Step 1: Assessing Needs and Capabilities
Before starting any venture, it’s good to have a plan. Venture Building can be applied in various ways, depending on the risk of disruption, perceived opportunities for innovation, and internal innovation capacity.
Assessing needs and capabilities is the first step in planning and organizing the venture building process. To make this process productive, we have developed our own method for assessing needs based on modern criteria. You can access the assessment questionnaire via the link.
When assessing needs and capabilities, we consider three groups of criteria:
- Risk of Disruption
- Business Performance
- Internal Innovation Capacity and Capability
The risk of disruption depends on the defendability of your business model, or its strengths and weaknesses compared to competitors. The assessment reveals how healthy or endangered your business model is in terms of performance. Through business performance, we assess the ability to execute and achieve results relative to market conditions and external factors impacting the business model. Performance is best assessed by analyzing market trends and events in relation to changes in your company’s market position.
The third dimension helps understand how ready you are to innovate, considering the knowledge, experience, and availability of your company’s employees to work on innovation projects. Innovation capability and capacity are crucial for assessing these opportunities.
As a result of this tool, you will get an overview of these three dimensions of your business model and a final suggestion on whether and how to approach a venture building project.
Once you have defined the needs, it is possible to design and set up the venture building process within the innovation process. In the process of creating the innovation process, choose the method for selecting members of the core team who will start looking for new opportunities in the next step.
If the assessment tool suggests that you approach the project independently, you likely know what to do; otherwise, you can contact us for assistance.
2. Searching for New Business Opportunities (Team of 1-3 members, 30% of time)
Is it time for creativity, methodology, instinct, or something else? All of this, along with much more, is necessary to find and select the right business opportunities.
Building a portfolio of business opportunities occurs through ideation and research. The goal is to select a number of business opportunities that have the potential for market success and are ready for further testing. At this stage, the focus is solely on discovering opportunities that can create demand, i.e., satisfy a need or solve a problem for users.
New business opportunities are typically sought through:
- Changes in user habits or needs
- Technological innovations that enable the creation of new value
- Regulatory changes that alter the business environment
- Social trends and societal needs
Business opportunities are realized through business model innovation. A business model can be innovated by adapting the existing model and its components or by designing a completely new business model. Although the term “innovation” is often associated with technological innovations, they are not a prerequisite for an innovative business model capable of disrupting the market.
At the end of this process, the team should fully understand the user, their behavior, and context.
Searching for business opportunities is often defined by the company’s strategic guidelines, current market share and customers, specific knowledge and skills, and available resources. These constraints are also an advantage as they enhance focus and provide valuable resources for later realization.
In addition to internal human resources, valuable insights can come from thinking outside the box and perseverance in following the defined innovation process. If you need help guiding this phase, feel free to reach out.
3. Designing, Testing, and Adjusting Business Models (Team of 3-6 members, 50% of time)
Uncertainty and risk are two different dimensions that often go hand in hand. Reducing both is the task of testing and validation in the third step.
Most of the promising business opportunities from the previous step will fail. This is a harsh reality. The sooner we identify and eliminate unsuccessful ones, the smaller the level of uncertainty and risk.
Successful innovators will spend most of their time researching the business opportunity in the stage of testing and adjusting the business model. By taking a cautious approach, they preserve resources while expanding their knowledge about users and the market, leading to the discovery of greater value.
Each business opportunity is broken down into assumptions; the riskiest ones are selected and tested through experiments directly with users. Business model testing is done through dozens of iterations. Validating the desirability, feasibility, and sustainability of the business model is done by testing each of its components. A series of iterations leads to changes in assumptions and can change the entire business model.
The goal of this phase is to prove user interest in solving a particular problem and achieve problem-solution fit. Additionally, it is desirable to understand the profit potential of the opportunity.
At the end of the testing phase, a decision is made – invest or abandon.
4. Accelerating New Business Models (Team of 6+ members, 100% of time)
A huge amount of work has been done so far, but to declare success, it is necessary to justify everything invested through profitability.
Setting Prices and Pricing Tactics During a Crisis
The business opportunity has become a business model, and from the proven business model, a profitable business has emerged. Product-market fit indicates readiness for scaling, i.e., investing in business development through customer acquisition and expanding operations – this is the goal of acceleration.
How best to create demand and grow? This is the question in this phase.
Although testing is no longer mentioned in the name, it is still present at the same level. Every step, feature, or value proposition is tested before a decision is made.
The goal of the process is product-market fit, i.e., a business model that meets market needs and is ready for scaling.
If desirability, feasibility, and sustainability have been proven, we have created a business model that becomes profitable. The team now grows, new roles are created, and the commitment of all members is maximized.
The best time to take the first step is now – we have created a tool that allows you to assess your innovation capacity and needs, and find out if Venture Building is the right solution for you.
