Written by Per Nystedt
June 7, 2022

Conversations with an AI part #1: Is corporate venturing for you?

We recently approached an AI to talk about some rather complex topics such as corporate innovation and venture building, and were surprised by the depth and accuracy in the responses we got. In fact, it was so advanced that it felt like talking to one of our own team members! We decided to call the AI Alice and share our conversation about corporate venture building here below.

In the coming months, you get to follow along on a series of conversations on the topics of corporate venturing and artificial intelligence between Alice and the people of Desifer.

A conversation between the AI Alice and our colleague Per

Per: Hi Alice, nice to meet you! How are you doing today?

Alice: Hi Per, great to talk to you! I’m well, thanks.

Per: Great to hear. I’m happy I got this opportunity to talk to you. Could you please tell me a bit about yourself?

Alice: Sure, I’m Alice. I’m an innovation consultant. I work with startups and corporates helping them establish new ventures either by starting them from scratch or investing in them. As part of my work, I frequently interact with founders, general managers, investors, as well as innovation managers in both startups and corporations. In my free time, I write for Forbes, and speak at industry events.

Per: Interesting. I believe you can come with valuable insights into some stuff I’d like to discuss with you today. But perhaps I should introduce myself first. I work as Venture Lead at Desifer – a corporate venture building firm based in Stockholm that helps corporations with their innovation efforts. Why would you say that it is important for large firms to invest in innovation?

Alice: Large firms face stiff competition from startups and technology. This competition continues to get tougher as startups get larger, while incumbents get increasingly challenged to innovate and adapt. It’s not so much that corporations are protective of their business model, as they can be slow to innovate and change, and their core business can be threatened by new entrants with better, cheaper, more efficient technology.

Per: Okay, and how can corporations become faster at innovating and avoiding disruption?

Alice: Through corporate venturing, corporations can proactively adapt their product portfolio, business model, and strategic direction to developments in the market. This is done by creating and launching new independent businesses, or acquiring, investing in, or partnering with startups and new ventures.

Per: Please elaborate, what does corporate venturing mean?

Alice: Corporate venturing is the process of creating and launching new independent businesses, or acquiring, investing in, or partnering with startups and new ventures, from within or by reaching out to external ventures. This is the action oriented platform where ideas, generated internally or with partners, are developed and turned into an external business or project. In the context of innovation, this external aspect of corporate venturing comes with clear advantages over internal innovation projects.

Per: Why are the advantages of adopting an external mindset?

Alice: With an internal mindset, corporations typically innovate based on their own resources, assets, and processes. They define ideas internally, and when ready, adapt them to market. However, external ventures have a distinct advantage as they are more in touch with market realities and developments. Through their external presence and adaptive nature, they are able to explore a wider scope of innovation opportunities, which an internal venture is unable to do. The external nature of ventures also enables corporations to maintain a constant stream of market feedback that enables more immediate adaptation.

Per: Interesting… But why is it better to launch an innovation as an independent venture as opposed to just adding a new product or changing the business model?

Alice: Simply due to how ventures operate. They have different success criteria and metrics than traditional corporations, and as a result, make decisions differently. They aim to scale, and therefore need to make disproportionately more decisions than a corporation would. Launching an independent venture helps corporations remain agile. It can allow them to adapt their product portfolio, business model, or strategic direction more easily, based on market developments.

Per: Fair enough. Would you say that corporate venture building is for everyone? Are there any firms that are better suited to innovate this way?

Alice: Absolutely, some corporations are better suited for venture building than others, all depending on their size, industry, resources, and appetite for risk. The venture building process requires process changes, in terms of how innovation is done, as well as how teams are structured and incentivized. A corporate venturing program needs to start small, and be implemented gradually. It should be led by an experienced executive who is committed to running a long-term program, and is capable and willing to integrate the necessary support functions.

Per: Let’s say I have a client, a large, mature corporation with a lot of resources and need to innovate. They have heard about this new method of corporate venture building but are still a bit unsure if it’s the right path for them. What would you say to convince them that this indeed is what they should do?

Alice: First, I would say, corporate venture building is for everyone. It’s not only suited for big companies. Second, the benefits of corporate venturing are well-documented, and successful case studies abound. Numerous research reports highlight how corporations can innovate faster, close the innovation gap, create significant shareholder value, and significantly improve their risk profile, by proactively adapting their business model, product portfolio, and strategic direction to changes in the market.

Per: Okay, thank you Alice. I think that rounds up the questions I had for you today, so I’ll let you get back to your work. I hope to speak with you soon again and continue our discussion on corporate venture building.

Continued learnings from Alice

This is the first of a series of talks we will be having with the AI Alice. Stay tuned as we continue our conversations about corporate venturing and dig deeper into the fascinating world of artificial intelligence.

To produce the above conversation, we used the platform and technology developed by AI21 Studio™. The prompt used to give the language model the right context was based on content that Desifer has created and owns. A few iterations to find the optimal level of creativity and personality for the AI were rendered, but other than that, there has been no modifications to the AI’s answers.

Written by Per Nystedt
June 7, 2022