Independent Project Franchising: Why Big Software Companies Should Nurture Innovation
August 26, 2026 - 8:07 am
Credit: Robert Brownstein
Summary
Large software companies often develop valuable internal tools but let them decline when priorities shift. Robert Brownstein suggests "independent project franchising": spin out successful internal projects as autonomous ventures with the parent company as a first customer and licensing partner.
The Issue
- CEOs' Concerns: PwC data shows 42% of CEOs fear they are not transforming fast enough, while Deloitte warns lean AI-native competitors are lowering the cost floor for software.
- Innovation's Lifespan: Innovation doesn't typically die from failed experiments but when ownership disappears.
- Initiative Thrash: Software engineers face cycles where projects are started, declared "done enough," and left with unfinished work and knowledge gaps.
The Proposal: Independent Project Franchising
- Freedom and Autonomy: Allow engineers closest to validated internal tools to spin them out as independent ventures.
- Anchor Customer: Parent companies can become first customers, providing stability and a guaranteed revenue stream.
- License and Partnership: Retain a license or minority interest, fostering continued collaboration and support.
- Benefits: Encourages innovation, reduces organizational risk, and fosters long-term value.
The Changing Software Landscape
- Faster and Cheaper Development: Deloitte's report highlights the shift in software creation, with lean AI-native challengers pressuring established companies.
- Urgent Need: As the software industry evolves, there's a growing need for durable structures to support promising work through changing priorities.