Challenges and opportunities of the Venture Building model

Abstract: what follows complements a previous article describing the venture building model. Here we explore some challenges and opportunities this new types of organizations are experiencing.

Challenges

How can the venture builder find committed founders for an idea they were not involved in generating?

I want to comment on this point first, as the question is often raised. In my experience it’s just not true that you can’t find people whose purpose aligns with the ventures you’ve designed. If you build meaningful things, you will find talent that shares the same purpose.

It’s true that finding founders early is better for alignment and learning, but it’s far from mandatory. People are driven by many things, like being surrounded by great talent, learning, and developing products that resonate with their values or align with their future goals and objectives. Giving birth to these ideas is not a prerequisite for being passionate about them.

VC vs cofounder role

One of the big challenges for these new organizations is understanding where they position themselves in the VC vs cofounder spectrum.

If the venture builder leans towards the VC side, it will see itself as an investor that makes smarter bets by having more insight on the businesses, but will also be willing to let startups fail if necessary. Moreover, it’ll be less invested in the operation and in building strong methodologies.

If it leans towards the cofounder role, then it will reduce the risk of failure significantly but will increase the operational complexity as it will be much more interventionist in the different startups.

Finding the right talent

Finding great talent is always hard. If risk appetite is added to the mix, then the task becomes extremely difficult. Until this model proves itself, it won’t be easy to find the right people.

This also raises the question of whether success could attract the wrong type of character, with less passion for hard problems, less learning mindset, and less grit.

Opportunities

An unparalleled context to design new methodologies and tools

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Systematic design in new spaces will lead to better ways for coming up with innovative value propositions.

Until not long ago innovation was focused on predefined problems. Businesses would hire consulting firms to solve very specific challenges. Venture builders are doing something new, they are looking for great problems to solve. This role that IDEO calls the anthropologist — the one in charge of finding opportunity spaces — is still in its infancy, and venture builders are focused on figuring it out.

As mentioned before, venture builders have a unique perspective as they support multiple startups simultaneously in the scale-up phase. This will lead to a deeper understanding of growth, and the development of new tools.

Venture Builders are excellent academies

If I were looking for a context to maximize my learning, fifteen years ago I would have gone to a consulting firm, ten years ago I would have joined a startup, and today I would join a venture builder. The amount of learning that talent accumulates after spending two years in these contexts is unprecedented.

Written by

Venture builder. Passionate for products that create value. Loves being surrounded by good-hearted talented people.

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