Target enlists entrepreneurs to help it think outside the Big Box

West Stringfellow was in Estonia on a break from the fast-paced dot-com world in which he worked when he got a call, asking if he would be interested in being part of an experiment at Target Corp.

David Law, a serial entrepreneur and designer, was getting restless in Maui after opening an organic restaurant on the North Shore a couple of years ago when he heard about the same opportunity. Greg Shewmaker was living in Hong Kong trying to drive innovation at Tesco, one of the world's largest retailers, when he did.

None had the typical résumé of a Target executive who climbed up through its ranks. But Target sold all three of them on joining its first entrepreneur-in-residence program, which launched in March.

"Literally, I've worked for myself for the last 20 years," said Law, who also founded Speck Products. "So this is the first time I've had a boss."

They haven't been brought in to solve a specific problem or challenge. Rather, their mission is more open-ended. It's to push Target to think broadly and find new opportunities at a time when brick-and-mortar retailers are facing unprecedented pressure and change.

The program is one of the latest ways that the retailer has been more aggressively courting outside ideas and talent after realizing that it was playing catch-up to the likes of Amazon and other online players.

"This is a major departure for Target and quite a dramatic one," said Carol Spieckerman, president of consulting firm newmarketbuilders. "The Target way was an insular way in the past."

Many other retailers, including Target, have been setting up technology centers to stay on top of the latest innovations. But this program is a way to test and incubate new ideas without having to invest a lot of resources at the outset.

Hard at work

The first fruits of their labor are already beginning to surface. Stringfellow connected Target to the highly regarded Techstars program, resulting in a retail start-up accelerator that will set up shop inside of Target's Minneapolis headquarters next year.

Meanwhile, Shewmaker has teamed up with MIT's open agriculture lab on a multiyear partnership around city farming to explore ways to grow better food more quickly using less water and soil in climate-controlled environments. In January, Target is also opening a lab in Cambridge, Mass., in collaboration with global design firm IDEO, where students from MIT, Harvard, and Rhode Island School of Design will work in teams to help envision the future of food ­technology.

"This allows us to tap into really smart people, but not invest in longtime permanent resources that may or may not be relevant," said Shewmaker.

The entrepreneurs are also playing around with such ideas as a brand incubator and are devising plans for new businesses that could be folded into Target or be spun off their own companies.

Stringfellow's work space is punctuated with stuffed animals and edible snacks of goldfish, as well as giant gold chains and a pile of loose change. Those, he explained, are the mascots of two of his projects that go by the code names "goldfish" and "bling."

"It will make sense in the future," he said, laughing. "I'm being cryptic because I can't talk about it yet."

While he's bursting with excitement when he talks about his role at Target, Stringfellow admits he wasn't initially that interested in the position. An alum of Amazon, PayPal, and other tech companies, he noted that Target is not known for being an innovator in technology.

But when he visited Target's headquarters, he was struck by the authenticity of the people he met and the strong desire to be more at the forefront. On top of that, Target is a brand that still has a lot of cache, he added.

"The pitch of 'Come here and do what you want to do' was pretty spectacular," he said. "The opportunities here are limitless. Retail is a war and it's not yet won. For us, it's a pretty rich playground for ideas and execution."

Since he arrived last year, Chief Executive Brian Cornell has been pushing Target to be more outwardly focused and forward thinking. Over the winter, he tapped Casey Carl as chief innovation and ­strategy officer.

Carl's innovation team is made up of about 45 designers, project managers, and engineers who are split between Target's San Francisco office and the 23rd floor of its City Center office along Nicollet Mall. They are the team behind the recently opened experimental store in San Francisco, called "Open House," that showcases how various connected devices can interact with one another.

"Target has a rich history of innovation," said Carl, pointing to its well-known designer collaborations, the Redcard and the Cartwheel shopping app.

But those innovations have been mostly closely tied to Target's existing business.

"The part that wasn't happening very broadly was the world beyond that, innovations that redefine what our portfolio should look like beyond core products and services," Carl said.

That's why he thought the entrepreneur-in-residence program, a model he saw in the venture capital industry, could be useful. The initiative is being treated as separate from the way the rest of Target works. The entrepreneurs, for example, aren't sitting in on regular staff meetings.

"It plays by its own set of rules in terms of how we look at funding and how we make decisions," Carl said. "The three have direct access to me. We talk several times a week."

The game plan

Each entrepreneur has been given an initial budget to flesh out their projects and then Target will decide later whether to invest further in them. The time frame for their appointments is also somewhat vague, but the hope is that they will build out and launch their ideas, then lead them as projects while new entrepreneurs in residence take place behind them.

On Shewmaker's first day, he set up a lab in southern Florida with a company working on some "pretty crazy" food technology.

"I think Target probably thought right away this was a bad hire," he said.

But he gives Target high marks for going along on the ride without knowing quite where it may lead. That sort of speculative exploration doesn't go over well at a lot of big companies, he added.

"Target is just rolling with the punches," he said. "They don't always get it, and they don't always understand where we're going, but they say, 'Hey, we're behind you and we trust it's going somewhere.' "

How Target will use the research being conducted at MIT's open agriculture lab is also still unclear. Caleb Harper, the lab's director, and a team of researchers are looking at how to build recipes for the optimal conditions to grow the best-tasting produce possible in climate-controlled boxes that range in size from an old tube TV to a warehouse. It's something that corporate cafeterias, restaurants or even big box stores could use to grow produce on site.

"It doesn't matter if it's in Antarctica or in the Sahara," Harper said.

While many companies often want to keep such innovations proprietary, what is even more unusual about ­Target's interest in the MIT project is that a big emphasis is on sharing the insights and know-how beyond the company. "It's about democratizing the information," said Harper.

As they go about their work, Target's hope is also that these entrepreneurs will rub off on the rest of the organization, giving others a road map in how to see ideas through from beginning to end — and even in how to be ruthless in deciding not to pursue some paths.

"There's a lot we can learn from these seasoned entrepreneurs by modeling best practices," Carl said. "The killing of an idea is a great thing … because you're learning and pivoting as fast as possible with as little investment as possible."

There have already been plenty of ideas that have been left by the wayside. One of their first ideas, for example, was to figure out a way to re-imagine payday loans into a more ethical, socially responsible system.

"We're not going down that path, but essentially there are no boundaries," Law said. "We'll figure it out if we go off the edge — like oops, we shouldn't take it that far."

Kavita Kumar • 612-673-4113