LAS VEGAS—Chaos rarely seen was on display in the halls of The Venetian's convention center as CES 2018 hit its stride on Tuesday. A sea of blazers, heels and green lanyards filled the escalators, clogged the elevators and bogged down the wifi.
Amid the noise, I spent some time with Kevin Kessel, vice president of investor relations at Flex. A provider of electronics manufacturing services, or "EMS"—basically, a supply chain outsourcing company—Flex operates as a quasi-VC as part of an initiative to move up the value chain dubbed "Sketch-to-Scale," which works with entrepreneurs and innovators to design, create, distribute and scale their products.
Flex's due diligence process when considering taking on a project will feel very familiar to early-stage VC investors, including an intimate look at management, a review of intellectual property and an analysis of the intended marketplace. Flex also manages incubator programs similar to PCH's Highway 1. And in some cases, for very young companies tight on cash, Flex will trade development and manufacturing credit for equity shares.
Founded under the name Flextronics in California in the 1960s, Flex reorganized out of Singapore and listed on the NASDAQ in the 1990s. An early focus on manufacturing electronics has since branched out into other areas, including plastics and textiles, giving Flex uniquely broad exposure to many of the areas of interest here at CES—everything from more-durable tires for Ofo's latest bike to autonomous vehicle technology.
Kessel is particularly proud of Flex's work with Nike, pointing to multiple pairs of self-lacing HyperAdapt sneakers conference goers were trying on—shoes that are a product of a partnership between the companies designed to leverage Flex's technical know-how to help Nike lower costs via automation.
"Many of Nike's suppliers dated back to when [founder] Phil Knight started the company, local Chinese sewing shops with names you've never heard of," Kessel said. "When asked to make more complex and advanced shoes, they responded the old fashioned way by hiring more workers."
But with China's labor marketing tightening, that strategy doesn't work anymore. Thus, the focus on automation. As part of its growing interest in startups, Flex hopes to use its "Sketch-to-Scale" initiative to provide that same bring-to-market prowess enjoyed by large multinationals to entrepreneurs.