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:
Let’s dive in:
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Mistake #𝟏:
Go for mass markets.
Too often, board members choose to focus on the most significant markets based on desk research.
They think the biggest markets bring in the big bucks.
However, you only end up chasing your tail. These are existing markets, and you will only compete with others.
Instead, you should be focused on finding and creating new markets or categories.
This leads to paying customers, a great customer experience, and a product or service that could scale rapidly.
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Mistake #𝟐:
Only focussing on market share.
(Especially now that capital is not as cheap as it was in the past years).
A good innovator can grow their market share.
A bad innovator will grow their market share while losing a lot of money.
But a legendary innovator can grow their venture profitably.
Please don’t get confused: a significant market share is good, but it’s far from what makes the most difference.
Focus on growing your market while staying at least break even.
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Mistake #𝟑:
Scaling your marketing and sales efforts too soon.
Until you’ve reached a profitable customer acquisition process, don’t take your eye off the ball.
Test and iterate until your reach a ratio of;
Customer acquisition costs: 1
Gross margin: 2.5
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Mistake #𝟒:
Focus on exploring a business model too late.
Innovations will only become successful if you have a great product and a working business model.
Don't build a great product nobody wants to pay for.
It's an old and often repeated wisdom in innovation, but most innovators still need to act upon it.
From the get-go, test your product AND business model assumptions.
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.
🐋
