Corporate Venture Building: 4 Tips corporates should know before taking their first steps

Photo courtesy of Futurelabs Ventures.

With the need for rapid innovation surging, corporate venturing has emerged as a leading tool for companies to incubate and test new business ideas before transforming them into viable ventures.

That said, not all business ideas make for sustainable business ventures from the onset. To this end, a venture validation sprint will enable decision makers to decide which venture to pursue.

As part of EDB’s Corporate Venture Launchpad (CVL), a pilot programme to help corporates launch a new venture from Singapore within six months, global appliance company Electrolux partnered one of the programme’s appointed venture studios Futurelabs Ventures on a CVL sprint.

During the sprint, corporates, like Electrolux, partner with an appointed venture studio to apply venture-building methodologies to test and transform potential ideas into an investible business over an accelerated period of time.

After going through the CVL sprint, Electrolux’s Ranga Govindan, Head of Business Development, and Mergers and Acquisitions for APMEA; and Jorge Rosario, IT lead and Organisation Change Management, APAC and MEA; Futurelab Ventures’ Tamanna Dahiya, Venture Partner, and EDB New Ventures’ Alvin Cai, Vice President, sat together to share their insights on key learnings from the experience.

Their 4 tips: securing buy-in from regional and global management, empowering the right intrapreneurial talent, examining grounds-up opportunities in the region and earning external support from trusted partners.

1. How to Secure Buy-Ins and Support for a New Venture

Eletrolux's Ranga Govindan shares that a venture team is more likely to be able to secure support and resources if it is seen as a strategic fit. He explains, “[The new venture] has to fit with what we are trying to do as a company in terms of strategy and in terms of how we see our business going forward.”

“As a company, we do have a practice of driving innovation to bring better product experiences to the market as well as driving better business models that can help us get closer to consumers. So, when we apply this lens, it is really what helps us identify the right [corporate venturing] opportunities to go after.”

Govindan also notes that participating in the sprint has allowed the company to leverage some of the learnings it has gained from prior corporate venturing experiences in other markets such as Europe.

2. New Venture Building – An Opportunity to Foster Intrapreneurial Talent

Besides leveraging past experiences, Electrolux's Jorge Rosario adds that being part of the CVL programme presented Electrolux’s existing talent with an invaluable opportunity to grow their skills.

“Having this experience of building a venture from scratch helped a lot of the [company’s] internal talent to develop new skills and to grow within the company.”

When done right, embarking on new venture building can also help companies to attract crucial manpower and expertise needed to transform a new venture into a viable, thriving business, adds Rosario.

That said, EDB New Ventures' Alvin Cai stresses that it is just as vital for venture teams to be given autonomy to make tough decisions. “At a certain point, the control and the running of the new business should be given to the venture team – the ability to think like an investor, to collect the market data that is needed to make an investment decision to build a new business. But also, allow your founding team to build like an entrepreneur, is going to be key.”

3. Move Fast and Seize Grounds-Up Opportunities in the Region

Embarking on the validation sprint essentially enables venture teams to give conviction to their business ideas and move fast to harness opportunities for growth.

Cai explains, “Corporates rely on market validation and the data collected [to test the viability of a new venture], which gives conviction. And with that conviction, corporates can move very fast to unlock the advantages and resources needed and that is what we have seen happen with this sprint.”

Being situated in Singapore also gives venture building teams the added advantage of riding the waves of change to devise solutions for regional issues and cater to unmet needs, explains Govindan.

“What digitisation is doing across the region is it’s making it possible to solve a lot of these problems [and give rise to new] opportunity to pursue new ventures, new business models, and really solve some of the problems that are unique to this region. I think that's really the opportunity that we must be willing to pitch to our global boards.”

4. Earning Support from Trusted Partners

Through this sprint, Electrolux leveraged its partnership with EDB New Ventures and FutureLabs Ventures to go even further by deepening their insights into venture building experiences. “From a sponsorship point of view, EDB acts as an enabler via the Corporate Venture Launchpad programme [by embedding] a venture builder from the start and that really helped us to build momentum and learn from other experiences.” shared Rosario.

Participating in the sprint also accelerated the building process for the Electrolux venture team to tap on EDB New Ventures and FutureLabs Ventures to uncover how scalable a potential new venture might be and if there were prior learnings from previous attempts at a similar venture that the team can adopt.

For corporates keen to embark on their new business building venture, EDB’s Corporate Venture Launchpad is an ideal starting point. Stay tuned for the second edition of the programme with enhanced features in the later half of 2022.