We use the term “Venture Builder” quite often. No surprise, Desifer is a Venture Builder and we truly believe this is the future of how new products and businesses will be created, developed and grown. But what does the term really mean?
Our definition of Venture Building
We define it as the activity of purposefully and methodically creating a new business initiative.
Simply put, it’s about starting with an idea, transforming it into a fast growing product, and most importantly, business. To achieve this, there’s a need for a holistic, hypothesis and experiment driven approach to validate customer desirability for what you aim to provide, the feasibility of realising it as well as the commercial viability. In the process, you need to lead and integrate competencies like highly experienced strategists, software engineers, product leaders, designers, data scientists and growth experts.
Our primary focus is Corporate Venture Building (CVB)
Although we have a large network of startups which we actively engage with, our primary clients are big corporations. We sometimes refer to the process of building new business together with our clients as corporate venture building. In our view, this needs to be done in a way where new ventures are more or less independent from the influence of the mother organisation, to allow for speedy and efficient experimentation and customer validation.
Sometimes this means forming and establishing a new legal entity, a startup company, but at other times the venture model can be a new business unit or, perhaps initially, a “skunkworks project” isolated from the regular organisation. Selecting the right venture model is an important success factor, as described in our paper “New Corporate Ventures: Six Success Factors”.
The relationship to corporate innovation
Corporate venture building is often part of an innovation strategy for a corporation where venture capital investments and partnerships are other important parts. The venture building arm becomes the action oriented platform where ideas, generated internally or with partners, are developed and turned into business.
The ‘unfair’ advantage of corporate venture building
In the context of innovation, venturing comes with clear advantages over internal projects. These advantages increase the chance of success and stem from combining corporate assets and advantages with the typical strengths of a start-up:
The startup model excels at searching for new business opportunities and adapting to change. With dedicated and independent cross functional teams, modern technology architectures and a lean focus on things that matter, startups can rapidly develop new products and launch them on the market months or even years ahead of competition with slower approaches. By being independent, they can focus to find ideas that will challenge and disrupt existing solutions in their industry.
Starting from a clean slate also means they have less to lose, increasing their appetite for risk. The higher risk profile, often together with equity incentives, enables them to attract talent with entrepreneurial traits.
Corporations, on the other hand, are built to scale. Corporate legacy’s other name: assets.
These assets include capital, existing and large customer base with proprietary data about behavior, existing purchase patterns as well as in-depth industry knowledge. Brand trust that has taken decades, if not centuries to build is another important asset.
Using the venture model to combine the strengths of these worlds will vastly improve the chance of success. That’s really the ‘unfair’ advantage of the corporate venture model.
Done right, this may give you up to 60-fold increase in the chance of creating a viable large-scale new business, defined as achieving over $100 million in revenue, when compared to an independent startup. This is according to Chris Zook of Bain & Company, read more in Why Corporate Venture Building Should be Part of your Innovation Strategy in 2021 (Hint: you can beat startups 60 times over)
What really sets us apart
We work hands on to establish new business, whether this is in the form of a tech startup or using some other venture model. Our experience and understanding of how to do this combined with a network of suitable resources are what really sets us apart (from the usual design, management, innovation and it consultancies corporates use):
Experience and network
Our experience comes from the 20+ ventures we have accelerated and built in the last 3 years. Our network comes from our presence in the startup ecosystem where we run the Silicon Valley Based early stage startup accelerator Founder Institute, and our own Desifer Growth Lab focused on scale-ups. We use this network to find entrepreneurial talent that complements our own team.
Design, technical and growth expertise
When establishing a venture team, we typically use a mix of resources from our client, our team and our network. This team lives to achieve business impact rather strategy, product or design perfection:
- Design expertise – designers with broad and deep experience from digital product design with business outcome, most often growth, in mind.
- Technical expertise – skilled developers who have experience from the startup environment and can deliver quickly with high quality.
- Growth expertise – pragmatic and experiment driven individual using a much larger tool set than the usual marketeer. If you are to build a business, you need to actually acquire customers…
We love to share risk to get “everybody in the same boat” and we do this through a range of collaborative options, from equity deals to performance pay schemes and everything in between.
So, are you ready to build your first corporate venture?
Contact me for more information firstname.lastname@example.org