Traditionally, corporate innovation is done inside a company. That means that certain departments are dedicated towards finding solutions to current business related problems. On top of that often research is done in new, untapped fields in order to extend the scope of business and thus to expand to new markets.This could possibly result in an increase of market share and a competitive advantage. Exactly that is why firms are often keen to find innovative and industry disruptive solutions.
Currently, more and more companies rely on firms outside their direct business scope to handle innovational change for them. Critics of this method say often that in this way the research and solution finding process is not close enough. The outside firm has not the capability to truly grasp the company's culture and core values in order to create innovative solutions close to the heart of the firm. However, viewed from a different angle this can be seen as a positive aspect.
If innovation is only done within a firm, the current staff might be too entangled in the project that it might be challenging to achieve a rational and subjective assessment. Not only is often an outside view supportive, but the department might lack the necessary skills, experience and true entrepreneurial mindset to handle the execution properly.
Another reason is that it shows that products and services introduced by corporates are continuously decreasing in number*. Many industries are disrupted by energetic startups who tab into existing niche markets. That is also a reason why it is often very attractive for young talent to work at a startup and not at big corporations. They want to create something contemporary that has the power to change industries. Therefore, working together with external talent offering a fresh perspective, might just be the solution to achieve surprising results.
That is why Holland Startup believes in outsourcing business problems and corporate innovation. We therefore seek firms who want to try a different approach, in a staged investment setup, while providing if possible one employee, who serves as an entrepreneur in residence.
The idea is that the company provides data and information regarding their problem that needs to be solved. Holland Startup then constructs a founding team and thus provides the necessary skill set to tackle the problem. Furthermore, the problem will be solved while setting up a startup that offers the solution, either just for the company itself or as a possibility to scale it further to other customers/firms. Holland Startup will further provide expertise, training and mentorship in order to encourage a fast and successful execution. The corporate working together with Holland Startup will have shares of the startup itself, the amount depending on the overall ownership structure most suitable. This offers the flexibility to be part of the building and solving process, thus controlling the execution, while letting experienced Venture Builders do the execution. This combination makes the process more efficient and less risky. That is why we are open to any firm wanting to work together with us and let us foster their innovation. Because that is what we are doing best.
* Source: Concurentie- en Innovatiemonitor, Erasmus Universiteit
There is a new startup business model that gains increasing popularity, especially in the U.S while the hype breaks out more slowly in Europe and the rest of the world. For long there have been nurture programs, to support entrepreneurship in its early, most vulnerable phases. While Incubators generally speaking provide the external support for startups (like office space), Accelarators offer short term programs in order to facilitate a successfull investor pitch.
Next to these established models, there is now a new kind: Venture Building.
Contrary to, for example Rocket Internet, who primarily relies on already existing business models adjusted to new markets, Venture Building focuses purely on innovation.
The idea is that Venture Builders work together with mainly young entrepreneurs in order to solve severe market problems and turn them into startups. For this purpose the focus lays on the startup-buildind team and the support system around it. Thus, the first step is to seek motivated, skilled and creative people who have the drive to become entrepreneurs. The future entrepreneurs do not necessarily have their own business idea yet or peers they want to build a startup with.
Another crucial aspect is the long-lasting relationship between the Venture Builder who provides the experience and market expertise needed and the entrepreneurs building the startups. Opposed to Incubators and Accelarators, which are only short-term oriented, Venture Builders want to provide support for a lifetime. Their program is designed for the different phases of startup building and growth, offering individual adjustments on the way if needed. Of course this is also due to the equity stakes hold by the Venture Builder in the future startups.
The core of the business is the shared resources such as the spreading of legal and financial knowledge. In general Venture Builders profit from compressed and repeatable processes, which make the model more efficient. But most of all, they have the natural desire to create something new out of nothing. Build a company in order to solve an existing problem. Venture Builders are simply passionante about entrepreneurship.
Even within the venture builders model different approaches and types exist. While some firms rely on their internal network to validate already existing ideas, other companies have an application system to attract external talent. Already knowing the future entrepreneurs has the advantage of being able to assess skills, knowledge and potential more easily. In this way the risk of failure based on mismatching (team) characteristics is minimized. Obviously, a personal network only reaches so far. Thus, often it is necessary to reach out and find that Hipster with the coolest design skills or the Developer who knows how to turn thoughts into actual software.
As can be seen Venture Builders fill a niche within the existing business models regarding startup building. First of all, the focus is on young, skilled entrepreneurs. Secondly, these founders do not need to bring in their own ideas or building team. Thirdly, long-term investment means long-term commitment. By combining these aspects and adding the experience and expertise from multiple-time entrepreneurs/advisors and financial experts, the startup building risk can be mitigated. In this way Venture Builders offer support from the beginning phase of the startup to the exit of an established company.