Eight in ten surveyed CEOs report new-business building as a top five priority despite recent heightened economic volatility.
That makes sense, as every dollar of revenue from new businesses generates almost twice the enterprise value versus every dollar of core business revenues. Still, organizations will need to more than double their rate of business building to achieve leaders’ expectations that 29 percent of revenue in 2027 will come from new businesses.
It’s easy to set an ambition to create a pipeline and portfolio of new ventures and investments that disrupt existing markets and create new ones. It’s easy to say “we need a growth engine”. The question really is – how?
For Christian Lindener, Co-Managing Partner of EMEA Delivery and Client Success at Mach49, the answer is clear. To succeed with corporate venture building, lean on one of the main resources you already have: your people. To be more precise, the bold entrepreneurial people that are part of your organization already.
Christian co-founded several successful startups, including Reflex Aerospace — the first venture-backed satellite manufacturer in Europe, a virtual reality startup that was acquired by booking.com, and Skyroads — an open digital operations platform for the urban air mobility market.
Before joining Mach49, Christian served as Head of Airbus Scale — Airbus’ central innovation unit — where he drove all of the company’s internal and external innovation activities. He also served as Managing Director of Wayra Germany — Telefónica’s CVC arm — where he oversaw the strategic direction of the organization and managed the selection of and investment in startups to be integrated into Telefónica’s portfolio.
Christian has created and advised over 20 incubator and accelerator programs across Germany, Switzerland, and Austria and holds board seats at several high-tech, high-growth startups across Europe. As Co-Founder and Director of TechFounders — a high-tech hardware accelerator based in Munich — he was responsible for the development of over 50 high-tech startups.
Based on his experience as a corporate innovation lead and startup founder, Christian believes in talent and teams first. Here's how to identify them and what capabilities they can bring to your organization, and how to make sure they succeed.
The Five Traits of a Corporate Venture Builder
Most corporate venture teams don’t include natural entrepreneurs and great investors who “see around corners”. Yet corporate venture builders by default have a unique profile as well. They’re not startup founders, and they have rarely identified or built new approaches and new technologies that drive organic growth from within.
Usually, they’re people that have had straightforward corporate jobs. Whilst their jobs may have fitted the regular career path, there’s something else that differentiates these venture builders.
The venture team is usually composed of people who think fresh. They’ve probably had trouble fitting in. They know that their company has maxed out on growth, and that the business is having a hard time transforming to be relevant in the future. They are not necessarily the people with great ideas – fundamentally, it’s about execution power.
Like the typical entrepreneur, they are always questioning. Can this be done better? Can this be done differently? Is there a way to do this more efficiently? For corporate venture building, you need people that question how things are and dare to change, despite the resistance that inevitably comes their way.
If you treat them well, if you give them the freedom, if you also give them space and financial support, they will actually put their ideas and efforts to work for the organization. Because if you don't have that space, that budget, that freedom, they will leave sooner and later, and may end up competing against you.
Christian has identified five capabilities or personality traits of people who are best suited to being a venture builder inside a corporation. They:
· Are doers. Corporate venture builders don’t necessarily come up with that disruptive idea, but they are great in execution.
· Are open minded to unlearn everything they’ve ever learned about processes, structures, and procedures.
· Understand deeply where your industry is going. What are the trends in the coming five to ten years? What are the threats?
· Are ready to push through. Perseverance and persistence are critical capabilities for entrepreneurs, but they’re even more important within large organizations. Venture builders are prepared to hit the same walls again and again and still have the energy to keep going.
· Are ready to leave. Venture builders know that any day could be their last day. If you’re not ready to be fired, you're just not pushing or thinking big enough.
Innovation Leaders: Create the Environment For Success
Innovation leaders play a crucial role in creating the environment for corporate venture builders to succeed. They need to manage the relationship with various stakeholders in the mothership, and as such create the support and secure the resources needed.
It’s their task to find and engage what Christian calls “growth advocates” across the organization.
Who in Legal will write the 1-page term sheet for the deal with a startup you need to accelerate the venture (bypassing the 40-page term sheet)? Who in Procurement will get a new vendor the startup needs to partner with on your approved list in a week vs. 90 days? Who in Marketing is going to challenge the traditional brand police and help the new venture develop momentum in the market? Who in HR is going to fast-track employees needed to build the new venture who don’t look like your typical employee?
When it comes to the corporate venture building team, they need to carefully manage the composition of the team and the balance of different profiles needed. For sure, it won’t work if 100% of the innovation team are of the entrepreneurial “questioning” profile as described above, as that can backfire pretty quickly both within the team and in collaboration with the mothership. Christian has seen that the optimal balance would be to welcome 3-4 troublemakers out of 10 team members, with those other 6-7 to be more process-oriented project managers.
Think of Tech Leads, who can evaluate feasibility, defining and building a product or service. A Product Lead who drives the vision and roadmap, experiments and looks at technical feasibility. A Go-to-market pro, who is able to develop competitive analysis, marketing, sales, pricing plans and engage customers. And a multitude of other subject matter experts.
It’s important to note that the different phases of the venture building process require different profiles. For example, in the incubation phase, one needs to follow a structural process. Once you go into acceleration, that typically requires a lot of experience in the domain and that may ask for other people.
Even though there’s no formal way to assess candidates, Christian has found it useful to carefully listen to internal conversations about the people that are complained a lot about- in the sense that they are persistent in challenging the status quo, which makes most corporate professionals uncomfortable.
A Career as Corporate Venture Builder?
The one thing that unites successful corporate venture builders is that they aren’t doing these roles to just advance their careers. They do these roles because of a deep sense of purpose to the problem they want to solve, and a loyalty to the organization for being able to step into solving it. They know the company can do better, and that it needs to transform. They risk even their careers for that goal.
One could ask – why even care about a role as corporate venture builder seeing the sheer impossible task of building and scaling new businesses from within, and delivering transformational change in the process?
Most corporate venture builders know that in big companies, you can create great things. With all the assets available, from expertise to marketing to distribution, no startup can match the potential of solving that problem the venture builder is so passionate about. That’s why serial venture builders keep doing this work.
Of course, if you are the corporate venture builder looking for a new role, it’s important to assess how serious a company is about their innovation strategy in general, and venture building in particular. Is leadership really on board, and do they put their money where their mouth is? Is there sufficient understanding about the environment and success factors for venture building, also when it comes to legal to HR matters, and is it being practiced?
If you can’t see evidence of the ambition being put into practice, chances are the company is just trying to look fancy but playing innovation theatre.