In April 2020, PSL started working with Fortive, a leader in industrial technology and measurement, and parent company to Fluke, Techtronix, and Industrial Scientific. While Fortive has many innovation approaches and programs internally, they had a strong desire to create new, stand-alone companies and turned to PSL as a partner. The “joint innovation studio” is charged with developing new businesses focused on categories and technologies aligned with Fortive’s strategic priorities and leverages the PSL playbook and resources for company creation.
This week, Fortive acquired TeamSense, the first spinout company from the joint innovation studio, and we wanted to share the story of the company’s creation to acquisition in just 18 months.
When the studio partnership began, COVID-19 was radically changing the way every company in the world operated. Like any significant disruption, we quickly understood that this would bring a completely new set of customer requirements for different products across every industry.Our ideation turned toward the challenges that companies deemed “essential” were experiencing, and their need to safely operate, communicate, and ensure the business was following the dynamic protocols. In less than six weeks, we had developed the basic idea for a new company, validated the customer need with a handful of early adopters, built a working first version, and were ready to begin taking on customers. In early June, this initial idea became our first spinout, TeamSense. Even by PSL standards, this was a fast process, so as you can imagine, it was “lightning-fast” compared to a typical corporate innovation timeline.
While the core validation and initial product team are predominately PSL employees, the long-term success of the startup is ultimately driven by fantastic leadership. This provided another area of collaboration between Fortive and PSL. In the earliest days, Alison Roy Ting joined as a founding product leader, partnering with the PSL team on early customer discovery and feature prioritization. As we gained conviction on the idea, Sheila Stafford, a fast-rising executive inside Fortive joined as the co-founder/CEO. Together, we made rapid progress as Sheila and Allison evolved the vision and accelerated execution.
TeamSense quickly acquired their first customers and iterated the product weekly, bringing new features to market based on evolving customer demand and ever-changing COVID safety protocols. The ability to assemble an excellent full product team (design, software engineering, data science) and operational expertise (e.g. customer onboarding, contracts...company formation) in the early days is a hallmark of a great startup studio.
Over the coming months, PSL recruited a CTO and other FTEs to round out the team and smoothly transition the core PSL team members to work on new projects. The methodical handoff of roles and responsibilities is another benefit of the studio model, especially in comparison to a normal corporate situation, where the ability to identify, recruit, and replace talent is more challenging. Startups are all about speed and momentum!
After spinning out of the studio, TeamSense continued to scale and add product functionality in a rapidly-changing environment including absentee reporting, employee call-off, and mobile access to company resources. They won significant enterprise customers with many thousands of employees. The alignment with Fortive continued to increase with some cross-selling and coordination with other Fortive business units’ future plans.
After a company spins out of the joint studio and is operating as a startup, it has the potential to go the “standard” path for a startup, raising venture capital and scaling independently. Given Fortive’s unique structure with many stand-alone companies under the corporate umbrella, another success path exists: Fortive can acquire the companies we create together. This process of “building for acquisition” is another unique way that Fortive and PSL have approached the joint innovation studio. With tremendous momentum, a big vision, and strong alignment, Fortive chose to acquire TeamSense. TeamSense will continue to operate as a stand-alone business unit inside Fortive, driving better communications between companies and their team members. This is a major milestone for TeamSense, the joint studio, and for corporate innovation more broadly.
This is a “win-win” situation as TeamSense wouldn’t exist if not for Fortive’s unique market insights, connectivity to potential early customers, and seasoned executives who were ready to try something new. Conversely, it’s unlikely that Fortive would have been able to add a company like TeamSense to their portfolio if not for the joint innovation studio’s ability to build it so rapidly from scratch.
It’s been incredibly rewarding to engage with the entire Fortive team on TeamSense and the other two companies (Quivr and Genba) we have created together. We want to give an extra special kudos go to Sheila for leading the company from the start through this important milestone, Kirsten Paust, who leads the Innovation studio from the Fortive side and, Fortive CEO Jim Lico, for his vision, passion for innovation, and continued engagement on the overall process and, more specifically, TeamSense. Congratulations to you all!