My name is Floris Hoogstraten, Lead Venture Builder at Aimforthemoon and I failed miserably at my first corporate venture attempt.
We spent 6 months and €150K+ on developing something that nobody wanted.
What happened?
We fell into some well-known pitfalls:
- We started with a solution instead of a problem
- Tried to solve a problem that didn’t exist
- Didn’t use a tried-and-tested innovation process
- Outsourced a crucial part of the process and to the wrong party
- Used vanity metrics
I now know that this can happen when you innovate with innovators with little to no experience.
Let me tell you the whole ‘Thunderbolt’ story.
It’s 2018, and I’m working for a leading mobility and energy player in The Netherlands. To give you an idea, the company is 100+ years old, does €7.5 billion in EBITDA, employs 13,000 FTEs in 36 countries.
Our business unit leadership had decided that the company needed to develop new business models to stay ahead in our markets.
Together with two colleagues, we took the initiative in setting up an innovation lab. While they were focused on the innovation strategy and ensuring our lab had the mandate and resources, I focused on the actual venture building.
We got going. After talking to a few colleagues and doing some research, we found out about new legislation in The Netherlands that would require SMEs to report to the government if they consumed more than a certain level of gas/electricity and take energy-saving measures to reduce their usage.
This made us think: “OK, SMEs need to do this, they don’t have specific knowledge about this topic, so they’ll look for help, let’s give them help.”
Building an MVP seemed like the right next step. We invested €10K to get it built. The result was an MVP of a platform that would help SMEs determine whether the law applied to them and connect SMEs with service providers that could help them reduce their energy usage.
In hindsight, it’s pretty funny. At the time, we thought that by building an MVP alone, we were being so innovative. We were working lean, instead of heavily investing in building a new service with a full range of specs (which was the norm).
Anyway, the MVP was built. Now we needed to get it in front of potential customers and ask for their feedback.
So we hired a telemarketing agency, as we thought this was the most efficient way to do it. We told them that from the 200 companies that they would call, 80 needed to fill in our survey if we were to see their project as a success.
In the end, 150 people filled in the survey. We thought it was an amazing success. There was so much demand for our service!
We got back to work because we promised to send our respondents a tailor-made report with advice on which measure to take. This was quite a job but hey, we were building a startup and startups require hard work.
By the time the reports were finished, we insisted on presenting the reports in-person instead of just sending them by email. We thought this would enable us to close more deals in the follow-up.
So… How many meetings do you think we were able to plan?
100?
50?
30?
Nope.
5.
We were able to do five interviews, most of them with companies with production facilities. In the interviews we learned that these companies didn’t care at all about reducing their energy usage. “We are heavy users and get a big discount on our contracts”, they said. Also, this new law we kept talking about wasn’t being enforced, so nobody cared. Instead, they were concerned about complying with other regulations such as fire safety and hygiene. Failing to do so they would have closed down their factories immediately.
You can imagine how we felt…
And that ridiculously low number?
It turned out that those 150 people were so fed up with the telemarketing agency that in the end they filled in the survey just to get rid of these people. Apparently, our goal of 80 respondents motivated the agency to keep pushing people. We both thought they did so well. Us insisting on an in-person interview made matters even worse, which explained the 3% conversion.
This is what you get when you’re too focused on closing deals…
Despite the few interviews, we decided to move forward with our MVP (I remind you: we had no process or proper stage gates in place). We built a platform and spent some money on ads for a while, but the law was never really enforced, so there was no trigger for companies to take any measures.
The bad news is that soon after that, Thunderbolt was killed. A good amount of time and money was wasted.
The good news is that the company decided to take our learnings and put them to use in developing the next venture, for which I applaud them. By then, I’d gotten to know Aimforthemoon and we hired them to help us build Revolt, an electric mobility venture in the EV charging infrastructure space. Their journey has been much smoother, in part thanks to our initial mistakes with Thunderbolt. I’m happy that Thunderbolt is part of my journey and that it led me -a few years later- to joining Aimforthemoon. I’ve learned first-hand that you can waste a lot of time, money and talent if you don’t know what you’re doing. Our mistake was that we failed to acknowledge that we didn’t know what we didn’t know. We should have worked together with experienced innovators from the get go. This is the only thing I regret. The rest is nothing but learnings.
Want to avoid making the same mistakes I made? Then check out our innovation tools and let us help you take the next step!
