It is always difficult to develop an early idea, earn revenues, and exit. For large companies looking to create new revenue streams, this struggle is especially true when they fall in love with that new idea and manage (and fund) it like a traditional project. There’s an alternative path, though. After 15 years of helping big companies design, develop, and launch new growth initiatives, we’ve found that those companies who fall in love with customer problems and fund venture teams find success much faster (and more often).
The best way to manage net new innovation is through a Venture: a temporary organization formed to search for a scalable business model – meaning customers love it, the business can deliver it, and the value exchange is a win-win for all parties.
The challenge is the existing org practices that have allowed the core business to hum along effectively are oftentimes the very things that will prevent your venture from taking off. Use the table below to take a critical look at how you are approaching growth challenges and see where you may be able to move towards the right.
Project vs Venture
You can use the table above to create a shared vision at the outset and then to revisit as necessary. It sounds easy enough, but for big corporations who have optimized tried-and-true operational practices (and have been rewarded for it) this can feel extremely uncomfortable. It takes continual courage and adaptability on the part of the leadership team and the venture team to adopt and sustain a venture approach, so be prepared to put effort towards building the practice.
In addition to the table above, use the following principles to align (and realign) all your stakeholders towards a shared venture vision:
The Five Venture Principles
- Ideas are nothing. Your first idea should evolve as you test and learn.
- Technology is nothing, unless that technology can be applied to a specific customer problem in a new way that creates more value.
- Customer problems will anchor the entire effort. Make sure you’ve picked the right one to solve and build your endeavor around it.
- Venture teams, if empowered and anchored on a customer problem, can and will deliver your next big thing.
- The unit of progress is market-validated learning. Make your assumptions explicit and validate (or invalidate) them in-market with customers.
One way I like to use the above assets is at the start of new initiatives, display them in the room and ask the team three questions:
- Which one of these will be the hardest for us to commit to?
- How will we know when we are off track?
- What will we do to get back on track?
Identifying the tripwires that will stand in your way from solving the customer problem and getting market traction can empower the entire team to take responsibility for adopting and maintaining the venture approach.
The Focus Question
Finally, just like in a start-up, when you are building a venture, every ounce of resources (time, effort, and money) go towards getting market traction. Build this habit by periodically asking yourself “is what I’m doing right now the most important thing I can be doing to build this new business?” If the answer is no, and it often will be, reorient yourself and your team to solving the customer problem (and then monetizing it).
Doing big, new things is hard, but using the above to move towards a venture model will help you innovate more quickly and reliably. We’re rooting for you!