Webinar

Will Venture Clienting save Corporate Venture Capital (CVC)?

Welcome to our webinar recording where Venture Clienting expert Gregor Gimmy answers key questions about how the Venture Client Model can overcome the inherent weaknesses of the Corporate Venture Capital (CVC) model. You’ll gain insights from Gregor Gimmy as he explores the concepts, models about the future of corporate venturing.

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Transcript

0:00
my name is Sylvia I’ve been working with Gregor and twinson Pilots for the past four and a half years to help promote
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the Venture CL model I am hoping guessing that most of you know who
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Gregor gim is and what T and Pilots is but just in case Gregor would you
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introduce yourself and TR and Pilots yeah thanks syvia good morning to
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everyone thanks for joining I’m Gregor gimi I
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founded 27 pilots in 2018 out of BMW 27
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Pilots is a company that helps Venture client units or helps corporate setup
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Venture client units and helps corporate Venture client units to uh grow and
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become you know better and um and um and
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yeah so much about myself more my think during the conversation
1:00
so today’s webinar is called buy. invest will venture client save CBC and that
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first part of the title is actually a reference to your book Gregor what’s that book about and why did you decide
1:11
to write it well the um the the book is primarily about
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questioning the status quo of corporate venturing and uh and the way corporate
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venturing has been lived and defined finded uh over the last 20 uh 20 years
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by you know big academic institutions from a Harvard to a Berkeley to a
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Stanford but also by you know leading uh management consultants and uh and uh and
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corporates so that’s the main intention um what what the book does is not
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question the why of corporate venturing but how uh how it was how it was
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executed the the the the methodology and and the tools behind um behind corporate
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venturing and the book proposes a new way of thinking many books about
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corporate adventuring or articles or papers are more about how do we improve corporate
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venturing how do we improve the current way of doing corporate venturing and um
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the book is saying no we need we need something new correct we don’t
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you know it’s not like making the horse faster it’s you know we need to create a car correct we need something totally
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different in order to achieve the mission of corpor adventuring um better and uh so
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proposing that new way of thinking and and and also the rationale behind the book as well this new thinking was not
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born in in in a in in in Academia or in a vacuum or in you know in a brainstorm
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or research of myself it was was born out of my work at BMW so really in in a
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corporate setting I was uh trying to make corporate venturing better so BMW
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could benefit better from startups so the fact that it was born in a corporate setting and from here on it was adopted
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by multiple corporations across the world and it’s now also being taught at multiple Business Schools across the
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world this this um this I thought was you know um you know
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really my base motivation to put this all in in into writing in a book and um
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so was BMW the first Venture client or trying to tease something um has there
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been very famous Venture clients before you started with that term at
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BMW well that’s that’s um a very important question so definitely Venture client
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the term is new but the activity that describes um Venture client is not new
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so they have been Ventra clients by definition since the existence of
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startups um there was no Ventra client model there was no Ventra client unit but we’ll talk about uh that later and
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actually one of the main Inspirations while I was working at BMW around 2014
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so about 10 years ago was my time in Silicon Valley and in Silicon Valley I
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learned about the relevance of clients or the Venture clients for the startup
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ecosystem but most importantly I learned about the relevance of you know startups for you
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know corporates there and I saw that the corporations that were most able to
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engage with the best startups who were that this was really a key critical
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success factor right and one of those very
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famous people we actually prepared a a
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basically a quote from that person
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right so how and why did Apple get into desktop publishing which would become
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the max killer app I don’t know if you know this but we got the first Canon Laser Printer engine
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shipped in the United States at Apple and we had it hooked up to Alisa actually Imaging Pages before anybody
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before HP long before HP long before do but I I heard a few times people would
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tell me hey there’s these guys over in this garage left Rock Park you got to go see them and I finally went and saw them
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and um I saw what they were doing and it was better than what we were doing and they were going to be a hardware company
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they wanted to make printers and the whole thing and so what I I talked them into being software company and we um
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within two or three weeks uh we had canceled our internal project and a bunch of people wanted to kill me over
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this but we did it and uh I had cut a deal with Adobe to use their
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software right yeah those those are 50 seconds of
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of really really important uh messages for everybody listening and I think for really the whole corporate venturing
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world and at the end of the day States even if I’m apple and even if I’m
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Steve Jobs there are small companies out there that are better at what we are
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doing and what we need to do is we need to cancel what we’re doing internally or
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maybe just use whatever the startup is doing in order to improve and to be faster and more competitive uh in in our
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corporate setting and the emphasis here is really about us
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the startup technology becoming becoming U you know the client The Venture
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client all right so um before we dive further into it I’ll just want to give
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everyone um quick update on what we’re doing welcome to everyone who who’s joined um so before we get to the juicy
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question uh will venture client save CBC which might be a bit provocative for a couple of people we first want to
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establish a common base of understanding of what corporate venturing is and of
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what the Venture client model is so first we’re going to talk a little bit about the definitions we’re going to clarify what’s what and then the main
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part will be to discuss really the future of corporate venturing bra is going and how is a venture client model
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going to change this direction um as you can see we have enough time for Q&A at
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the end uh if if you have any questions throughout the webinar please use the chat we’re going to address all of your
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questions and uh yeah just this is this webinar is for you so
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uh if you have questions ask them that’s the best way I think to
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learn and to start with the definitions uh so we’ve heard CBC we’ve heard V
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client a lot already Reger let’s start with the basics what is corporate venturing what’s the goal be and why do
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corporate want to venture well when we think about
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corporate venturing the main thing we need to keep in mind is the goal behind
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this those two words because many times what we do mistakenly is to think about
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the activity of corporate venturing not the goal of corporate adventuring so the
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goal of corporate adventuring and that’s how it emerged is to gain competitive Advantage from startup Innovations
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that’s it and that’s an official definition that you can find across anywhere whether it’s the Harvard
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Business School whether it’s a corporate finance Institute um this is the object now
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today obviously there is you know an expansion of corporate venturing we’re talking about corporate
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venturing you building your own startups as a corporate so the inside out um so
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this is a new labor of of corporate venturing but the original corporate venturing goal and uh um in school is
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about corporate seeing that startups have interesting Cutting Edge technologies that can make a difference
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if I integrate and use this technology into uh um into my competitive position
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now why and that’s also important why is Corporate venturing relevant you know
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startups have been over the last 30 40 years the source of the most relevant
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technology Innovations whether it’s PCS whether it’s semiconductors whether it’s
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you know enterprise software whether it’s Pharma biotech anywhere you look um
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any any sector you look at and when you look at what are the main things that have been invented over the last decades
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you will see that most of that comes out of a company that was born in the startup ecosystem so to be able to
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engage with that startup ecosystem to draw benefits out of it synergies with
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that ecosystem that’s really the main goal of corporate venturing now the
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activity and that’s the white sentence um underneath the green one is you know
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it’s it’s in the past corpor ADV venturing has been synonymous with
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minority Investments it’s important it’s not just it’s it’s a specific type of investment
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it’s a VC investment so in the word of Academia corporate Venture Capital
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equals corporate venturing and um investment when they
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talk about investment in startups in corporate venturing it’s all about ABC
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type investment which means you own a noncontrolling minority
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Equity stake you have no special rights uh you have really no strategic
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influence over the startup um in this type of investment model so that would
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be you know the basics around corporate venturing right and then so you’ve
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mentioned already in 2014 at BMW you coin this new ter Venture client now
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what is that and how is it different to this corporate Venture Capital
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term okay well the main the the fundamental
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thought you know back then was really the goal to obtain a Strategic
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Benefit now you can only obtain a Strategic Benefit from a startup
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technology if you using correct the um the technology of
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the startup I mean you cannot benefit from a bicycle by buying an equity share in the
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bicycle company you can only benefit from the bicycle if you ride the bicycle
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right um so my thinking back then was um really it’s um it’s all about being
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being the user of of a startup and that’s when we talk about um um Venture
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Venture client um
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all right and so this is what it means to be a venture client but then why does
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it need a model particularly because if you say it’s basically of using it or
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purchasing the startup product could be just part of purchasing
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right yeah that’s what corporates intended actually before starting to
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invest um and what uh um what then the corporate saw is that that that this
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isn’t didn’t work you know first of all it didn’t work because it was hard for purchasing to find the startup the first
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place uh but secondly uh the purchasing processes were designed for purchasing
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Technologies from established companies and just like you’re using a different
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model to invest in a startup in comparison to investing in a publicly
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traded company um this is where you know the a new
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model for investment was born in the 70s called um Venture Capital the same logic
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you need to apply when trying to transfer and use startup
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Technologies that’s why um taking as a base the generic
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technology transfer technology adoption processes but making them specific and
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changing them specifically to fit the needs um of a startup this is what uh
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really made um the difference and here’s where we see is that if you apply the
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generic processes that a corporate has to buy and adopts Technologies it would take you about two
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to 5 years to bring in startup technology you would have a hard time finding the right startup you knew the
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qualities of startup will be low there’s little ability to measure the impact but
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if you have a good model um and the dedicated um specialized model around
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Venture cening this is where we started seeing that Venture cening really makes
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a huge difference in um in um in in benefiting from startups and the model
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that I designed back then at um at BMW which has been refined over the last um
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six years now with with 27 Pilots uh We’ve applied this model at multiple
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corporates um you know over 20 or 30 corporates and all very demanding and
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very uh very good corporates you know um in terms of their ability to you know to
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to execute whatever they they they do correct uh world leaders like BMW Airbus Bor Seamans um so this is a glimpse into
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the the essence of the model where you um you know Venture client unit is is um
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the model starts with intelligence corre starts with finding what are your problems you know that startup solved
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best and and is there really an offering in the startup ecosystem that can meet those benefits then it’s around piloting
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correct you need to validate this but the pilot is not just a demo session it’s not a pitch session of five minutes
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or 10 minutes it’s an in-depth validation of the startup technology in
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a real use Case by the real end user uh and not in a lab in some Far Away
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startup echosystem it’s bringing the technology into your home R&D department or into your factories or wherever the
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technology needs to um prove itself that it can make a difference and then the
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whole element around startup adoption now you want to be a non-exclusive client you just establish some kind of
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supplier relationship you want be an exclusive client you want to be the only one using this technology here’s where
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you uh go around and do a an acquisition a majority investment uh in order to you
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know have the exclusive rights over um a startup technology and so if that’s the
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driving engine of of the model the intelligence pilot and adoption what the model also needs to
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have and this also is different and this is also something that you cannot do out
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of normal Pur puring is uh you have to have a separate strategy in a structure
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you know you have to have a team A specialized team that has a special training um you want to place this in
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the right part of the organizational chart you may want to have Venture client units across the globe if you’re
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a global corporate you also need to work on the culture but not on the culture of
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becoming a startup but of the culture of embracing and understanding startups so that you generate a pull
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um for um startup Technologies and you also need to set up technology and data
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special software to run adventure client process to monitor it and to measure uh
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its impact so all those uh those five elements four elements are really
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relevant relevant um core elements of of a good Venture client uh
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Model H I mean this sound quite complex actually and not really like something
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that one person can do by himself or herself um and so I think that’s is also
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why back in 2015 after you established the model at BMW you’ve also founded a
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unit around this new approach um a venture client unit back then the BMW
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startup garage um can you walk us through the thought process and how what
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kind of function such a unit has within a corporate and why exactly yeah why
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exactly such a unit is necessary okay well first and foremost when I
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started in BMW in 2012 my initial uh job description had nothing to do with
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startups so nobody came to me and said set up a venture client unit or help us be better with startups I I set up um my
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my job my mandate was to set up a a new innovation team that did a long-term
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Innovation strategy at U at BMW and and as I was doing this and
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coming from from Silicon Valley with having lived there for many years and worked in the startup ecosystem while I
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was doing this initial job I under I I saw a gap at BMW uh what I called the startup Gap
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meaning there are many many thousands of startup technologies that if we would in
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bring them into BMW whether it’s it’s whether it’s the BMW product a car vehicles or whether
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it’s a process in it or manufacturing Logistics you know we could gain competitive advantages from using those
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novel Technologies faster than than our competition and here’s where I saw that
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you know the traditional way of corporate venturing couldn’t really meet
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these these expectations because it was not scalable correctly corporate Venture venturing based up on investment you
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limit it to three to five startups per year costs you Millions per startups this is nothing you can scale if you
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want to bring in hundreds um of startups um in investment just becomes
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the bottleneck rather than the facilitator of U of accessing startup
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technology correct this is then how you know this idea of venture clien thing
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came about where he said you know no need to invest purchase directly but do it in a
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different process and part of that model and the thinking part of the structural element
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that I just showed was well if if if I have a team that does nothing but this
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we will just be better if we if we have a team that does nothing but Venture client team we will just be better it’s
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kind of like saying you know if you if you do you know 10 sports you may be
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more or less good at those 10 sports but if you really want to be excellent at one of those Sports then you rather do
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just that Sport and nothing else right same here with Adventure client unit and basic thought was not only to
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have really more time that we could dedicate to the topic of bringing in
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great startup Technologies it was also you know being specialized and making
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sure that this department would follow a process and would have also a decision system
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that is um clearly shaped towards um the need of of of accessing a great startups
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and the third element and the thought about creating a unit
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um is to create trust and to Foster communication
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both inside BMW also outside BMW to communicate to the world and to the the
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BMW colleagues that this is Corporate venturing done differently that this is Corporate venturing that specifically
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targets the need of my colleagues at BMW which was to use startup technology to
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solve critical problems and it was also important to establish um a a unit with a brand and
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the name correct known as the BMW startup garage to to to communicate to
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the Venture um EOS system to startups and VCS alike that this is about
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becoming you know the the the you know the paying client the use of the market
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um for startups and and by that having the ability to attract better uh you
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know better better entrepreneurs to BMW H actually I want to add one thought
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to this um looking at that slide you mentioned there’s thousands of top startups um a corporate benefit from um
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but if you look at conventional CBC investment strategies they usually
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targeting startups with Technologies Innovations very close to the core
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business because it doesn’t really make sense for a construction company to
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invest in a software that’s that would
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digitalize uh HR processes something like that so but still these Technologies are in can corporates can
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benefit from these Technologies but through that investment um approach
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there’s no way that these startups would even be on the radar right I mean so if
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we look at the CBC approach from these thousands of startups is maybe hundreds
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who are actually interesting well corporates are missing out on top of that it’s as you mentioned
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quite uh Capital intense and I like that there’s already an
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overview of a couple of corporates that you through TR and Pilots have worked
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with have helped establish vure client units and looking at all these um but
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there’s there’s many more who have started to adopt the Venture client model since you left BMW and brought it
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to other Industries have you seen any limitations to this model in terms of particular Industries or um organization
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specifics if it’s a decentralized versus centralized uh corporate is there any
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place where the Venture client model doesn’t work well what one of my let’s
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say one of the weaknesses I saw in the corporate venturing model that’s driven by investment was the very fact that
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this is something for very very rich companies and uh because you needed a
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lot of capital and there is no financial asset that’s riskier than a
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startup a share and that’s why it’s called Venture Capital correct and venture capitalist
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we all know even the best venture capitalist they put money into 10 startups and five of those go bankrupt
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right so it’s a it’s a huge risk and this is really only large large
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multinational that have you know huge amounts of you know cash that have a
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very strong balance sheet they can afford to put aside you know the 500 or
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500 million to be able to play in the investment world because investing in
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the good startups is a very selective approach not even seoa is allowed to
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invest in every startup you know now the big Global Brands obviously they have
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you know access to good startups but not every startup um our um analysis has show that even
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large Global brands are only allowed and invited to invest in three out of 10
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startups they want to invest so this
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limitation of not having money of not having a strong enough Global brand to
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be invited into you know private equity deals with startups this is something
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that Venture client model does not have even if you are small and unknown
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company like we back then correct 27 Pilots we with you know just a handful
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of of employees we started using startup technology right away so we practiced
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Venture clien thing um obviously ourselves on the very first day so yes
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Venture client the model the approach of starting and using um using startup
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technology works for a company of any size um the important question here is
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if startups exist that have relevant technology for you so if your company
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is in a in a market or it’s strategic challenges
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are not supported or there’s no Venture Capital flowing into any of your
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strategic goals or strategic processes then Venture client makes no
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sense and because basically startups make no sense for you but I’m stuggling
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to find a company or a sector where startup technology does not play a role
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and this is really a change over the last 10 20 years is where there are so
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much more venture capital flowing into so many more startups that the scope of
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technologies that startups um are offering um is
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really it there’s really startup technology for every part of the value chain from you know the the core R&D
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product to the you know HR Marketing sales it departments
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correct so this is why Venture client model we works for every size and to my
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conviction also in every in every industry all right I mean sounds like
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vure clim makes a lot of sense let me ask the obvious question um since
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corporate venture capital is very risky has huge capital investment attached to
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it why did corporate start with it in the first place
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well yeah that’s um I got this question actually also many years ago from a
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colleague on BMW in 2015 and so now if corporate Venture cting is so good why
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is not every company doing it and well this I think what happens with many
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Innovations um you know they appear and sometimes you think how why did we do this before right um the um but there’s
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really a reason why corporate Venture Capital um um was born and and the reason really is
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that and I describ this in detail in my book is that back in the 70s and in the
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80s in the ’90s even and the early 2000s there was no easy way of finding
30:15
startups so the startup databases were you know hidden in the black boxes of a
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venture capital you know um PC or Hardware The Venture capitalists they had the
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lists they had the deal flow they knew which are the entrepreneurs which are
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the the the Technologies they they invested in and this information was not
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accessible publicly private VCS went to corporates and said give me
30:49
money for my fund and then I will allow you access to my deal flow they still do this today and you know this is a um and
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this just still normal practice what has changed today though is
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that you can find all deal Flows In publicly
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available private Equity databases like a pitchbook or CB inside and and and
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many others correct so the fact that today there are a databases where you
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can access startups no longer is that basically means that you no longer need
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a a CVC unit or a unit that positions itself as an investor in order to
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actually learn about the the fact which startups exist and which don’t all right um and now coming back
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to the question the title bill Venture client save
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CC why does CBC need saving or why do you think CBC needs saving or is there
31:56
actually evidence CC needs saving yeah
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well the fact is that um well CBC was born out of the reason to have access to
32:10
startups right because there was no public databases so you set up a CBC because that was a way for you to find
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more startups startups you know calling you and asking for your money correct
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but the condition for your CBC unit to
32:28
exist was to not lose money so the intent was strategic you
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know I want to gain access to Startup Technologies but given that you put so much Mill so many millions into your CBC
32:44
operation in capital the condition basically from the CFO side was you’re
32:50
not allowed to lose money which is kind of a strange thing in the corporate venturing investment
32:57
World correct correct um but anyway so the fact is now today obviously those CBC funds they’re measured continuously
33:04
what is the net asset value of the startups in my portfolio and as soon as the net asset value goes
33:11
down this is when the executive board goes and says hm maybe we need to stop
33:18
because now we’re starting to lose many millions uh because the value of the shares basically because it’s shareholder money correct it’s not
33:24
management money it’s shareholders money that they’re putting into startups high risk so the dependency on the valuation
33:32
of startups really the dependency on the volatility of this um of this U you know
33:38
part of the financial system um this is what makes um this is what we you know
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putting CBC in in in into a crisis modus every time you know the the the the the
33:51
private Equity markets um are having problems and as we’re seeing since 2020
33:57
22 23 the valuations of startups have gone down so have um you know the value
34:03
of the Assets in in corporate funds and that’s when uh when uh the boards start
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pulling start pulling the plug
34:15
and whoops one more um and this is actually what’s happening right now
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there’s been recently a couple of Articles um about exactly that fact that CBC
34:30
units are being closed down here are just a couple of um examples for
34:35
that um and there’s also a drop in active CBC funds there’s there’s been a
34:43
drop overall in the Capital Market but um it’s quite obvious to see that
34:49
there’s a there’s a decrease going on um and looking at
34:55
that is there any scenario in your opinion where it does make sense for a
35:00
corporate to invest in a startup definitely using Capital as a
35:10
tool to access startup Technologies is a must do it’s really really relevant but
35:18
the investment model is a controlling investment it’s not a non-controlling
35:24
investment so what you see here in this chart you know 50 um over 50% drop in
35:30
active CBC funds basically CBC funds stopped investing or were closed down
35:37
50% from one year to the next this
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happens because of the change in valuation of a startup not because the
35:48
quality of the startup technology has dropped by 50% so now this is obviously also a
35:54
great indication of great opportunity for corporates to do a controlling investment to acquire startups
36:03
so I do not see a scenario where a non-controlling investment in a startup
36:10
makes sense if the objective is to gain a Strategic Benefit and there may be
36:16
corporates who are just doing investment in startups for financial benefits right there more and
36:22
more corporate VCS who write on their website we are just like seya correct
36:29
and then we just looking for the financial benefit and this may be as it is but if your objective is strategic
36:36
now there are other corporates who say well there are some startups who where we can be the first investor or where
36:42
the startups needs capital and this really then helps a startup grow and I
36:48
would argue here that if a startup doesn’t get money from a private investor use a corporate should not
36:54
touch that startup because then you know if the private VC Market is not
37:00
interested in the startup it’s probably not not a good one and what makes you better in making that decision than
37:06
thousands of VCS um who have uh probably you know more dedicated more expert and
37:13
expertise around you know picking around the right startups there may be one small scenario for the very big
37:21
corporates that they can invest in startups after eventure client activity
37:27
with the startup so after they have seen that while this technology works and if this corporate now from
37:33
here on you know they have you know lots of capital and they can
37:39
opportunistically invest in the startup in order to benefit from the growth that also results from being a venture client
37:46
as long as this investment doesn’t kill the Strategic Benefit correct always got
37:52
to be careful that being a shareholder of a startup May kill the startup but
37:57
the very fact that other corporates no longer want to work with that startup correct because they are are afraid that
38:04
the startup may disappear U being acquired by the competition um here in in those rare
38:11
cases an investment after Venture client activity may make sense
38:18
and um with that in mind and looking at also some of the examples um we’ve
38:26
seen um on corporates who are using the Venture client um model already we do
38:33
see a trend that companies are using both both approaches that they set up a
38:39
venture client unit they have a venture client process in place but they also have a CDC arm and uh there’s a couple
38:46
of different types of of organizational structures there some are under the same
38:52
management some are completely different um and completely different separate units
38:58
um what’s your take on this basically going with two lanes um how do you see
39:05
this type of corporate venturing strategy setting on both forces but basically and um if so then what would
39:13
be your advice better under one umbrella or or better
39:19
separate but what we’re seeing is that if a company has no venturing
39:26
unit they def itely do not set up both correct they don’t go for Venture
39:32
client and Venture Capital what we are seeing is that they start with Venture client because it just leads to more
39:39
startups better startups zero Capital risk I mean you can’t beat that value
39:45
proposition now after doing this for many years Venture cting and they see the opportunity to then invest once they
39:51
see that the startup has been validated this is a trend that we see with a few really big companies now another type of
39:59
companies that already has a corporate venturing that’s investment
40:05
driven we’re seeing some of those adding Venture clien
40:10
thing but we’re also seeing that the investment activities becomes more and more just really financially driven
40:18
right so the so the really the leading let’s say the
40:24
most the biggest number of startups the biggest impact comes from the Venture client activity and the Venture client
40:32
now becomes the Strategic resource for the investment team so to speak in order to reduce
40:39
investment cost um and um and um and and
40:45
and risk correct so having both really is um I would
40:52
rather say you know the future is you know being a good venture clent with the
40:59
option to invest you know rather than what’s happening today is that you are a
41:06
corporate investor attempting to become also a
41:12
venture client so you do the investment first and afterwards you try to adopt
41:18
the startup solution and this is what we see is failing it’s costing a lot of money
41:27
um primarily because obiously the investment team doesn’t have the tools and the processes and the mindset to
41:34
think and act as a user because at the end of the day they are investors correct and this is what will drive
41:41
their activities and their decision making at this point I just I want to
41:47
address the audience to please feel free to use the chat if you have any questions if you have a different
41:52
opinion maybe also um let us know so if uh the company you work at pursues both
41:59
or one of these corpor venturing strategies um and we’ll be happy to answer all your questions at the end
42:07
um so now leaving CBC a bit to the side and
42:13
looking at the Venture client model uh 2014 you coined the term it’s 10 years
42:19
later where is the Venture client model today how established is it in Germany
42:26
Europe in the world well we’re still at the early stages
42:32
right um Innovations take their time and an anthropologist once told me that it took Humanity 30,000 years to adopt fire
42:40
so uh it won’t take 30,000 years for Humanity up Venture clien thing so we are looking at maybe around 50 to 100
42:48
Venture client units worldwide and there’s about you know a thousand CVC units so there’s still you
42:55
know room to make and we definely see that there’s no reason why there shouldn’t be 20,000 Venture client units
43:03
because at the end of the day every company that has over a billion Revenue
43:08
that would uh be a size um um that would require a a a dedicated uh department so
43:16
the the amount of CB Venture client units will in the future be you know 10
43:22
20 times bigger than the amount of CVC units that we are seeing um today but we are not there yet but I
43:32
bet that within the next 5 to 10 years the number of venture client units will
43:37
dramatically increase and can you maybe elaborate a bit on the indicators that you see today
43:45
already for the Venture client model becoming more established becoming the new standard in corpor
43:53
venturing well um first of all it’s really the data it’s just overwhelmingly
44:00
better you know it’s really like you know we discovered the airplanes and
44:05
before that you know we went by ship to New York or you know there was um you
44:12
know there was a fact machine back then but today we have you know email we have
44:18
slack correct I mean this is such a huge differ that just the effectiveness the
44:24
efficiency and the fact that you have you do not have to assume Capital
44:30
risk is um is is overwhelming and that will by itself really Drive Humanity
44:36
towards you know the better technology the better approach which is Venture cting what we’re seeing um in that that you know um um
44:46
you know validates this hypothesis is first of all the companies that are
44:53
accepting or adopting Venture cting are generally World leading companies like
44:59
BMW Airbus seens Bosch holim they’re all
45:05
world leaders in in what they do and so those companies are very good
45:10
at you know picking and implementing functional units or
45:17
business processes that make sense there’s no Venture client unit
45:22
that has closed at at those corporates not during Corona not after Corona and
45:29
certainly not during the current let’s say private Equity crunch that’s happening uh in the startup ecosystem if
45:37
any they’re thriving if any they corporates were just switching from from
45:43
one model to the next what we’re also seeing and that’s also an important trend is that Academia is more and more
45:50
active in researching and teaching Venture cting so at BW one of
45:57
my first activity in 2014 when I started the Venture client
46:02
unit was to find a master a a master student to write his thesis so I I we
46:09
this person his name is Daniel he’s in China today uh still working for BMW so
46:15
his uh he was the first Master thesis um around Venture clien thing and today
46:20
there are you know prob hundreds also PhD CES are starting to emerge there
46:27
Prof the other day I got an email from a professor who said I would like to dedicate my you know my my career to
46:33
researching um um Venture clien thing so this is definitely very important Trend
46:39
because Academia is also able of distinguishing whether Venture cting is
46:45
just a new bottle and the same wine or whether it’s really a better wine and
46:51
that seems to be the case yeah and the last one maybe also important is there a job Market emerging for Venture client
46:58
we see more and more if you in LinkedIn type in Venture client you would see job positions job categories um associated
47:06
with this with this activity which I think is also a a sign that Venture
47:12
client is here to stay and to grow um I want to add two things
47:18
regarding Academia yes for fact I’m one of these PhD students actually starting
47:23
to research and write about it and the second uh note that I have is that you
47:29
said okay Innovations do take take time that’s true adopting a completely new
47:35
approach takes time and yet if we think about um who’s
47:40
who are the who are pioneers who are early adopter we wouldn’t consider usually public institutions we wouldn’t
47:47
usually consider governments to be at the Forefront and as I know that is the
47:53
case actually with the V Klein model there are governments governmental in
47:58
public institutions who are adopting it can you maybe add a couple of words to
48:04
that yeah this is also a very important point because many governments are seeking an answer to how can I replicate
48:12
Silicon Valley not because they like Silicon Valley of the climate and because it’s
48:17
very beautiful but because they see that you know very very important companies with very high quality jobs are emerging
48:24
out of Silicon Valley again and again you know semiconductors you know PCS you know biotech and so on
48:32
so governments when they look into Venture clien thing they are actually
48:40
supporting what makes Silicon Valley successful which is corporates who know
48:46
how to use and adopt startup Technologies and um and so by by you
48:54
know supporting the growth of of venture cening and the adoption of venture cening is really also supporting the
49:02
growth of the local startup ecosystem on top of that added benefit it also helps
49:07
the public administration to become more efficient as they will be using startup
49:12
Technologies faster and uh and then this is also you know obviously a strong objective um of of governments to you
49:20
know to provide better more effective efficient services to the citizens
49:25
absolutely I think everyone who’s ever waited in line in a public institution
49:30
can agree on that we do have two questions in the chat the first one from Miro who wants to know the transition
49:37
from a successful pilot to implementing and scaling a startup solution within a corporate setting appears to be one of
49:43
the most significant hurdles at Venture cting do you have any recommendations on how to tackle this challenge I’m going
49:50
to pull up the process y well it’s one of the most significant
50:00
hurdles in adopting in so so so any new technology
50:07
faces strong challenges in getting adopted right so it’s not so much the hurdle of
50:12
venture clien thing because what you say what we say is Venture client is needed if startups have
50:19
relevant um if s have prevent technology so now you need to obviously fine-tune
50:26
your model to make this adoption part um work and one of the most critical
50:33
elements and what we seeing at companies that Implement Venture clien thing but
50:39
you know without a good and solid uh process and model behind is is that they
50:44
at the end of the day lack the ability to
50:49
Define and select the right problems so think of this example if you
50:56
are a car company and there’s a startup who has a technology that allows to charge the
51:02
battery in 3 minutes to a th000 kilometer range at a cost of
51:10
50 how difficult do you think will the adoption
51:15
be it you know nobody will say oh I’m not adopting this battery because you know who needs a 10minute Char battery
51:22
to charges in 10 minutes so but being able to identify Y and then
51:29
also calculate what is the benefit by solving this problem even before you go
51:36
into the startup ecosystem to do this work well at the beginning and to question the internal
51:45
colleagues why do you want to adopt the startup tell me what’s your urgency
51:52
behind that what’s your why are you not doing this yourself correct if you do ask those questions at the beginning
51:57
during the discovery startup intelligence phase then the adoption will be um significantly higher and we
52:05
are seeing adoption rates north of 50% at the Venture client units we are setting
52:11
up uh I want to add on that is that I think key is first of all to yes have a
52:18
very clear process that weeds out topics that are not relevant also startups that
52:24
are not the right fit you know all oftentimes it happens that someone comes and says like oh I found this great
52:29
startup let’s do a pilot with them but like are they really the best in the market are they the best fit um and the
52:37
other thing is and that’s where we come to the uh unit again it’s
52:43
um if you have an infrastructure in place within the company to adopt techn
52:52
startup Technologies it’s a lot easier so yes probably in the beginning you’ll have to do a lot more convincing you
52:58
have to do a lot more talking but the more it is um established the Strategic need for
53:06
startups and how the Venture clent polies works the easier it will get so I
53:12
don’t know you know if you’re just starting out with Venture client because then I can imagine that this is a bigger hurdle it does get easier the better
53:19
connected the better established your Venture client unit is within the company but feel free to yeah J us and
53:28
Hugo has a question coming from a Founders and a corporate perspective um
53:33
he sometimes has a feeling that young Founders fear corporate Venture cting
53:38
because they are expecting more loss of Freedom regarding their ideas how would
53:43
you comment on that and where could this image problem come
53:50
from well the image comes from um you know really that that startups have ex a lot
53:59
of bad experience with let’s say bad Venture clients right so you’re starting
54:05
a company because of your clients right first of all you know you’re not starting a
54:11
company for yourself you you have a product that solves a problem at your
54:17
client’s company and and they want to give you money for it which is revenue
54:23
which is growth for your startup now in the past so a good Venture client you
54:28
always have to make sure that what you’re dealing with is a good Venture client unit because obviously as a client you can be you know pretty
54:36
nasty to startups and um the model that we
54:41
Implement with uh with corporates is to say in order to be a good Venture client
54:47
doesn’t mean you’re good to the startup it means you’re good to yourself but if you want to be good to
54:53
yourself you need to make sure that the startup is good because you won’t make the startup any
54:59
better so if the conditions you propose to the startup like strangling them into
55:06
into a strange contract uh like demanding IP like some sort of strange
55:13
exclusivity um um requests um some some veto rights I mean you can obviously as
55:19
a client you can put anything into a contract now you need to make sure that
55:24
you know the model they’re run running is a good one and um and we think as the
55:31
number of venture client units increase we will also see a ranking of of
55:37
corporates who are are good at that and those would be the ones that startups
55:42
will will contact First and will prefer over other clients and and to add on that Hugo so
55:51
there’s actually a very funny um example from BMW um with the gaming startup air
55:59
console they’ started out traditionally in the gaming industry um they were
56:04
meant to Revolution their idea was to revolutionize the living room and where
56:10
you would play games and BMW reached out to them about if their solution would
56:16
also be would be possible to implement that within the car as well um which is
56:23
not something that they had on mind at all at the beginning they were like no no no all agency issues and oh no it’s
56:28
not going to work and that’s the market is way too small we want to reach the gaming uh Market but they did go with
56:35
that and now they have their there’s a huge success story you can look it up um
56:41
they are they were the first together with BMW to really Pioneer in car gaming
56:47
um and so actually when you look at what Gregor said that if you’re a good corporate
56:54
Venture client if you don’t um expect exclusivity actually having such an
57:02
established experienced forit giving you insights and what the market wants
57:08
there’s nothing better for a Founder than getting that direct feedback and getting that um inspiration on how to
57:15
make your solution better so that people actually want to buy
57:20
it this ansers it I don’t know where the image problem comes from probably
57:26
because there’s just a huge cultural difference in between um yeah to find we’ll we’ll help you
57:33
fight for a better image as well all right if there are no more questions I
57:39
do want to address um the title of the webinar one last time and and in that case I want to
57:47
address the first part by don’t invest I hope we’ve answered the question if
57:53
Venture Klein will save CDC optimistic at will um hope you are too and in terms
57:59
of that first part Gregor’s book we did promise that we’re going to raffle three
58:05
of Gregor’s books among all participants um I think we went with a bit of a
58:10
different route Gregor if you want to explain yeah there is this startup or
58:17
that former startup called Amazon who revolutionized the world in ’95 with a lot of interesting um you
58:25
know um um things and one other thing is that you can as you publish your book
58:31
there you can you know also have a promotional promotional activities where
58:37
people can you know order the book for free so uh for limited uh number of days
58:45
so um we will share the link to the book you can order it for free till till
58:52
Friday I’d be looking forward um if many of you order this book and also share it
58:58
with anybody you think who can benefit from this book and um if you leave an
59:04
honest review that would also be uh great
59:09
and this will then help make um the second edition of this book
59:15
better Perfect all right so I hope all of you are already on Amazon downloading
59:21
your um free ebook version in case there are still any questions please feel free
59:27
to reach out to us um we are happy to answer also follow-up questions also
59:35
once you’ve read the book if something comes up um reach out to us via the LinkedIn messaging uh service or here
59:42
via email and thank you so much for joining thank you for your questions and your interest in the Venture client
59:48
model uh have a lovely day and hopefully see you soon thank you very much