In recent blogs I’ve written about the importance of both small business management and entrepreneurship in sustained success. I’ve also offered some ideas for how to organize for new and innovative efforts within an existing small business and for how to fund them. With those posts in mind, I read this recent excellent blog post from Steve Blank as a challenge me to try to come up with similar points for growing a new venture within an existing small business (or within any business for that matter). Here goes…
A New Venture within an Existing Business Is a Temporary Arrangement to Search for a Business Model that Can Add Significant Value to the Going Concern
1. Use the knowledge and relationships your business has accumulated as the starting point, not the final answer.
2. You are doing something different. Venture team members don’t know what they don’t know. Send them out to learn.
3. Pair customer development with product development to find what works in the marketplace.
4. Assess the value of new ideas. Test and validate them with existing and potential customers, suppliers and partners.
5. Don’t assume your existing market is the right one for the new venture. Prove it.
6. Designate a member of the executive team to champion the new venture. Pick someone totally committed to its success who can make things happen when needed.
7. Expect the new venture to cause discomfort. Manage it proactively, especially if the project disrupts (threatens) some or all of your existing business.
8. Embrace failures and setbacks. Everyone will learn from them.
9. Apply insight from failure and setbacks to make your venture stronger.
10. Success depends on buy-in from investors (including lenders), owners and especially employees – whether they are part of the new venture team or not.
11. You wouldn’t expect a baby to bring home a paycheck; don’t expect the new venture to perform like an existing business.
12. Expect the new venture plan to change often and evolve rapidly; use milestones to manage development. Everyone needs to know what’s expected.
13. Challenge the new venture team to make do with minimal investment until there is confidence in the business model. Be prepared to invest more when the time is right.
14. Job titles, roles, responsibilities and compensation for the new venture team will be different from those in established parts of the business.
15. Communicate and share what you learn as broadly as possible within your company.
16. Not all new ventures prove to be worth continuing. If the market says stop, then listen.
17. Don’t let failure stop you from trying again. No established business can rely on the status quo forever.\
Karen Utgoff, principal of Karen Lauter Utgoff Consulting, is a market-oriented business strategist based in Amherst, MA. Learn more at http://www.utgoff.com.
© Karen Lauter Utgoff Consulting 2012. All rights reserved.