Creating a Model for Successful Generation of New Ventures (Part One)
If you wanted to develop a model that could predict the future success of ventures that haven’t yet been created, what variables would you need to consider? And how would you model the interaction of those variables?
These questions may seem abstract, but they describe the situation in which most startup founders find themselves as they think about creating a new venture. The list of variables that might be taken into account can seem limitless. Worse, it is painfully clear that many — perhaps most — startup founders fail to appreciate the need for a founder “due diligence” process. After all, the investment they plan to make – e.g., the next 5–10 years of their lives – is a more substantial commitment than the capital brought to the table by angel, seed or early stage founders. Startup founders need better ways to think about the process of creating a new venture. They need a better model.
Where might we start? What can we do to help?
We could begin to improve on current approaches in either of two ways. We could start with the predominant model for new venture creation and enumerate the elements of that model. We could then look at the data and assess the degree to which startup founders using this model find it helpful for predicting their success.
In the alternative, we could begin with the end in mind. We could define success (to be achieved at some point in the future) and walk our backward from this future success toward the present. What would have to be done just before “success” is achieved? And what had to happen just before that? By starting with “the end” we can begin to think through the “jobs” that will need to be done, who will need to do them, and when they will need to be completed. Of course, this is an imperfect approach. Some “jobs to be done” will become clear only after time has passed or after certain milestones have been achieved.
One new approach, the “Startup Studio” model, builds multiple companies in parallel or in rapid succession. It could be considered version 2.0 of the Idealab or “incubator” model pioneered by Bill Gross in the 90s focused on turning ideas into successful companies.
Another model, the “venture generator” model developed by 10.10.10, takes a very different approach. Here the focus is on a “problem-first” approach. Each program offers 10 “wicked problems” in problem areas (like health, water, food, energy, learning, infrastructure, security, etc.) that may be of interest to experienced entrepreneurs who plan to start new ventures. [Disclosure: I started 10.10.10 in 2012 with support from an extraordinary team.]
With your help, I want to begin to consider better ways to support the creation of new ventures that deliver value to entrepreneurs, investors, customers and the world. Have you seen a repeatable model for new venture generation that you can share? What are the necessary elements or variables that must be taken into consideration when crafting a successful model for creating new ventures? Let’s work on this together!
From October 16–26, 2017, 10.10.10 will host its Cities program in Denver. This 10.10.10 Cities program will focus on “wicked problems” 2 key areas: water and infrastructure. If you’d like to be involved in some way, this is the place to sign up.
We invite just 10 prospective CEOs to participate in each program. (You’ll find our most recent cohort of prospective CEOs here.) If you are a successful serial entrepreneur and plan to start a new venture, you may request an invitation here by filling out the form. We also partner with Validators (organizations and institutions with deep domain knowledge) and Ninjas (individuals with the specific skills — finance, marketing, design, product management, data analysis, etc.) to support our prospective CEOs during the program.