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 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.

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.

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.

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.