Corporate Venture Building: 8 Lessons Learned from the Trenches with Misha de Sterke

Hey everyone, how's it going? My name is Ayhan Isaacs, I'm the head of global growth for the Founder Institute. Thank you so much for taking the time to join us today. This is a little bit of a different time, we usually do these at 6 PM Singapore time or 10 AM PST. I'm calling you out of Dubai, so this is 5 PM my time, 3 PM for people in Western Europe, so appreciate you taking the time to join us today. We have a very, very awesome webinar with you planned out today called Corporate Venture Building. We have Misha, who's going to be talking about his lessons that he's been, that he's learned over the last few years. I would say lots of years, maybe 10, 15 years, and he's gonna, I've heard this presentation before, and it's been amazing. We're just going to kick off here in a bit. I'll let Misha introduce himself, but You know, we had about 150 people sign up, so I'm expecting about 70 people to show up. We're already at 30 people, so I think we'll get there. In the meantime, Misha, do you want to self-introduce yourself?

Yeah, and should I put on the screen already? Is that a good one?

Maybe once you introduce yourself and then we'll— Sure.

Okay, everybody, good to meet you all. My name is Misha de Sterke, working for the last, indeed, 10-15 years in corporate innovation. Also work as an entrepreneur myself on different startups, so I know what it feels, um, how to build something from zero to a certain point. I'm working with a lot of large corporations, founded 10x Growth, a company where we help large corporations grow their business through innovation. And we always tend to aim at how can we build something that can be scaled with the assets and channels of the large corporation, because that also where you bring an unfair advantage as a large corporation versus a startup, right, which is always looking for the next, uh, funding or distribution. So that's me in a nutshell. Today we're going to talk about a couple of lessons I have learned during the years. I hope that's engaging and that it leads to all different types of thoughts and questions, but very curious about your experience too. And have a lively conversation afterwards, I hope.

Okay, perfect. Thanks. Just some housekeeping, folks. You'll see there's a chat. Please, as Mischa is asking questions throughout the presentation, use the chat. There's also a Q&A button. Please try to use that to feed us questions. Mischa will do about a 20-30 minute presentation. We'll jump into Q&A and then we'll break out into networking after. That being said, I'm gonna throw up a poll on the stage. It'd be great to get everyone to vote, you know, just curious how much experience you have with corporate venture, you know, have you done it before? Okay, I hope everyone can kind of see it. All right, cool. Misha, can you also see the vote or no?

Yes, I see it.

Okay. Okay, so we have some people voting here, so it seems like majority of the people are not well-versed, Misha, but we have some people who have some experience, so hopefully this gives you an idea. Again, this is a small representative, but yeah. All right, Misha, I'll kick it over to you. Feel free to screen share, and then I'll hop back on to do some Q&A towards the end.

All right, very good. Okay, cool. Let me put up the screen. There it is. So you can all see my screen?

Yeah, you're good to go.

Okay guys, so we're going to talk about corporate innovation and my experience so far. But before I step into my own lessons and learnings, I think it's good to set the stage and have some introduction slides so you understand the context well. So of course we all know that change is coming, right? I mean, We only have to look at the news and, and we already sort of are bombarded with, with many changes that we see happening around us. So we know that the future is turbulent. We also see that growth comes outside of the core business and new competitors are entering almost every day. So a question for you, just to type a short answer in the comments and in the chat section. So why is it that only 1 out of 9 companies achieve sustainable and profitable growth. Take a couple of seconds just to put some associations and thoughts and ideas there. But why do you think this is proven by different researchers? Why is it that only 1 out of 9 companies achieve sustainable and profitable growth? Give you a couple of seconds before I move on, but feel free to type during the webinar also. Now, if we zoom out, what we see in general is that when you start to grow, um, it also means that you create complexity. And in general, you see that if complexity starts to build up in a company, that can also kill growth because you are losing your speed. You maybe lose a bit of the founder's mentality. And you start executing your current business and you have a less keen eye on new businesses, right? So growth creates complexity and complexity kills growth. And what we see is that 7% of the companies, the larger companies, are able to capture the benefits of speed and skill. Now we'll dive a bit more into that. So what we see here on the left side is your skill minus and plus, and you see, um, speed. And of course you understand that startups have speed but they lack skill. But the more we start growing the business, you see that certain things kick in. So we have a growth dilemma, which I will introduce after this slide, but it basically means that it's hard for larger companies to detect small opportunities and fund them accordingly. Of course, organizational complexity. So you add layers, more management is coming in, that needs to be more coordination efforts. There's a sense that entrepreneurship is being lost because if you start executing on a large scale, you don't want to have a bunch of entrepreneurs doing all types of new and, and different stuff. So there's a very big focus on the core, which makes complete sense, and it's difficult to steer a large company, right? So I think it's illusion to think that if you have a €100 billion company that you can steer that from a cockpit. So you have all these people at all different locations, and that needs to be managed. So all these things together, um, will at one moment, uh, make sure that the company is, is starting to lose traction some way or the other. As said before, the, the growth dilemma is basically two things. So it's difficult for big companies to see small opportunities. And a company's accounting metrics, they pull resources to the big opportunities in known markets. And what you will see is when you start doing innovation programs is at the moment that you will spot a disruptive opportunity, um, which can be small in the beginning but of course very new and, and big in the future if you execute well. The, the subtleness in which, uh, unknown opportunities move to big opportunities in no markets, it goes very subtle. It's just interesting if you have a lens for that to see how these conversations are happening when you want a next funding round for your corporate venture. So there are 3 types of organizations. Of course, we have a startup, a scale-up, small speed entrepreneurial mentality. Testing new things, um, and really looking for traction. At one moment in time, if you are becoming very successful— and there's also, of course, companies in between that are not leading their industry, but we call them incubants, right? So they lead their industry, they're very big, they also have the benefits of scale. And most of the time you also see internal communication campaigns around consumer centricity or bring back entrepreneurship but they find it hard to do that. And then you have more struggling bureaucracies, which we would like to avoid, but they have been a leader in their industry, but they can't react to competitors fast enough because their size has become actually a liability instead of a benefit. So the whole question I had in mind when writing also one of my books a couple of years ago— so how can you help companies innovate systematically at scale, but how can we also combine, let's say, the assets a large company has and build something that can be— that can find traction fast but can also be scaled fast with the assets the company has. So that has been one of the big questions on my mind. I've written a book about it, but basically the idea is how we can move from an established company that only competes at scale How can we move that to what I call a growth engine or a growth machine that is systematically innovating on different types of horizons to really create new growth opportunities? This is the book if you are more interested in, in all the details behind. But here you see 8 pillars, and then one of the, the further webinars, um, I will dive into these pillars more in detail and we will do some exercises behind it. But These 8 pillars I have identified through the years, um, in what I see is essential to put in place if you want to create your own incubator, lab, accelerator, whatever you would like to call that. So I will touch upon them very briefly. One is governance. So basically, who and how do we make resource decisions when it comes to new ventures? Two, how big Uh, is our growth gap. So if we project our current earnings into the future, how much growth do we need to capture? And do we have a sized portfolio in place to actually get to such a large revenue number? 3, did we allocate capital to invest in our winning bets? Because you don't want to get stuck in your quarterly budget or yearly budget cycles. A metered funding— do we have a system in place that when the teams prove progress and have relevant data points from the market, that we sort of automatically start funding the winning bets? Which is related to number 4. So having a process in place that moves from brief all the way to deployment in the market— do we have milestones in place? Do we have alignment around those milestones? Basically understand how to fund and evaluate young companies. Partnerships— you don't have to build everything yourself. You also need to look for smart partnerships like institutions of the Foundry Institute, where a lot of young companies are being scouted and prepared and accelerated. Number 6, and this is where I have spent a lot of time, which was not my favorite hobby, But this is basically how can we create support processes that enable fast learning? So can I set up a new tool very fast? Can I test on-brand or off-brand? And how can we make sure that I'm not stuck in a legal conversation for 4 months? So you— and these are all things that you will lose time with, right? And one thing that we are very precise with is actually to, to save time and to enable speed. So support function processes, talent and capability development— yeah, this can also be number one because in the end I truly believe that the team and the quality of the team will make the difference. Do we invest and, and develop our talents? And the entrepreneurial leadership is something I have added through the, the last 3 years because the right type of mindset from the teams, the individuals, but also the management is such a crucial indicator that we can build something successful. And that really has to deal with how do we work with the uncertainty, the ambiguity of our innovation initiatives, which we need to master, which we need to embrace, because that is just the reality of innovation. So As a setting, basically, how can we help large companies compete on, on speed and scale? Um, and basically I'm going to share a couple of lessons that I've experienced and also solved through the years. So, um, what we should do and where we always start is what we— what problem is it that we actually should solve with corporate innovation and venture building? And this is one of the things which I think we always need to solve. And this is probably what the CFO sometimes thinks when he looks at all the accelerators and incubators, and there's quite a vague return on investment. So this is what we want to change around, basically. And there are 3 other overarching goals. One is To make it more transparent and to understand at one moment in time where do we need to place our bets and money is that we need to create predictable timelines for new ventures to go to the market, and they need to have different milestones to prove during different phases. And based on these proof points, we release funds. Two, corporates need big revenue numbers to allocate resources for a project. That's just a given. Um, and there's a whole stream in the innovation world that also says you need to separate the different types of innovations, which is completely true. But I'm also sticking a bit to the reality of that I've seen the most. So you need to produce big revenue numbers, and that means that the corporate team should be able to forecast the scalability potential of ideas for the immediate and near future. Because from the innovation portfolio perspective we should help our managers and investors to make it a bit more easier to fund, um, let's say, uh, the interesting debts. And number 3, because a large company has so many advantages which they sometimes, I don't think, see themselves anymore, and so many assets. So basically, that if we forecast, we also need to see the possibility of how fast can we grow the business when we scale, uh, through sales channels that are already in place. And, and this is important to, to reflect upon because this will impact your execution in your innovation program from week one. So scaling starts early, not after X amount of months. So we always need to see how can we prepare to scale, because that's in the end where large corporations are also very strong. Now, these three things basically enable the company to start acting a bit more like an investor, and that's the idea. So can we apply investment principles and de-risk our uncertain innovation initiatives? Now, lesson one: basically, we need to bring leadership on board. And this is of course something that you have heard before, but basically I can't emphasize it enough. Um, and also on particular topics we should onboard them. Now, one is more like a statement that if you want to create something new, you basically can't build that on the old mental map. Because if you look at how, um, the strengths of large companies and their management teams is that they, they know very well how to execute on scale. And executing the existing business model and make sure that is managed very well, efficient, etc. But that's not the mental map we can build on new businesses. So we also need to be aware of these, um, differences. And that also means that if we want to be transformational, it's also the ability of the leaders and the teams and all the individuals engaged. So Can we reflect upon our own illusions? So are we really making an impact with our programs, or are we looking a bit more at vanity metrics? So I have done a good job today, uh, looking at, at my boss. Um, and we would like to avoid in the end innovation theater because we have the responsibility to grow and future-proof the business. But this is hard, so this really requires an open mentality and a mentality of being able to reflect on the actual status of what we do. But I also notice there's an overvaluation of the rational, the intellect, the planning, and the processes. And what I always say, you never fall in love on the basis of a policy memo. And so we also really need to have passion and a compelling vision where people want to be part of and really help to run the future of the business. Another thing around leadership is indeed already mindset and role clarity. So a couple of things that I think is important: can we really focus on the consumer, the customer, instead of internal complexities? So are we able with our talents and external parties to really create empowered teams that make decisions and build a business around the next customer problem. That's basically one of the main focus points. Two, can we practice faster decision-making? Many times and, and many slides that I have seen for different companies, that they always like to speed up the decision-making progress— uh, process. And one of the things what is very important is that we start to feel what it means to have progress over perfection. So, and this sounds again on the slide like, of course, fantastic, but this is very hard when you're used to doing the opposite for many years. And we need to have empathy also for that. So therefore the reflection is very important. What does it mean to have progress over perfection? But it's one of the only ways to actually go faster. It means for leaders how we can make problems smaller by solving the specific and less debating the ideal and the ideological. We support the teams by listening, coaching, giving, and celebrating, and not telling the teams what to do. We explore without judgment what the teams are learning, and we try to shift the focus from controlling to facilitate peer-to-peer learning and collaboration across silos and business units. The other thing is senior managers as investors. So can we adopt an investor lens? Now, one of the important things when it comes to innovation, and, and especially Horizon 2 and 3, or let's say business model innovation, um, it just takes a longer time to, to grow to a large business. Um, at the same time, so we need to have patience for growth, as, as Clayton Christensen already reminded us, but we should be impatient for revenue. So what does it mean? The teams on the ground that work on innovative ideas and businesses, they should have an impatience for finding traction and actually finding people that want to pay for the solution. So it's a bit of a double-edged sword. On the one hand, we need to be patient for, patient for growth, have the ability to forecast it as mentioned before. At the same time, we need to be impatient for revenue. We need to understand metrics for growth and principles of portfolio investing. So this is a slide coming from KPMG, and it's basically looking at a general distribution within the CPG industry on how you might allocate your resources across different horizons. Where Horizon 1 is, is incremental, it's improving your, your existing business, which should be an ongoing thing because that's your cash cow today. Horizon 2, can we move into adjacent territories, adjacent innovations? You can allocate around 30%, and this benchmark is coming from 220 1%. And if you look at more disruptive innovations, um, you can allocate around 20%. The interesting thing is that maybe some of you know the famous 70-30-10. That was sort of how Google distributed their, uh, um, their resources. But so actually, in this benchmark from the CPG, you see, for example, that apparently they doubled down on disruptive innovations. Well, that just tells us that change is coming, new business models are coming in, and more money is flowing also to in these types of innovations. And you see that number 3, the growth gap. So basically we need to get to a certain growth point, but we need to have a realistic perspective of can our complete portfolio of innovative ideas and, and programs actually, uh, future that revenue gap. So it should be also really tightly connected to a strategic growth goal. Now, just a short question so you can also sink in a bit the things that I have shared. So which theme do you see specifically in your context as relevant to work on? Is that the portfolio? Is that the growth gap? Is that specific metrics on how you measure progress, or is it all? So just type in your, your, your answers in the comments. So what stood out for you? Where do you think your company should work on? Is that the leadership alignment piece, on the process, the metrics, portfolio? So feel free to type in a couple of answers in the comments. So number 2, we touched upon this already briefly. So it's an end-to-end process with predictable timelines. And most of the time you see that companies first develop a product, create a marketing position, sales, and then bring it to market. And then to figure out, okay, the market doesn't accept it, so the sales wasn't good, but sales tells marketing that the marketing position wasn't good. And marketing tells R&D, well, we shouldn't actually create this product first of all. This is a bit black and white formulated, but this is what I've seen multiple times. And we want to replace such a more traditional linear process, I would say, with a lean, uh, end-to-end innovation process in which we have the famous build-measure-learn cycle, which comes from Eric Ries and the Lean Startup movement. In which we slow— in which we iterate every week on, on different assumptions behind our target audience, our product, our price points. So we have all types of assumptions. We test these assumptions with the consumer in the markets through experiments. We learn from that, and basically from there we build and continue the program and, and de-risking the venture. So in that innovation process, we combine the Lean Startup cycle with the advantages of direct-to-consumer channels that enables us to learn faster. Well, this is an example of the process we use a lot. Um, now it can differ per brief, of course, but I really want to always be very clear in, in the timelines around what a team should proof from the market. So most of the time we start with understanding the market, more the strategic perspectives. Do we have already an audience segmentation? Do we have already certain existing ideas? Did we try certain things in the past? Why did it work? Why not? So that's more like the first preparation week. Then we move into consumer discovery where we need to understand the, the best target audience, their occasion or buyer journey, First ideas around pains and jobs to be done, size of, of the, size of the group of people that have the problem. So these are all initial proof points that we need to find to continue to create more prototypes and start testing different types of solutions. So in each week you need to prove significant data on the amount of variables. And this is fast. This is a lot of work per sprint, but it's basically enabling the team and the management around it to understand this is what we need to prove now. These are the next steps. And here you see it's a bit small in— a bit small types— typo. But we connect the process with a maturity level for investment. So in customer discovery, we need to identify pain points of the consumer. We need to understand the profile. We need to understand if there are enough people that actually have that pain. And we would like to formulate already our first viability assumptions. So if the business has certain expectations to grow and have profitability, we need to take these assumptions and expectations into our experiment roadmap. Also to avoid that the innovation process becomes also like a linear process that moves us from step to step. But we really want to understand also viability assumptions. Once we continue with proving and getting more mature, we move into the investment ladder. And that is basically a tool that you can use to align with the team and the stakeholders And of course, there are a lot of questions behind these steps, but it's a bit too detailed to discuss now. But I hope it gives you an idea that we can make things transparent. We can show how the team is moving into their maturity level and what type of funding could match that. Now, this is really going back to the basics. So it's scoping. What I've seen a lot is like very broad briefs, like 'Can we win in a specific market?' or 'How can AI help us do X?' And what I just think that is very important is that we need to be very clear on the scope of the program so that we are able to create something successful. Because what I see is that the projects can already fail upfront because of the scope of the project, and Two things that we need to make sure in that scoping phase is that we align and set expectations very clear between the team and the stakeholders. And this can be a phase that is sort of skipped sometimes in my experience, but it will create confusion and, and, um, unnecessary disappointments later on in the process. So I want to understand their goals, their boundaries. Are there specific things that we can't do? Do they have certain ideas of how to measure success? And also this enables us to— that we are directionally correct in the goals so that the team can actually deliver on those goals. And sometimes, as an example, we can't validate a complete business in 6 months. Yeah, the timelines are just broader than that, but it's just important to, to make sure on these basic things to be very clear. Because reality is, is that big projects expand the scope, budgets, and team in response to, let's say, suggestions from senior leaders or early advocates. And what I also see is the greater the fanfare and the more people and the larger the scope, the, the more difficult it is for long-term survival. So basically, the success starts already in the beginning. Determine your minimal viability success criteria. Well, this is something I just mentioned, but I think it's important to highlight because what are the in and explicit expectations around profit, revenue growth, and size of the prize? And I've seen in the past that certain teams, which I was not always involved, um, do not have a clue about how the business looks at certain innovation product, uh, projects. And, and then basically are, are loose in, in directions and boundaries. So the team can continue, but nobody really knows, are we now on a good track, yes or no? And this really helps to sort of determine upfront what is it that we need to prove. If it's not a 15 million opportunity for a market in the world, okay, and, and if we understand that, then we can calculate back How many consumers do we need to recruit? What should be a price of our product if I look at margins? So it sets also certain experiments that we need to run. And even more interesting is that we want to understand that one moment in, in time that if we recruit enough data, that we can forecast better on if we spend X amount of euros, we are able to acquire X amount of customers. X percent of these people retain, and they all spend around X amount of euros, dollars, or wherever you are in the world on, on our product. And this makes the whole business case more transparent and more predictable, which is very helpful, um, even if you're a startup or a corporate startup, that doesn't matter. So again, a question: how is the scoping, evaluating, and financing of innovation executed in your company? Again, just share a couple of thoughts, experiences, observations that you have seen here in practice. Do you recognize the scoping issues? Do you see that it's difficult to evaluate and finance innovation within your company? So please share a couple of your experiences, ideas, comments. In the chat. Number 4 is that we can benchmark success. So what we always do is that we use benchmark data on sales metrics from the specific category that we are innovating. And with this measuring stick, we can basically understand how scalable a product is also within certain existing channels. Well, you already notice, the ones that have more experience, that My focus is really when it comes to corporate innovation and venture building that we create something that can be scaled with the assets the company has. So I'm focusing less on completely new businesses. That can be sometimes something that we do, but I'm just very precise and a bit more sharp on if we should do such, such initiatives because it requires a lot of preparation and requirements to make that successful. But benchmark data, coming back to the topic, really helps to understand, are we on the right track? So there are a lot of databases that can provide you with this, and it's another indicator that shows you how you can be successful. Another thing is how to differentiate from competitors and protect your venture from being copied. So first of all, iterate and learn faster than competitors. So the more we work with the teams, the more we develop that muscle for fast learning, the faster we learn than our competitors in the market. And this sounds super obvious, this is also the philosophy of the whole Lean Startup movement, um, but it's a tough cookie, right, to, to really develop these muscles. It's a long-term investment. Value to say. But at the same time, to keep it more practical, so what were the most novel, counterintuitive, surprising things we learned from consumers ourselves about the persona, the problem and its context, solution features, and channels? Here you will find things on which we can innovate basically and differentiate what we do versus competition. What I also think is important, that is something Tony Ulwyck made, is a framework on which we basically look at the different strategies that we can apply. So my thing is always, can we strategize different options in the beginning of the work? And you see the example of Uber here. So I will briefly explain the framework that you're looking at. So you see on the left side, X to get the job done better or worse? And on the bottom, can we charge more or charge less? Now, UberX, if the job is bring me from A to B, uh, UberX does the job better in general terms speaking than normal cabs because you have an app, you can see how they drive, you can already pay, so it brings you convenience, and they charge a bit less. So a dominant strategy is focused on all types customers. Of course, it requires heavy funding, but basically it's a strategy that can work very well. I see a tendency with the corporations that I work with that they look for premiumization, and then you are, can we get the job done better and, and also charge more? In case of Uber, you have Uber Black, more service, better car, luxurious car, etc. And they focus on underserved customers, meaning They see an opportunity to go premium because certain customers expect more, um, and that the competitors at that moment can't provide. Then if you look at the disruptive strategy, it's basically focused on non-consumers. So who are people that do not have access at this moment or cannot afford our services? And in the case of Uber Pool, That's a car sharing solution. So this last one is less of the focus of the companies I worked with. So I try to open up the different options and how can we differentiate from competitors. And, and the disruptive strategy is, in my experience, one that is most of the time overlooked. So can we help and get non-consumers into our, uh, business? The classic strategies which you probably know: exclusive distribution, exclusive supply, intellectual property, customer loyalty, network effects. 6. What's the exit plan? So basically, when are we successful? Are we going to integrate in the business? How do we involve our stakeholders? And this is also some, I think, not always thought through very deep. Um, so when are we successful? What's the exit plan? So one of the things I always think is that you should formulate, uh, when you are building your business, a monthly recurring revenue. So till what point does the team need to bring the innovation, and where can we see that innovation moves more into going execution? Now, this integration plan cutoff moment from the venture team to the business is something you really want to create with your business leaders. At least prompt their thinking already early so that we start having the conversation before we are investing a lot of time and money. As said, so involve relevant business partners early, um, because how vested are they in making this a success? And the more we involve the people up front, the more we think it through The more we understand business expectations and their agendas, the better we are prepared in scaling up later on, because the challenges start in general also at scaling up the businesses. Um, and how can we scale the innovation with the assets the business already has? So these are typical questions that we want to tackle already upfront, also in scoping the idea and the program, um, designing the accelerator or incubator program to execute and create a process that really involves the most important people early on. Team is everything. I already mentioned that before, but we really need to find— invest time in finding the right team members and personality. I always say that innovation is quite like a roller coaster. Things work out, things don't work out. There's always a new problem to solve. Certain people thrive on that and other people get miserable. And, and that's not a judgment at all, but You don't want to have the people that do not appreciate that in your innovation team because it will not work for both sides and the team. So really find time to invest, uh, and find the right team members and personalities. And also because of the fact that it might be that certain people are very good growing from zero to one, more the explorers, right, the searchers, the puzzlers, uh, the creative people. Uh, but at one moment we also need to make it repeatable. Requires a different set of skills, a different way of working and thinking. Um, and once we actually have proven that we can make money on a repeatable manner and have a certain profit at one moment in time, um, we need managers. So how can we execute and optimize? So these profiles change during the process from moving from idea to product on shelf or service online, whatever it might be. And that's okay. So it's good to change profiles at certain moments in time. And last but not least, spend time on leadership capabilities and manage the tensions within the teams and between teams and stakeholders. This is really my, my experience from the last 2-3 years. Um, and why is that? Because it's intense. The people from the corporation, the people that lead the programs, but also management. We go to new opportunities and new adventures as well on the personal and the business level. New formal and informal relations are created, which sometimes, sometimes also creates a new power balance within the group. Venture building is serious. It's about money, launching new products, the future of the business. So there are stakes as stakes are high. And also, in order to make venture building work, old processes need to die and some have to be saved. So this makes the whole thing of setting it up, executing on innovation and venture building, just an intense but very also joyful ride, I need to say. But it's good to be aware of this. And what does this mean for, for venture leaders is that you need to become more comfortable with your own fears and uncertainty, that you have a tolerance for hate, because certain people will love what you do, other people will don't. That's always the case. It's always also the case in life, probably, um, that you have a capacity to be alone, um, and that you can stand for the course that you are going, even and especially when the data is showing us the route on where we need to go. But sometimes there are a lot of pressures from multiple sides. So do we have the capacity to be alone? But also, as a venture leader, can we also, and are we able to take on the tensions, anxieties of other team members on our shoulders? So what I always think important is that there are no strange, good, bad, ugly tensions or feelings. We need to embrace them and work with them. And if it's to sum it all up, so focusing on the technicalities and people of your incubator is right mind, skill, and toolset, clear end-to-end process with milestones, alignment among the stakeholders that are vested, involve them early on, right leadership and team development, keep strategizing and exploring options for your innovation to grow, pay attention to your people, their tensions and anxieties, and prepare them for the roller coaster. Now, all these things will definitely deliver a better return on investment for your innovation adventures. That's it for now, and I'm very curious if it sparked a lot of questions and thoughts and ideas.

Awesome, thanks so much, Mischa. Um, I think that was great, very, very insightful. Folks, you can see at the bottom of your screen there's some emojis. You can hit that up. There's thumbs up, heart sign. Yeah, so okay, Misha, you're getting some positive reactions from the audience. Well, I think that was great. Guys, we want to switch over to Q&A. If you can start filling, queuing that up. There's a Q&A button right below the messaging. Button, just, you know, if you have a few questions, we have about, I would say, just shy of 10 minutes, uh, to be longer than expected. Yeah, we have 2 or 3 more, but I guess just before we jump, as we're waiting for some questions to come in, uh, Misha, let's quickly talk about your boot camp. I'll throw it into the chat, um, just for everybody who's on the call today and who's gonna be watching the recording. Misha is going to be hosting a venture building boot bootcamp with the Founder Institute. It's in about 4 or 6 weeks, I would say, plus in 2 weeks from now, he's hosting another panel event with one of his colleagues, so what I'll do is I'll share the link out to everyone, you can kind of see it there, it's fi.co/bootcamp/corporateventurebuilding, you should have it on your screen right now, please, if you're interested, like kind of do sign up. But, uh, Misha, do you just want to briefly talk about the Venture Building Bootcamp? Because you teased a little bit of what you're going to be doing, uh, with your frameworks, but it'll be helpful for everybody to get a good idea.

No, so indeed, so I, I briefly touched upon the 8 pillars that I think companies need to work on and invest time in to make their innovation activities successful. So I will dive into the, the bootcamp need in a couple of weeks, really per pillar more deep. And there are a lot of questions behind, and it, and it helps you to assess where your company is at that specific moment in time. So where do you think, okay, but we really need to put more time on the process and the metrics, and maybe a bit less time on capability development, because there we put effort. So it's really like an understanding of the situation as it is on the most important things that you need to have in place. So I hope to give you more clarity in that bootcamp on, let's say, create a very tangible action plan on what you can do if you are serious with setting up your new innovation programs.

Perfect. Well, thanks, Michel. Look out everyone, the link is in the chat, it's pinned to the top, feel free to check it out. All right, let's kind of dive into some Q&A, uh, where the first question is from, uh, John, I'll throw up on stage here, uh, everyone just if you want, please feel free to keep adding to the Q&A button, I'm just gonna bring them up as I see them, uh, but John's asking, my experience has been that securing long-term internal funding is critical for corporate venture building, would you agree with that? And thoughts on how to manage this aspect.

Yeah, well, thanks, John. So yes, I agree, um, and here I think it's good to make the distinction in, in different types of innovations. So if we really talk about venture building, which is in my definition we build a new business that is further away from the core capabilities and assets the company has, then it's very important to really sort of allocate a fund basically like investors, sort of to fund your most promising bets. And I've also been in the situations a couple of years ago that we were very successful with a new business model innovation— I need to say in this context— but that there wasn't a fund allocated to, um, to, to fuel the growth. So what happens then if then need their managers need to finance it from their own P&L, which is completely dilutive, of course. Um, so then you get stuck. So yeah, absolutely, when it's new business model innovations and venture building, you should allocate a fund when your team and your management is ready for that. But to make that more tangible, it should be related to a very clear growth ambition growth gap with a portfolio in place. So it makes it also more tangible— is where do we need the funds for, where do we see bets, um, and how do we going forward with that. I hope that helps a bit, John.

Thanks, uh, Misha. All right, I'm going to go through the next one. Ahmed from Cairo is asking, how do you envision venture building to align with corporate strategy in an innovation-driven organization? Well, yeah, fit within your innovation strategy is probably another way to ask this question.

Yeah, so how do you envision venture building aligning with corporate strategy? Um, well, how does the company see— if you, if you, if you define corporate strategy, basically how do we make money in the future on a longer time horizon? Where, how, how is it that we need to transform our business, yes or no? I think there are many known examples now in industries with the climate change and all different types of movements, um, that companies are forced to transform their core at one moment in time. Um, so I think it's good to, to understand how future ready are you, how is corporate strategy aligned to different scenarios in the future, and how can venture building play a role in bringing that future closer by. And it can be that you build your own venture. It can be that you do acquisitions, which large companies do a lot, or more often than building it themselves. But you can also partner with young companies, with startups and scale-ups. So I think it's really to understand how deep is the urgency for real transformation when you look at the core and re-engineer it back, and how venture building can play a role in building assets yourself. Because you want to build stuff yourself or acquire it when the assets are of mission-critical need to have it yourself, right? So I hope that gives a bit of a frame and context on the question.

Awesome. Uh, somebody DM'd me, so I'm just gonna— I wrote it in here and then, uh, threw it in there, but, uh, they're asking, do you find uh, there's a different process or methodology used for venture building for B2B versus B2C, or is it the same process?

Yes, well, the— it is different. So, uh, B2B— so basically the principles are the same, but the execution and timelines are more, uh, intense with B2B in my experience. And why is that? Because, um, the B2B is basically trying to build a service for a large company or a company But depending on how large the company is, we need to figure out who is the paying customer within that company and how does that buying process happen, right? We have procurement, we have finance, we have the management, we have a difference between who is signing off the deal and who is actually using the service. So logistically, it's more time to organize because we need to do more customer problem interviewing. And with B2C, it's a bit of difference because, um, in B2B you don't want to burn leads. In B2C you can do that a bit more easy. So you can find people B2C easier than B2B. And I think this, in timelines, that's the biggest difference. And both still need to prove the same thing: customer pain, sizable customer pain, relevant price points. So that's the same. But the execution is different.

Perfect. We have the last question here on team building. So how do you build a team when you're venture building within the organization? Do you assign roles internally or hire new people, hire an agency? What's your typical—

Yeah, so basically, from my own experience, because that's the reference point I have, And the type of innovation really matters. So most of the time, as I said, I'm working on how can I help to grow the core businesses through innovation, meaning that I always work with people on the client side. And that means that I need to have access to the business people on the client side. And then I look less for functional requirements and titles It's nice to have somebody from R&D and product and marketing or local markets, but I look more for the right type of mentality and personality. So are these people able to join such a roller coaster? Would they enjoy that? Because it will challenge the robustness of your personality, basically, right? So that is something that I always take into account. Um, but in that case, that if we work with a client, it's people from the client which we identify, prepare, and train, um, and then with team members of my company, which is more on the technical competence, like growth marketing designers, just to make small ninja teams that can move and execute very fast. And that's the combined way of how we most of the time execute. Another example is that when we do really new businesses like business model innovation then the team setup might be a bit different because you want to have also experienced founders, ideally from that business, because you can leverage their learnings a lot, their network. Um, and it's a longer game, so it just takes longer to build a new business, as you understand, than to create something that can be scaled within the mothership. So that's how we view it. Perfect.

I think that was a great question to end with. We have about a few minutes left, so Misha, thank you so much. I know this has been super helpful. I'll throw the message out there again for your bootcamp. We will see you in 2 weeks when you host your panel event as well. Hopefully we'll have the same audience or a little bit more, but it's been great having you. Any last piece of advice for the audience, anyone that's listening. We had about 70 people join, and now we're starting to see taper off, but there was about 100 and I guess 150 that signed up for the recording, so that this will also go out to them.

So I think it's just nice that the panel event would be nice for people because one of my business partners comes from a large corporation that actually where we met. So then we have the external and internal perspective at the time. I think that can be a bit more thought-provoking, also maybe deepen certain topics and questions you had in mind, but also from the internal perspective. So I think that would be very interesting if you can join. So hope to see you there.

Awesome. Yeah, we'll send out some information on that shortly, but that's also there. Okay, Michel, we'll wrap things up. Thank you so much. Thanks for everyone for taking the time. We'll break out for networking. Networking. Once we end this session, you'll see some tables. Jump on, network with each other. We still have about 46 people online, so I'm sure you guys can, you know, talk about corporate innovation, talk about with each other, you know, build some new relationships. With that being said, enjoy your evening or afternoon or morning, wherever you're dialing in from. Thanks again, Misha, and thanks again to everyone else for attending.

Okay, bye-bye.