We help visionary CEOs and business leaders create new engines of growth
The Problem
There used to be a time when companies could grow by simply executing their existing business models. Those days are over.
Today, technology, changing customer behavior and new market alternatives are disrupting existing markets at alarming rates. At current rates of change, 75% of the companies on the S&P Index will be replaced by 2027.
Technology can give new entrants an advantage. It seems unlikely, but entrants that develop disruptive innovations nearly always win. If you are an incumbent, this is a problem.
For companies to survive and grow in this environment, they must develop new business models outside their core businesses. They must venture into the unknown.
The problem is, established companies are not set up to create new business models. They are set up to execute existing business models. The people and processes that make them great at execution also make it difficult to do new things that are outside their existing business models.
The most common source of failure for established businesses is that they fail to understand the difference between executing an established business and creating a startup business. This fundamental lack of understanding causes them to apply their existing processes and personnel to a new venture area, which is a formula for glorious failure.
The Solution
We build startups for corporations. We do this by assembling a team of experienced entrepreneurs and providing them with the tools and incentives to build great businesses that become new engines of growth for the sponsor company.
There are three primary elements of our secret sauce.
Experienced Entrepreneurs
We are not consultants. We are entrepreneurs. All of our project leaders are multiple startup founders with exits. We have built successful companies from scratch and we apply our skills, knowledge and experience on your new business idea.
Proven Methodology
We’ve developed a proven method for finding product-market fit and scalable paths to Customers. This process created five profitable startups in a row and generated $1.5BN in incremental market cap to AT&T Wireless’s business in 90 days.
Aligned Investment Model
We believe in the power of equity incentives to align interests between entrepreneurs and investors. We prefer to run our projects as a newco with a sponsoring company investment. This provides the necessary alignment and motivation to attract the best entrepreneurs.
How Does It Work?
While every situation is different, our typical engagement model has the following phases.
Problem Validation - We work with the management team to define possible problem hypothesis. We test this thesis using our problem validation methodology supported by qualitative data from Customers. This is typically a fee-for-service project.
Initial Business Model Thesis & Opportunity Assessment - Once we’ve defined the problem we are solving and who we are solving it for, we develop ideas of the best way to solve the problem. These innovations form the foundation of our business model thesis. If the sponsor agrees with our approach, they make an equity investment into a newco that we create, run and manage.
Startup Building - We assign an experienced entrepreneur as project leader & CEO to the startup business. We would with the CEO to build the team and run experiments with Customers to test and validate our thesis.
Exit & Integration - Once the business model is proven and working, the sponsor decides if they want to purchase the startup and integrate it into its existing business as a new engine of growth. If not, the startup raises external capital and continues to pursue an exit to generate a return for the sponsor.
