Why Do We Need Venture Builders?

Venture builders stem from a radically simple yet profound idea: people need each other to achieve the greatest goals. An entrepreneur embarking on a startup journey immensely benefits from the resources, experience, and influence of established companies. However, historically, there has been a gap between entrepreneurs and corporations. Entrepreneurs and corporations lack a common language for effective communication and mutual trust.

Recalling my first startup experience, when it reached its initial success milestones, I was approached by experienced entrepreneurs offering help or partnership. Yet, I perceived their approach more as a threat than an opportunity. I was naive. But I was also right to be cautious.

The issue is that, in the absence of a standardized model of agreement, collaboration is difficult to pull off. For an entrepreneur, their startup is not just a business, but a culmination of years of hard work and emotional investment. Thus, the idea of sharing equity with someone who hasn’t been part of this journey can seem inconceivable. A clear agreement model, delineating contributions, roles, and commitments of each party would facilitate collaborations that might otherwise seem impossible.

Moreover, the challenge has been to create a shared space where corporations and entrepreneurs can collaborate without overstepping boundaries. As a startup founder, my first office was a garage, a symbol of freedom and autonomy. The prospect of cohabiting with an established corporation, with its rigid schedules and protocols, was unappealing. A dedicated space, designed for and by entrepreneurs, offering independence yet the benefits of proximity to a corporation, would have been a perfect solution.

In time, my team and I discovered solutions to these challenges. These solutions can be summed up in two words: venture building. It is an idea that existed decades before we paid attention to it. This solution emerged as the ideal framework, language, agreement model, and space for established corporations and independent entrepreneurs to innovate successfully. Moreover, it seemed a concept that started to take off and gain attention.

Venture building can reduce some risks and inefficiencies associated with entrepreneurship when the builder provides useful resources and sound governance. It does not remove the underlying commercial risk.

What are Venture Builders Used For?

Venture builders primarily function as conduits, channeling the resources and expertise of seasoned teams and established companies to entrepreneurs, the real drivers of innovation and creative decision-making. This symbiosis between entrepreneurial spirit and corporate robustness can amplify the strengths of both.

Venture builders may also help investors evaluate and support a portfolio of startups through shared methods and oversight. Experience and structure do not guarantee that any venture will succeed, and investors should assess each company on its own evidence.

However, it’s important to note that the true value of a venture builder lies not just in experience but in its methodological approach. Experience, while invaluable, is not foolproof; even seasoned entrepreneurs are prone to errors. The real strength of a venture builder is unleashed through a systematic, methodological approach that forms the backbone of all management activities.

Why is the Time Right?

The venture building model’s rise can be attributed to several factors. This chapter identifies seven possible contributors to its proliferation.

1. Entrepreneurs are More Ambitious

The act of creating companies has undergone a radical transformation in the new century. A significant cultural shift in entrepreneurship has taken place, with public and private institutions, political parties across the spectrum, and individuals of all ages viewing business creation as an almost heroic endeavor.

This change is driven by inspirational success stories like Facebook and Google. The idea that anyone could establish the next billion-dollar company, a “unicorn”, has become widespread.

2. Startups are a More Attractive Investment

Traditionally, investors have gravitated towards low-risk assets, with real estate being a prime focus for many. However, the 2006 real estate bubble burst challenged the notion of real estate as a foolproof investment. Concurrently, the same decade witnessed the rise of highly profitable business models, the renowned unicorns.

Venture builders offer investors one route into the startup world, but do not remove the risks associated with startup investment.

3. The Innovator’s Dilemma

For every inspiring Instagram or Apple, there’s a cautionary tale of Kodak or Nokia, underscoring the struggles of large corporations to adapt and innovate. Venture builders offer one approach to addressing the innovator’s dilemma.

4. Venture Building Has Success Stories All Over the World

Venture building is practised by organizations in many countries. Examples named in the original manuscript include Antai in Barcelona, We Are Builders in Rotterdam, Byld in Madrid, Founders Factory in London, Mamazen in Turin, and UNIQ in Andorra. Their current status and results should be checked directly before using them as precedents.

5. We Live in More Diverse and Inclusive Societies

Today’s corporate culture has become increasingly inclusive. Greater diversity can broaden the perspectives brought to innovation and collaboration, although outcomes depend on how teams and institutions work in practice.

6. The Traditional Concept of Employment is Less Attractive to Talent

Some people seek professional careers that resonate with their personal values and beliefs. Venture builders may combine support from an experienced team with the autonomy of creating a business, but the balance varies by builder.

The convergence of entrepreneurial practices in large organizations and more structured management among startups can make agreements between the two easier to form.