Collaboration between companies startups through well-established models, these are known as (corporate VenturingCV) generates mutual benefits like innovation, commercial potential, value generation, stability, and scalability. Today, more companies are deciding to find formal ways of collaborating to help accelerate digital transformation, retain existing clients, and attract new customers with different products and services. It is not an easy path, so it is essential to consider these 5 points before launching your venture—corporate Venturing initiative.
1.It’s more than the CEO.
It is crucial to consider senior management when launching a collaboration program with startups. But, it’s also essential that you have a local sponsor. This will help streamline processes, encourage open discussions, and motivate the teams that will be benefited in the long term.
The key to bringing onboard middle managers and area heads is to execute the strategy. That means finding the right balance between the day-to-day work and the plans for open innovation areas or CV. It requires a lot of cultural preparation and commitment on the part of the heads. They will undoubtedly be focused on the results and the operations of the business.
2.The Core Business: Real Knowledge
The core of a business is not what it does well. Instead, it’s why you have customers. For example, Disney’s core value is being able to entertain people through entertaining stories. This is how it built its empire, including animation studios, film channels, sports channels, and theme parks.
It is essential to understand the potential opportunities within the business’ core. This means identifying and analyzing why customers choose one company to the next and the Job to be done. If the nature of the business is clearly defined, it will be easier for the entire company to seek out external innovations from startups to enhance, nurture, and expand it.
3.The company may not always know its goals.
These business areas have a clear vision of what they want: lower prices, faster workflows, and more efficient customers. A Corporate Venturing site that focuses on solving these problems is essentially securing its future. Startups and technologies enable the business to take the following steps and hide behind the challenges posed by the area, management, or company.
Instead of answering “With which solution can the workers be more productive?” the question to the CV unit should be “What is the job of this area shortly?” and “How will it be accomplished that job quicker?”. ” This is the difference between a Corporate Venturing area and a purchasing unit. It is essential not to assume that all the requests of a company are what they need.
4. It is a game with risks and returns and should therefore be treated as such
The survival and transformation of a company depend on a well-designed CV program. The program is not without risks – what if it doesn’t work out? How do you make sure that your program produces returns?
It is essential to diversify financial investments so that the budget doesn’t get compromised. It is crucial to think of portfolio logic. Keep it healthy and diversified. Successful companies have a mixture of Corporate Venturing methods (for example, CVC, Challenges, and Venture building), which allow them to explore the future. In contrast, others generate short- or medium-term returns. The company’s environment, culture, goals, and industry will all play a role in determining the right match.
5.It is a relationship that works together and not one-to-one.
The biggest mistake companies make is that by publicly making their intentions, they will attract thousands upon thousands of extraordinary entrepreneurs who are eager to collaborate and choose who to work with. In reality, many companies are competing for exceptional startup partners.
A clear and distinct value proposition for the CV program is essential. However, the company should not choose startups. Good companies also select startups. Because they are so focused on their growth and development, participating in a CV program could often have a less significant impact than following their roadmap.
It’s not easy to plan and implement a Corporate venturing program or define the mix of collaboration mechanisms. There are allies, such as Wayra, Telefonica Movistar’s corporate innovation arm. Each year, more companies are willing to go the extra mile, enrich local and regional economies, and create better opportunities for all parties, opening the doors to better startups.