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Think of Brickhouse as a distribution channel for nimble ideas. As a large operating company (and Internet giant), Yahoo! is geared to manage monster products like Mail, Messenger, and the yahoo.com front page. Managing hundreds of millions of registered users poses a unique set of operating criteria, it's a very different challenge to focus on smaller ideas.

And yet, there is an extraordinary amount of innovation being generated across Yahoo!. In less than two years, Yahoo!'s Hack program alone has generated over 1,400 ideas in various stages of completion. In addition, Yahoo has an internal suggestion board with over 1,600 concepts, and 250 or so ideas have been submitted directly to Brickhouse over the last six months. This doesn’t take into account new technologies and products constantly being churned out in the business units. So, there's no shortage of good ideas.

To manage this abundance, Brickhouse operates like a venture fund. There’s an investment thesis, deal flow to manage, and investment criteria to apply -- all within a portfolio framework. People pitch us ideas; we pick the exciting ones and flesh them out with the "founder." We brainstorm to overcome issues and mitigate risks, and our output is a summary startup business plan. Then, on a quarterly basis, we gather the best ideas and present them to our Board of Advisors, which includes leaders from Yahoo!'s executive management team.

We convene the Board (getting their calendars lined up is a whole other challenge), present the ideas, and get guidance on which are most interesting. Then we go execute (the easy part for me).

In a traditional venture model, a newly backed venture goes and hires a great team. At Brickhouse, we have something better: a resident team of fabulous, experienced developers. Team members sign on for the ideas they find most exciting: once an idea gets the green light, we can step on the gas almost instantly. Today we handle two or three projects in parallel.

The Brickhouse venture model evolved as a way to tackle Yahoo's idea backlog. We wanted to find the shiniest needles in that haystack. Our team divvied up the ideas into lots and graded each against the following filtering criteria:

• how big is it
• how close is it to Yahoo!'s strategy
• how easy is it to build
• how easy would it be to gain market traction

This quick and dirty approach yielded the top 50-60 ideas fairly rapidly, and we then went into analysis mode, to craft and define the hybrid venture model outlined above. Simultaneously, we've spent a torrid half-year assembling the team, launching the facility, drawing on whiteboards, playing with nerf guns, and getting started on our first products. Stay tuned, because our first shiny new things will launch in the coming weeks, as 2007 winds down.

(Photo from Scott Beale / Laughing Squid)

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