- Goldman Sachs has launched a new incubator program, according to a memo seen by Business Insider.
- The point of the program is to keep good ideas within the firm by providing resources to help people turn out-of-the-box ideas into real businesses.
On Wall Street, they say a company’s most valuable asset walks out the door at the end of the work day.
So how does a large bank like Goldman Sachs hold on to its people who want to swap their suit jacket for a Silicon Valley hoodie? It launches an incubator.
That’s exactly what Goldman has done, according to a memo seen by Business Insider. In an internal memo, chief executive Lloyd Blankfein and president David Solomon announced GS Accelerate, a new incubator that’ll provide employees with capital to help turn out-of-the-box ideas into to real businesses within the bank.
Goldman’s chief strategy officer Stephanie Cohen will work with leaders across the bank to select teams for the incubator, the memo said.
“By applying to GS Accelerate, you will have an opportunity to submit ideas that can deliver best-in-class solutions for our clients, take Goldman Sachs into new business areas, manage risk and tackle inefficiencies in our operations,” the memo said.
Of course, this isn’t just a human capital play. Keeping good ideas within the firm could translate into new businesses that drive growth, cut costs, or generate returns.
Ideally, those business will experience the same amount of success as Goldman’s retail lending arm Marcus, launched in 2016, which was able to originate more than $1 billion in loans quicker than any of the bank’s small fintech rivals.
“If we’re creative, imaginative and learn from what did and didn’t work, GS Accelerate can become a powerful engine to bring important ideas to life and continue our long tradition of pioneering innovations that eventually become standard in our industry,” the memo said.
How will it work?
At a firm like Goldman Sachs, it can be hard for new ideas to make their way through the red-tape, especially if it’s an idea that’s tangential to the main business. GS Accelerate attempts to address that.
For instance, let’s say a FICC trader has a new idea for the bank’s burgeoning retail business. Typically, that would be difficult – if not impossible – to get through the traditional chains of command. Through GS Accelerate, however, that trader could submit their idea online, which would then be reviewed by business leaders at the firm.
Ultimately, that idea could be picked alongside others for the program, which provides the necessary resources and access to mentors. At this point, it’s not clear how many teams will go through the incubator.