It's best to learn from mistakes that others make so you don't have to.
Here are four mistakes that are made within corporate venturing:
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Letβs dive in:
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Mistake #π:
Go for mass markets.
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Too often, board members choose to focus on the most significant markets based on desk research.
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They think the biggest markets bring in the big bucks.
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However, you only end up chasing your tail. These are existing markets, and you will only compete with others.
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Instead, you should be focused on finding and creating new markets or categories.
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This leads to paying customers, a great customer experience, and a product or service that could scale rapidly.
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Mistake #π:
Only focussing on market share.
(Especially now that capital is not as cheap as it was in the past years).
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A good innovator can grow their market share.
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A bad innovator will grow their market share while losing a lot of money.
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But a legendary innovator can grow their venture profitably.
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Please donβt get confused: a significant market share is good, but itβs far from what makes the most difference.
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Focus on growing your market while staying at least break even.
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Mistake #π:
Scaling your marketing and sales efforts too soon.
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Until youβve reached a profitable customer acquisition process, donβt take your eye off the ball.
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Test and iterate until your reach a ratio of;
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Customer acquisition costs: 1
Gross margin: 2.5
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Mistake #π:
Focus on exploring a business model too late.
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Innovations will only become successful if you have a great product and a working business model.
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Don't build a great product nobody wants to pay for.
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It's an old and often repeated wisdom in innovation, but most innovators still need to act upon it.
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From the get-go, test your product AND business model assumptions.
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Let people commit to your vision and proposition.
It's hard, but it is possible.
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Don't create unicorns,
Let's breed blue whales.
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