Byld unveils Genesis: a different approach to corporate venture building
January 8th, 2024
- It wouldn’t be easy, and we would need to evangelize a lot about a nonexistent model then.
- We were here to invest, not for the fees. Assuming risk was a fundamental part of our model. We wanted to be partners, not providers, to our corporate partners.
It wasn't going to be easy.
And indeed, it wasn’t. We spent hours thinking about the right arguments to convince corporate executives of the benefits of launching new businesses as a form of diversification. Fortunately, after hundreds of meetings with over 300 corporations, we can attest to the evolution and maturity of the innovation, strategy, and new business departments of a significant percentage of these companies.
We won’t deny that it was challenging, and many times, we felt like preachers in the desert. At that time, most corporations weren’t ready. However, some brave ones understood the model and trusted our methodology. “Brave” because it’s not easy to say “There’s an opportunity in logistics; let’s look for businesses there. Don’t worry; in 7 months, we’ll have something interesting and validated.”
Well, after more than 6 years in this business, we’ve proven that it works. So much so that today, we’re fortunate to call companies like Sanitas, Telefónica, Porsche, or Eroski our partners (among many others on our website, where you can find all the logos :)).
But… what about those who see the benefits but, due to fear of starting without identifying the business, risk profile, or even legal requirements, don’t fit into our model? Do they have no place in our model? “The cobbler’s children have no shoes,” they say. And it’s true. We have customer development and empathy maps for breakfast, but we haven’t always applied them to ourselves. We haven’t been able to listen to the needs of these corporations and design a corporate venture building model that aligns with them.
Assuming risk was crucial.
Having ‘skin in the game’ is crucial for us. It has been and will remain a fundamental aspect of our business model. In each corporate venture building project, we rack our brains to find ways to maximize our upside, align incentives, and assume that this involves living miserably (though well-managed ;P) until the moment of truth. Under our current model, we already take on significant risk: we invest alongside our corporate partners and we are partners, not providers. But we want to do more.
We always knew that there would come a time when to scale the model and increase the chances of success in our portfolio, it would be essential to have access to capital to take greater risks and, at the same time, decrease our risk by having more control.
The last sentence may seem counterintuitive, but you’ll agree that in corporate venture building, there are many added risk factors besides the usual ones in entrepreneurship (market, business, team…) due to the presence of such a complex entity in the equation (politics, timing, priority changes, appointments, incentives…) as the corporation.
That time has come.
As I mentioned earlier, these 6 years have allowed us to learn a lot. And, as they say, you learn as much (or more) from mistakes as from successes. We could say that in these years:
- ❌ We’ve missed enormous opportunities. Many projects that were ready couldn’t see the light due to changes in the corporation’s direction beyond our control.
- ❌ We have a value proposition that was only possible to develop with a small percentage of corporations that have a set of very complex characteristics (level of maturity, corporate structures pursuing the creation of new businesses, a certain comfort with risk and uncertainty…), leaving out a large number of corporations or, in other words, leaving us with a very small available market.
- ❌ We have a self-sufficient structure that doesn’t allow us to incorporate external partners into ventures until after they’ve been launched and in the market, leaving out potential partners for each project.
- ✅ We have a method for finding, validating, and launching new businesses with reduced risk in a few months.
- ✅ We have a deep understanding of areas of opportunity or strategic territories relevant to many corporations. The naturally transversal nature of diversification means that what may be strategic for an infrastructure company is also strategic for a logistics company. All this time has allowed us to compile the “big challenges” of most companies with which we are fortunate to have a relationship.
- ✅ We have access to a network of top-level corporations interested in participating in new businesses and contributing their assets to find new sources of income and diversification.
Seen this way, it now seems too obvious what I’m about to say, but day-to-day operations, inertia, and strong convictions (sometimes even a bit fundamentalist) can kill the best ideas. Fortunately, we have a group of partners and very intelligent people around us who led us to ask ourselves a question in the middle of the year:
What if we start with our own resources, to the point of having the venture validated, and then bring in the corporation?
And, voilà: this is Byld Genesis.
From 2024 onwards, we will do corporate venture building in two ways:
- What we’ve been doing until now (or, as we call it, “corporate-initiated corporate venture building“). We identify an area of opportunity with the corporation, and from the start, both parties invest in identifying the business, validating it, launching it, and growing it.
- Genesis. Byld will select areas of opportunity relevant to most corporations in our network, and just as we’ve been doing for these years, we will identify and validate these businesses, but this time with our own resources. This will allow us to evolve the ventures to a point where we have been able to (i) validate the solution, (ii) find the entrepreneurial team, and (iii) minimize the risk as much as possible; then we’ll bring in the best corporate partner who brings key assets (customers, technology, intellectual property…) that will make a difference in these businesses.
This new model opens up many possibilities, but there are 3 that are especially important to us:
- Addressing the needs of many corporations that see corporate venture building as a highly attractive diversification strategy but need the venture identified and validated to join. This obviously allows us to open up the spectrum of potential partners much more, or in other words, expand our available market to grow much more.
- Having more control over the course of the project to prevent incredible opportunities from slipping through our fingers due to changes in direction or priorities of the corporate partner. This way, we can even bring in several complementary corporations, further enhancing the enormous advantages that a strategic partner brings to the success of our ventures.
- Incorporating external partners into Genesis, providing access to a portfolio of ventures with:
a) Better chances of success vs. the market.
b) A construction methodology executed by a professional team and tested for over 6 years.
c) The best partners: top entrepreneurs and corporate partners who make everything easier.
d) Returns vastly superior to those of an early-stage investment fund, as, in addition to reducing risk, we are the first partner (or, in other words, we have the multiples of a founder).
For us, Byld Genesis marks the beginning of an exciting new stage. We started 2023 with 2 ventures in our portfolio and a team of 12 people. We reached the end of the year with a fantastic team of 25 people and in the process of building 6 more ventures (which we hope to see the light in the coming months). But most importantly, we have ended the year with a clear conviction of how to keep making this bigger and generating more value and impact. Welcome, Byld Genesis.