Creating and running startups as part of a corporate is hard. It’s because the whole organization of a corporate is heavily optimized on execution. And that is how it is supposed to be!
Startups however are searching. Searching for a business model that works and can only start executing when they’ve found that working model.
A startup can not run, before it can walk
To be successful in searching, the whole startup team needs to be able to search. From the product owner to the developer. You need people who are persistently flexible in their thinking. People that can accept that everything you think is true, is only an assumption until it is tested. To be able to keep doing that over a longer period of time, structure and a good framework is needed.
We usually work with two-week innovation sprints. We determine the riskiest assumption and see how we can validate or invalidate that assumption with the least amount of resources in the least amount of time. We keep track of the innovation progress in our own specialized software tool. It’s like JIRA for innovation. We can easily see what experiments a team is running and what they have learned in the past weeks. We can also determine where they are on their journey to product/market fit, based on our NEXT Canvas.
Because we keep track of their journey, we can also report back to a corporate’s innovation board. For early-stage startups, a KPI like revenue is almost impossible. So we look at other things. For example, learning/validation speed and number of solution experiments built are much more important to see how the startup is performing.
We are also a big fan of staged investments in corporate startups. Every time a startup moves towards the next stage, they can request an amount of money to get through that stage. Together with the innovation board, we evaluate where they stand and determine whether the team can move forward to the next stage, remain in that stage or even go back to a previous stage, based on the learnings. Making more decisions with lower investments per decision again lowers the risk of running corporate startups.
At NEXT Amsterdam we have years of experience in building and running startups and mentoring their teams. Our office is a healthy mix of both startups and corporate startups since we believe there is a lot of synergies possible.
Every corporate startup we co-create gets an experienced startup CTO and a lean startup expert assigned. If needed we even add a few developers and a (UX-) designer. Our specialists work together with the intrapreneurs to de-risk and speed up the journey to a working business model. That way we can assure that the startup team is optimized on searching and fast continuous experimentation. Because the more iterations a startup can do before it runs out of money or time, the higher the chance of success.
We sometimes compare running a startup with jumping off a cliff and building an airplane on the way down. You don’t want to spend your time falling down discussing the colour of the seats. You want to try as much airplane designs as possible because one of them is sure to fly!
Do you also want to co-create a corporate startup together with us? We’d love to tell you how we can help.