10 common mistakes when working with the CVB model
December 27, 2023
Although the corporate venture building model is less and less unknown -fortunately- and more and more companies are launching to innovate and diversify their business through it, each interaction is a world of its own and we all learn from each one, both the corporate partner and us as CVBuilders. Therefore, we have collected here the main lessons learned, which we bring after years of experience in the implementation of our model.
If you are thinking of launching a CVB or you are already in it, these bullets can mark a before and after in the experience you have working under this model. Here they go!
1. The relationship between partner and CVB shouldn´t be other than a partnership
We are starting a company together! And that should be the mindset from the beginning. If you were going to set up a company with someone… Wouldn’t you work hand in hand with a single common interest? The same should be true here, and that genuine collaboration does nothing but turn the day-to-day, the results and the intra-team communication 180 degrees.
2. Not getting involved in the project beyond the key points of contact
Very much in line with what we discussed in the previous point. Making time for the project from the corporation is key. Working together with a dedicated team would be ideal to bring together the best of each party.
3. Don't set KPIs from the start and review and iterate
It is very important to know how to measure the success of what we are going to do together. It is not difficult to lose focus during the process and well-drawn KPIs can help us get back on track when we lose it, as well as give us an objective view when determining the success of what is being done or what to do to achieve it in case of deviations.
4. Ignoring market trends, or rejecting them because of individual prejudices, the typical "I am my own user"
If we want to set up a company that is going to coexist in a specific ecosystem… we have to tailor it, listening very carefully to what the market needs and demands. That prevails more than our own tastes and habits.
5. Fear when choosing the Venture Concepts to validate
It is very common that, when deciding which concept we want to validate and build, we do it from the perspective of the objectives of the corporation itself and this is not bad at all, but it is important to set limits and that this perspective is not the only protagonist when making a decision. We have a whole research that is also relevant! If something is too core in many occasions the model loses sense in front of developing concepts from within the corporation. We must take advantage of the CVB model as a catalyst for more risky and innovative concepts.
6. Lack of communication/slow internal communication
This often slows down or paralyzes strategic and time-to-market decision-making. Corporate Venture Building is an agile model, based on testing and failing early and fast to build a validated business in the shortest possible time.
7. Premature abandonment, projects that are put in a drawer
We are aware of the compromises involved in the model and that the road is not always easy, but it is worse to abandon than to do it and fail. Good concepts, good work and good opportunities for success are wasted. As Yoda says: “Not try, do”.
8. Too focus on short-term results
Results are important, of course. And being clear on how we are going to get them as soon as possible with a solid thesis, too. But setting up a business and getting satisfactory results often takes time, and expecting otherwise can generate a lot of frustration.
9. Insufficient support for entrepreneurial talent
Key point. Establish from the beginning the model of mentoring and support to the entrepreneurial team knowing in advance that each team and each venture are different and will need different things. Providing the necessary resources eliminates frustration and burnout of the team and ensures the success of the business.
10. Lack of attention to the creation of ecosystems
Neglecting the creation and fostering of an ecosystem of support, partnership and collaboration around the startup means a loss of opportunities for synergies and growth through strategic alliances that we cannot afford.
As we can see, this model is super relational, intense and very flexible, which makes each project different even though it is executed under the same methodology.
Corporate Venture Builders should focus on building a solid foundation for collaboration, promoting a culture of innovation and maintaining a long-term strategic perspective to maximize the success of the companies in which they participate.
What about you, are there any points missing, and is there anything that particularly resonates with you?