The Corporate Startup Canvas

Before the Corporate Startup Lab was a lab, it was a small group of people meeting regularly to talk about how to do innovation in large organizations. Our interests in corporate entrepreneurship all had different origins, and our reasons for being in the room were different too, but we all converged on a pair of closely related questions:

How are corporate startups similar to, and different from, traditional startups?
How SHOULD corporate startups be similar to, and different from, traditional startups?

So we started talking to two groups of people, corporate entrepreneurs and managers trying to encourage corporate entrepreneurship. Over time, we spoke with hundreds of corporate innovators across dozens of organizations. But it only took a handful of conversations to realize a fundamental truth about corporate entrepreneurship: an idea than can turn into a good business won’t necessarily be able to turn into a good business for the company. Said another way, traditional entrepreneurs start from scratch and are free to build any kind of business they want, while corporate entrepreneurs have to build a business that fits within their corporation.

As we started to collect more similarities and differences, our core questions expanded to include a focus on methods:

What tools that help traditional entrepreneurs can help corporate entrepreneurs?
What tools are missing from a corporate entrepreneur’s toolkit?

Looking at what we had learned through the lens of an entrepreneur’s toolkit, we set out to address the need we had identified. All entrepreneurs have tools like the Business Model Canvas to help them think through the different parts of a business idea. Corporate entrepreneurs, however, have to answer an additional set of questions as they investigate the viability of their idea.

We developed the Corporate Startup Canvas as the first of our tools. It’s designed to walk a corporate entrepreneurs through a series of questions to help determine if their business ideas are good fits and what that fit might look like. Similar to other canvas-type tools, it’s OK and encouraged to answer with best guesses and indicate your degree of certainty (one popular method for doing so is using color-coded sticky notes: green ideas are known answers; yellow paper indicates there’s some evidence but more validation is required; while red notes or ink denotes a pure guess). As ideas evolve, and entrepreneurs interact with different parts of their organizations in developing those ideas, the canvas evolves as well.

The Corporate Startup Canvas can be used as a stand-alone tool, or it can be used in conjunction with the Business Model Canvas and other idea development tools. In fact, the first box of the Corporate Startup Canvas asks the user (i.e., you):

What is the idea?

The short version of your answer here is your elevator pitch. The long version of your answer here is a full Business Model Canvas. With this, you can think of the Corporate Startup Canvas as either a companion canvas or a wrap-around canvas for the Business Model Canvas.

The next box asks, Why us?

It’s important to answer why your organization is the right one to work on this. What advantage does your organization bring to the table that a traditional startup does not? For all the difficulties in being an entrepreneur in a large organization, there are some big advantages as well, and the best corporate startups leverage one or more of those advantages, ideally ones not many (or any) other organizations have. General advantages usually take the form of resources like budget, talent, and marketing channels. Other corporate startups leverage specific resources like existing partnerships and relationships, intellectual property owned by the company, or specific physical assets the company has that would be difficult for a traditional startup to access.

While answering “why us,” it’s also helpful to think “why NOT us?” Going in with your eyes open to the limitations and challenges is absolutely essential. In the worst case scenario for your idea, honestly grappling with these questions may even show you that your organization would not be a good place to start your business. Whatever the ultimately conclusion, it’s important to acknowledge the organizational context in which you’re trying to create your idea.

Where in the market would this idea live? Where in the company would this idea live?

These boxes are two versions of the same question, one looking outward and one looking inward.

For the outward-looking question, it’s important to think about how your idea would fit into a marketplace and think about how your potential customers and existing company already interact with that market. If your idea is for a brand new product category, how is the problem it solves being solved now? You might be leading your company into a battle with new competitors. If your idea is a “better mousetrap” kind of business, how does your company already operate in the market and how will it change if you’re successful?

The inward-looking version of the question is equally important. If your idea becomes a successful business, what does that look like inside your company? Some companies have a one-size-fits-all answer to commercializing new ideas, while on the other end of the spectrum, some companies will create corporate infrastructure as needed for each new business. You have to think about what would be best for your business and also the company, while paying attention to the constraints imposed by your organization. It’s terrible when good ideas fail because of internal politics or lack of proper organizational structure, and thinking through these issues as you go can help your business avoid that fate.

Why now?

Even if you have a good idea, that doesn’t make it a good idea right now. Traditional entrepreneurs have to answer a less demanding version of this question: is their idea doable at the moment, and does the market want it? Corporate entrepreneurs have to answer that too, but also in the context of their companies. Why is this the right time for your company to start this idea? There are many organizational factors which could make today a better or worse time to take a chance on your new business (for example, the middle of a reorganization might be a bad time, but shortly after the CEO makes your division a budget priority might be a great time).

Trends also play an important role in timing. When Netflix had the idea to switch from mailing DVDs to streaming content, they had to wait for internet speeds to catch up. Uber only works because people carry around internet-connected computers in their pockets. Portable CD players had a short life as downloads and rewritable digital memory got rapidly more accessible. These examples are about technology trends, but cultural, economic, and environmental trends can be equally important (if harder to predict).

When answering “Why now,” it’s often helpful to look forward and backward in time as best you can. Why hasn’t your idea been attempted already? What’s the history of companies, especially your company, trying to solve the same problem? What are the costs, and what are the advantages, to waiting?

What’s the business case?

This is one area where a corporate entrepreneur can have more freedom than a traditional entrepreneur. A traditional startup’s business case almost always has to boil down to profit. But inside a larger enterprise, a business that barely breaks even can be a huge win if there are spillover effects to other lines of business. We’ve talked to some companies which consider the main lines of business to be built-in customers for new businesses — if the corporate startup’s product can help the main business cut costs, improve productivity, or better engage with customers, it can be a worthwhile endeavor with small or even negative profits for the startup. That isn’t to say profit is the main driver of business cases inside corporations (from what we’ve seen, it is), but there are a wider range of business cases to be made — and a wider range of possibilities and benefits to consider — for the corporate entrepreneur.

What are the next steps?

This is a question every entrepreneur has to answer regularly, but corporate entrepreneurs have to answer it twice each time. It’s important to think about “What are the next steps on your business idea?” and “What are the next steps within the company?” Things like team-building, securing funding, getting buy-in and permission, conducting due diligence and more can all be heavily impacted by corporate policies and culture. Corporate entrepreneurs need to think about their internal strategy side-by-side with their business strategy. Remember, one risk most traditional entrepreneurs don’t face is a single skeptic being able to kill their startup; corporate entrepreneurs often have superiors who can. The conversations they have are higher stakes, and planning an internal strategy can be critical.

These two questions can inform one another. Sometimes the next steps for the business will dictate what you ask for within the company. And sometimes what internal stakeholders need to see will dictate what your prioritize as you investigate the hypothesis vital to your business.

And finally, How might it scale?

This is a question that isn’t unique to corporate startups, but it is uniquely important to them. The scale an enterprise has to reach to be a viable business is usually much larger for a corporation than an entrepreneur (by “viable” we mean big enough to be worth time, attention, resources — ten million dollars would be life-changing for most humans on Earth, but it’s a rounding error on Fortune 500 companies’ quarterly statements).

Corporate entrepreneurs need to think about what their startup looks like if it succeeds. How big can it get? What comes next? What does the world look like if and when the startup reaches its full potential, and what does the company look like? And what are the ways the startup could grow from where it is now to where it needs to be in order to be considered a success?

There often will be multiple god answers to this question, especially early on, and we’ve observed, at least anecdotally, that entrepreneurs with clearer ideas for what their startup looks like at scale (and while scaling) have an easier time conveying their core vision to others.

Usage

So far, the Corporate Startup Canvas has been used by corporate entrepreneurs in multiple companies, sectors, and countries. Early feedback suggests it’s a useful tool for helping corporate entrepreneurs and their managers think through if and how a startup might fit into the existing organization. At the time of this writing, a few companies are integrating it into their existing corporate innovation programs. But we’re always looking for more feedback and more data on its usage.

The Corporate Startup Canvas is Creative Commons licensed to allow anyone to use it, with attribution, for whatever business purposes they like. But if you’re so inclined, we’d love to hear more about your experiences using it. The current version is an open alpha that we’re hoping to refine and improve as we collect more data and learn more about how to help corporate entrepreneurs create vibrant startups in companies around the globe. So tell us what works, what doesn’t, and what needs you still have that aren’t addressed. We believe the Corporate Startup Canvas is a good tool, and we’re committed to making it a great one.