FAQ

Corporate Innovation

Why should a company innovate to begin with?

Innovation is not only necessary to thrive in the corporate arena – it is essential for survival at times where starting a business is easier than it’s ever been and access to capital is at an all-time high. A recent study by McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared. Under constant pressure to stay relevant, corporates must compete with agile start-ups and adapt to major societal shifts as they arise. While increasing the profit and efficiency of the core business remains top of the agenda for corporates, investment in innovation must also be prioritized. Innovation done right increases competitiveness, improves shareholder trust, and creates brand new revenue streams.

Corporate Venture Building

Why should a company innovate to begin with?

Innovation is not only necessary to thrive in the corporate arena – it is essential for survival at times where starting a business is easier than it’s ever been and access to capital is at an all-time high. A recent study by McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared. Under constant pressure to stay relevant, corporates must compete with agile start-ups and adapt to major societal shifts as they arise. While increasing the profit and efficiency of the core business remains top of the agenda for corporates, investment in innovation must also be prioritized. Innovation done right increases competitiveness, improves shareholder trust, and creates brand new revenue streams.

What is corporate venture building?

Corporate venture building is about unlocking a corporation’s assets at the speed, tenacity, and agility of a start-up, to launch truly disruptive ventures. It is all about innovating better than the disruptors. Or you could say; Corporate Venture Building: Becoming the Disruptors. Building the business models of tomorrow.Corporate venture building covers 2 different parts / phases. 0-1 and 1-N or what we like to call Grow & Scale

The first phase 0-1 is focused on the process to actually get from nothing or only a vague idea to 1 which in our definition is a first version of your business with your first paying clients. Grow & Scale is a different phase that starts after 1.

What are the benefits of Corporate Venture Building?

Every day new entrants and challengers are rapidly deploying H3 innovations, refashioning and repurposing their assets and capabilities to single-mindedly disrupt and replace incumbents but without the burden of navigating around legacy infrastructures, bureaucratic processes, and managing reputational risks.

By building a standalone venture outside of the organization, we’ve found that corporate venture building increases the chances of innovation success and mitigates the force of disruption. Whether they end up as a spin-off business or are integrated back into the organization, this freedom gives the venture the opportunity to break away from many of the factors which contribute to unsuccessful innovations.

The frameworks of CVB are designed to handle the risk that is systemic in today’s markets. When conducted correctly, a CVB process begins by defining the innovation gap that can support the parent company economically. Prototypes are then built based on the most promising ideas and are immediately tested in the market to ensure only the most viable are proceeded with. This whole process needs to be data-driven, fast and strategic. With the right governance structures in place, entrepreneurial minds are harnessed in a stable corporate structure to make the parent company’s new startup successful.

How does the Corporate Venture Building process work at Aimforthemoon?

This is how we at Aimforthemoon organized our Innovation process: We have 3 phases we call Scan, Test and Build. The scan phase is focused on discovering where we could add value and is focused on creating at least one proposition that solves a problem for a user.The test phase is all about testing the proposition in the market and in that way learning what is needed to increase the chances of success. We focus on testing desirability (what is it that users desire the most), feasibility (can we actually make this) and viability (what is the best business model at what price should we sell our proposition). The result is a de-risked value proposition that deserves investment to actually build the first version in the build phase where we not only focus on building the product, but also the team, branding and route to market.

Could we apply a M&A strategy to work together with emerging start-ups?

Buying seriously expensive companies may not always be the best idea. This rings especially true when considering that the vast majority of mergers and acquisitions struggle to integrate into the larger company. Forced to deal with added bureaucracy, culture shock, and system changes, the acquirees’ employees can begin to find themself in a foreign environment. On top of people challenges, integrations can fail due to a host of many other challenges — from inaccurate information to a leadership vacuum. In fact, the amount of M&As that fail could be nearly as high as failed innovation projects, sitting somewhere between 70% and 90%. Examples of failed mergers and acquisitions Google & Motorola and Nokia & Microsoft or Amazon & Wholefoods.

Grow & Scale

How can I grow my company in the most efficient way?

At Aimforthemoon we strongly believe in iterating the development of your company. According to Startup Genome, 70% of start-ups scale too quickly. They hire staff too quickly, offering generous compensations before stable revenues are established. They focus on growing the wrong segment, which provides no real profitability to their firm, or they pursue growth efforts without truly understanding the market and thus growing their marketing spend without establishing objective metrics of success first. When you work with Aimforthemoon, we establish the baselines and metrics to grow the most important parts of your company first.

How can we speed up the process of growth?

Growth is not a strategy, it’s a phase. When you’re ramping up for the first time, growth is actually a balancing act between growth of your customer base and efficient delivery of those customers. You can speed up the process of growth by identifying what customer segment you should be growing. It should be specifically thát segment that adds value to your company as it grows. Growth hacking at Aimforthemoon specializes in this balancing act between commercial growth and delivery efficiency by identifying the business model that is set up for scalability.

How do I know it’s wise to grow or scale my business?

Scale is not growth. It is also not doing something at a larger scale. It’s not about size. Scale means that you are able to efficiently make money. How do you do that? You’re able to lower the Cost to Serve and maximize the gross margin of one customer; this is called unit economics. So not only do you need to find your customer in the most efficient way possible, you also need to find ways to optimize the space between you and the market. This is your cumulative competitive advantage that is worth investing in. At Aimforthemoon we have the models in place to quickly assess whether you have the right elements in place to achieve scale.

What is the difference between the 0-1 (zero-to-one) phase and the grow- and- scale phase?

The 0-1 phase is all about effectiveness and risk reduction. You scan, test and build what you’ve proven to be a solution for the problem your customer has. The grow & scale phase is about efficiency.  We treat Marketing & Sales as a process that needs to be made more efficient every single day. We use OKR periods to create a company cadence and we manage progress in 6 sprints of 2 weeks per period. We define clear goals to iterate towards a predictable sales engine and operating model that is worth investing in.

What type of marketeer do I need in the growth phase of our company?

The 5-legged sheep, as they would call it in Dutch. Also known as the Growth Hacker. But beware, hiring one single person to add to your team will result in a high-level marketing or operational approach. So you need a group of specialists that will have your back, and will do the work when you need them to, without being part of your payroll. If they create your set-up and help you find your predictable growth engine, you will then be able to hire exactly the right person you need to manage that specific engine going forward. If you use external help, you can make use of a multidisciplinary team of specialists that will allow you to experiment on many different areas of sales marketing and customer excellence.

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Contact

Want to further discuss?

Get in touch with our Aimforthemoon Partner and Corporate Venture Building Lead Jos Werner