

O for One Team, Reaching for the Sky

“One team” is a phrase that’s often heard inside TDK, and it’s a powerful, meaningful phrase at that. But when I tried to apply it to TDK Ventures as a core value, something was missing from our way of collaborating and ambition. I wanted us to strive to be number one in everything we do, to move the needle, to wanting to contribute in the doubling or even tripling of TDK’s annual revenue. “One team” speaks to collaboration, which is important, but with TDK Ventures, our goal was — and is — to contribute to raising the bar for the entire ecosystem and industry. We want to come together and work together as one team, pushing ourselves and our industry to always reach higher and push further. That’s how it became a core value.

A key component of this value is recognizing that we are not perfect, and that we’re not going to get it right every single time. The important thing is that each of us is fully committed to continuously improving how we serve entrepreneurs. Our team’s diversity and expertise are competitive differentiators. We value and appreciate what each member brings to the work we do every day. As we embrace the spirit of innovation, we seize opportunities to reach for the sky together. We do this by setting even higher standards for the work we do. And the work to which we’re committed to bringing higher standards doesn’t end with the walls of TDK Ventures. Our sphere includes TDK, the ecosystem of entrepreneurs we are here to serve and support, and the investors with whom we want to build meaningful and long-lasting partnerships.

D for Delivering Deep Insights

Our product is the deep insight we develop in the high-growth strategic spaces we’re exploring. We want to learn by investing in spaces in which TDK wants and can contribute to in the future. Our core value is to deliver insights we accumulate from our work in the startup ecosystem so that they can be leveraged to help shape TDK’s vision and growth strategy. At the heart of that growth strategy is the commitment to make even greater contributions to society — which circles back nicely to our first core value.

In just two years, we’ve shared with TDK what we’ve learned about a range of topics, including batteries recycling, EV lithium-ion battery systems, med tech commercialization, diabetes technologies, metal 3D printing, AR solutions, eVTOL, implantable biosensor, automotive radar, hydrogen backup power, optical solutions for 3D sensing, humanoid robotics, solvent-free electrode technologies, and many more. These self-contained units of learnings, which we call TDK Ventures Briefing, contribute to the base of knowledge that informs and drives TDK’s long-term strategy.

E for Entrepreneurs First

The E in TDK Ventures’ CODE of conduct stands for entrepreneurs first. As this article about how we work with entrepreneurs even when we say “no” demonstrates, our core value is not portfolio companies first, but entrepreneurs first. It’s a meaningful difference.

Helping entrepreneurs succeed has been the priority since I jotted the first inklings of what became TDK Ventures into my notes during a course at the Stanford Executive Program. Quite naturally, and with very little fanfare, entrepreneurs first didn’t exactly become a core value, it simply was a core value. It was what drove every recruitment decision, what we arranged our days around, what drove our decisions, and what put parameters around our thinking (and, on occasion, removed them). When the time came to officially declare our core values, entrepreneurs first declared itself.

Of all four core values, entrepreneurs first is the simplest yet most powerful. Entrepreneurs are our customers. They are the heroes of our story. And they are at the core of everything we do. We are inspired every day to bring our passion, conviction, courage, and patience to serve entrepreneurs. We are dedicated to helping them bring to life their dreams of a future that is sustainable and attractive for all.

Putting it to the test

Finally, I want to share an example of how our core values sometimes come to life, step off the screens on which they appear, and become drivers of conversations and the decisions that ultimately arise from them.

An important part of our commitment to improving how we serve entrepreneurs is the platform team we’re building to partner with the companies we invest in at a wider and deeper level than what’s typically offered by a CVC. Earlier this year, the entrepreneurs we serve let us know through our NPS survey that they wanted help with marketing. I was not expecting this request at all, never mind from multiple portfolio companies. But in staying true to our entrepreneurs first and one team reaching for the sky values, we adapted our recruitment plan and added the full-time Marketing Principal position to our platform team. Next year, we’ll strive to reach even higher, focusing on what the entrepreneurs we’re working with deem most important. This is what we call TDK Goodness — consistently going beyond what’s expected in order to serve entrepreneurs even better.

As even a brief visit with any TDK Ventures team member or a quick read of our core values makes clear, we’re here to serve entrepreneurs. It’s one of our core values, but at the same time it’s more than one of our core values. It’s what we do.

TDK Ventures

TDK Ventures invest in — and serve — early-stage innovative hard-tech startups