Outperforming Startups: What Corporate Ventures Are Getting Right
In Episode 19 of MING Labs’ podcast Lost In Transformation, we talk to Sam Hall, CEO of Asia Pacific at Rainmaking, a corporate innovation and venture development firm.
Tune into this episode for the full insights from Sam on his philosophy of career fulfilment, and why the future of innovation is in corporate ventures.
5 Main Takeaways From This Episode
01Corporates should develop the institutional competence of new business building. “I firmly believe that the future of innovation will be corporate startups,” Sam Hall says, because corporates have an enormous number of assets, but lack the competence in new venture creation that startups have. “The belief of everything we do around new business building is that competence plus assets will always trump competence alone.” (Listen from 12:25)
02Leverage assets in a corporate. These are essential to the success of building new ventures. Running experiments are key entrepreneurial processes in validating user needs and solutions. “My belief is that it doesn’t take X period of time (to do validation tests). It now takes about half, or a quarter, or an eighth of X. The reason for that is when you have corporate assets that you can leverage, you generate data far quicker. You can run experiments far quicker.” Without using their assets, it is a venture not worth pursuing because the corporate is effectively building a venture in the wild, and would not be able to outcompete startups. (Listen from 16:19)
03Underpin innovation culture initiatives with corresponding incentives. Align what people are internally judged on and what furthers their career with innovation goals. In Sam’s experience, the necessary mindset comes into alignment quickly among senior stakeholders who have an obligation to deliver new creations or top line growth. “If what you’re trying to change mindsets by cultural initiatives, but you’re not changing the underlying incentivization, the transformation becomes a little bit of a Charade.” (Listen from 22:05)
04 Understand the de-risking benefit of having external entrepreneurs involved in the new venture. “I think it’s more effective to have entrepreneurs who come from outside because they can immediately get to work as entrepreneurs.” Rainmaking often (but not always) introduces external talent who are well-versed in building new businesses. Otherwise, the talent has to come from within the corporate. “If you’re coaching and allowing people to learn on the job (about new venture creation), then you’re stacking risk.” (Listen from 23:37)
05Set up the founding team in two phases: the Validation Team, and the Post-Validation Founding Team. The Validation Team should comprise: People who understand both corporates and startups, and who have the intellectual agility to identify shifts that are occurring in the industry and therefore where value may be created in the future. For the Post-Validation Founding Team, Rainmaking has the immediate founding team to do the recruitment personally, as they’re the people who are going to lead and inspire and guide the team moving forward. (Listen from 28:01)
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Related Reading: How To Acquire The Skillset, Mindset And Heartset To Tackle The Future
