The Pointless Innovation Hub. And Why Big Companies Keep Building Them Anyway.

Picture this: Your corporation just opened an innovation hub in Silicon Valley. You got the coffee machines right, hung some string lights, hired someone with a hoodie to run it. Now you're going to capture the magic of startup culture and bring it back to your organization.

Except here's what actually happens: The hub becomes a small island disconnected from where actual business gets done. It generates reports that nobody reads. It networks with startups that nobody at headquarters cares about. And after eighteen months, it quietly shrinks or disappears because "we just couldn't get the traction we needed."

The problem isn't the hub. It's why you built it.

Most corporations that open innovation hubs are asking the wrong question. They're asking: "How do we get access to startup ideas and talent?" When the real question should be: "What specific business problem are we trying to solve, and how does a physical presence in this ecosystem help us solve it?"

I recently talked with Luca Seletto, who runs Enel's global network of innovation hubs. And here's what's fascinating: Enel doesn't run their hubs the way everyone else does. Which is precisely why theirs actually work.

The Most Expensive Mistake: Thinking A Hub Is An Investment Vehicle

Here's the conventional corporate wisdom: Open an innovation hub, get exposure to startups, make venture investments in promising technologies, eventually some of them exit, you get a return on capital.

It's a logical framework. It's also almost entirely backwards.

Luca and the Enel team made a deliberate choice that surprised most people in their industry: Enel doesn't do venture capital. They don't invest in startups. They don't take equity stakes or board seats or any of that.

And this is precisely why other corporations are jealous of their network.

Here's the counterintuitive part: By not being a VC, Enel became more valuable to the startups they work with. Because the relationship isn't about extracting returns—it's about solving real business problems.

Think about it from a startup's perspective. You've got your VCs, they're pushing for hypergrowth and a big exit. Now you've got a multinational energy company that wants to partner. If that company starts talking equity, you immediately wonder: Are they trying to own part of us? Are they trying to control us? Are they going to prevent me from working with their competitors?

But if they say: "We don't want equity. We don't want ownership. Here's what we can offer: access to our customer base, our distribution channels, our infrastructure, our operational expertise"—that's a completely different proposition. That's value without strings.

So startups actually want to work with Enel. They're not trying to stay away. They're trying to get in the door. And Enel's startups don't have the friction that venture-backed hub models usually have.

The Hub Is Not The Thing. The Hub Is The Medium.

This is where most companies completely miss the point. They open a hub and think the hub is the innovation. The hub is real estate. It's an address. The innovation is something else entirely.

Luca's role at Enel's Boston hub is instructive. He's not running an office. He's running a network. His job is to know the local ecosystem—the startups, the policymakers, the research institutions, the other corporations—and then serve as a translator between what those organizations are trying to do and what Enel's business divisions actually need.

The hubs themselves are lean. One or two people, usually. They're not trying to be self-contained innovation engines. They're trying to be connectors. Luca knows what's happening in the Boston energy tech ecosystem. He identifies promising startups. He understands which divisions at Enel could benefit from their work. He makes the introduction.

The actual business relationship then gets managed at the headquarters level, at the operational level, at the engineering level—wherever it needs to happen. The hub's job is to identify the possibility and make the connection. Everything else is just execution.

This is radically different from the hub model most corporations use, where the hub is supposed to generate ideas, incubate projects, and solve problems. That's too much friction, too many layers, and it fails because hubs don't have the authority or resources to actually implement anything at scale.

The Geographic Arbitrage of Trust

There's something subtle happening in Enel's approach that most corporations don't think about: They've built physical presence in places where it matters.

Enel operates in 30 countries and has hubs in seven different locations—Israel, Spain, Italy, Russia, Chile, Brazil, and the US. Not randomly. These are places where either important technology is being developed (Boston, Tel Aviv) or important markets exist (Brazil, Russia).

But here's the non-obvious part: The hubs exist because of something that can't be replicated digitally—trust. You can read a pitch deck remotely. But you can't build the kind of relationship you need to move a partnership forward without being in the same room with people, showing up consistently, understanding the local context.

Luca describes it as relationship management. He's building relationships with founders, with other investors, with university researchers, with policy makers. These relationships exist because he's in those places, showing up over time, consistently.

In a world obsessed with remote work and digital efficiency, this feels like an inefficient relic of the past. But it isn't. There's something about trusting someone to represent your interests in a different geography that requires presence and consistency.

The startup founder thinking: "Can I trust this corporate person to actually understand my problem and connect me with the right people at Enel?" That trust is built over coffee meetings and introductions that actually pay off and follow-ups when things don't work.

Digital communication is not a substitute for this. It's a replacement for distance, not for trust.

The Scaling Problem Nobody Wants To Admit

Here's what breaks most innovation hub models: They try to scale too fast, in too many directions, with too many people.

Enel's approach is the opposite. They've kept the hubs intentionally small. They've maintained a simple model: The hub identifies technologies and solutions that could work for Enel's business. They run pilots. If pilots work, they deploy to actual infrastructure and operations.

This seems obvious. But most corporations can't do this because they've embedded too many people in their hubs, created too many competing priorities, or tried to use the hub as a place where innovation happens rather than as a place where opportunities are identified.

The result: Massive overhead, slow decision-making, and a system that's bigger than the results it produces.

Luca explains it plainly: They don't try to make the hubs the center of everything. The hubs are connective tissue. The actual work happens in the business divisions, in the operations teams, with real people whose job depends on making things work.

This is actually liberating. It means the hub can stay lean and focused. It means clear accountability. It means decisions can be made by people who actually understand the business context.

Why This Matters And What You Actually Do

If you're a large organization thinking about innovation hubs, here's what matters:

First, be clear about what problem you're trying to solve. Are you trying to access new technologies? Find new business partners? Understand emerging markets? Build a different corporate culture? Each answer leads to a different hub model.

Second, keep it lean. Don't staff your hubs like they're supposed to be innovation factories. Staff them like they're supposed to be connectors. Three people max, ideally. Their job is to understand the ecosystem and translate between external innovation and internal business needs.

Third, align the hub with business divisions that can actually implement. The hub doesn't implement anything. It identifies opportunities and brings people together. The business divisions do the actual work.

Fourth, build relationships, not just transactions. This takes time. It can't be digitized. It requires physical presence and consistency. If you're not willing to do this, don't build a hub.

Fifth, measure connection, not innovation. Don't measure ideas generated or startups met. Measure successful collaborations. Measure how many pilot projects have moved to real deployment. Measure whether startups want to keep working with you. Measure whether your internal divisions are using the hub to solve real problems.

The Uncomfortable Truth

Building an innovation hub is a way of admitting that your internal innovation process isn't working. That you can't access the kind of thinking and technology and speed that you need from within your own organization.

That's okay. But be honest about it. Because once you admit it, your whole approach to the hub changes.

You're not building a branding exercise. You're not building a talent pipeline. You're not building a strategic portfolio of startup investments.

You're building a bridge between where you are and where you need to be. And bridges work best when they're simple, consistent, and maintained by people who actually understand what's on both sides.

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Want the Full Story?

If you want to hear exactly how Enel built their global network of innovation hubs, how they manage the tension between maintaining a unified strategy while operating in totally different markets, and why they made the counterintuitive choice not to become venture capitalists, listen to Yaniv Corem's full conversation with Luca Seletto on The School of Innovation podcast.

It's a masterclass in how large organizations actually move when they're serious about staying relevant.

Because here's the thing about innovation hubs: Most of them fail because they're trying to be something they're not. The ones that work? They know exactly what they are, and they stick to it relentlessly.