Venture Client Model

Definition of Venture Client Model

A Venture Client Model defines the process, resources, and values that enable a company to establish and operate a successful Venture Client unit within a company. With a good Venture Client Model, a company is able to obtain strategic benefits from the startup ecosystem, fast and effectively, without investment risks.

A Venture Client Model encompasses a comprehensive approach to gaining strategic benefits from startups. It involves a systematic method for pinpointing specific, pressing challenges within a company and proactively seeking out cutting-edge solutions from startups. A Venture Client Model is not just about discovery but also entails rigorous validation of the startups’ technologies, ensuring they meet the company’s standards and requirements.

Moreover, the model provides a framework for effectively integrating these innovative solutions into the company’s existing systems and processes, enabling scalable and sustainable adoption through a non-equity-based partnership or by acquiring the startup. It goes beyond mere transactional interactions with startups, offering guidelines for cultivating long-term, mutually beneficial relationships. This aspect is crucial to accomplish a significant strategic impact through Venture Clienting.

Additionally, a Venture Client Model includes strategies for bridging the gap between internal teams and external startups. It facilitates seamless communication and interaction, ensuring a win-win relationship in alignment with the goals of the company and startup. It also supports that startup solutions can be integrated smoothly, at scale, into the operational dynamics and that they are embraced by the corporate culture.

This holistic approach ensures that a Venture Client Model is not just a method of procurement, but a strategic venturing tool for gaining competitive advantages and driving corporate growth through cutting-edge startup technologies.

Additional Readings

For a basic definition of the term ‘Venture Client’, see this short article and video.

To learn, what it means to be a good Venture Client, check out this article: What is a Venture Client company, and what is a good one?

Video: What is a Venture Client Model

Here is a brief video, in which Gregor Gimmy, who coined the term “Venture Client” and created a Venture Client Model that has been successfully implemented at multiple corporations including BMW.

What is the Venture Client Model, by Gregor Gimmy

Video transcript

What is the Venture Client Model?

The Venture Client Model can be understood through two key questions: Firstly, what is a Venture Client? Secondly, what encompasses the Venture Client Model?

A Venture Client is any organization or individual who purchases and uses a product from a “venture” (=startup). This is different from buying a product from an established company like Apple, as purchasing from a startup is riskier. The products may not be certified, as refined, scalable, have a fixed price, and generally carry more risks. Another aspect to consider is the risk associated with the startup itself. Even if the product is excellent, there’s always a risk that the startup may fail and disappear, impacting long-term service. This distinction is crucial to differentiate between purchasing from a well-established company and a startup. Hence, I coined the term “Venture Clients” – as they are venturing to buy riskier products from a riskier type of company: startups.

Based on this definition, almost every company on earth is a Venture Client. Most companies have, at some point, purchased from startups. For example, Apple has been buying from startups since its inception. There’s a story about Apple, when in 1994 Steve Jobs decided buying software from a small and then-unknown startup, now widely recognized as Adobe. Another example is HP, who became the first Venture Client of Cisco when it decided to adopt its networking technology in the early 80ties.

Every startup has a story about their first Venture Clients who began purchasing their products, which significantly impacted both the startup and the client.

Now, how do you become a good Venture Client? How do you scale your activities and make the process of buying from the best startups repeatable and efficient? This is where a model is needed. You need to define specific processes to identify which problems startups can solve best. You also need specific tools and resources to achieve this in a scalable way, so you can, for example, measure the impact of using that technology.

And that’s where a Venture Client model comes into play. An good on enables your company to become good Venture Client.