Venture Building 104: Venture Builders’ Quest for the Diamond— What is the journey for successful venture building?

Someone asked me ‘What’s the most effective process each startup should go through in venture building in your opinion?’ I paused before answering the question. I guessed the reason was that I do know the piece and pieces of the processes of venture building but I’m just unsure which is the most effective that will bring highest chance of success. That leads me to find the answer here and to write about some processes that was adopted by renowned venture builders, as an overview:

Founders Factory — From idea to startup in 5 steps

The following diagram was officially sourced from Founders Factory’s website. The following detailed the 5 steps in their venture building process.

Step 1: ‘Aha’ moment — who, willing to give up their C-level title and venture into the unknown.

Step 2: Verifying the idea — what should turn out are: strong market demand, no major notable competitor, wide potential beyond initial concept, people needed (it’s a need not a want) it.

Step 3: Founding the team — a crucial decision that will determine the rise or fall of the idea, it’s an irreversible hiring decision to make.

Step 4: Product design for market-fit — who are the key stakeholders or users, and what should it do for them, and these answers are found mainly through a problem/solution fit process.

Part of this involves identifying and interrogating the project’s riskiest hypotheses through a series of workshops with the product coaching team. This takes many of the questions posed in the investment committee deck, understanding what has been learnt, and what you might still be unsure about. The most important of all, would customers willing to pay for it?

Step 5: MVP prototyping — put to test for sales within a certain period.

Rainmaking

The following diagram was officially sourced from Rainmaking Japan’s website. That explained a 4-steps approach for corporate innovation.

Step 1: Scope — source for idea, identify talent and invest minimum for testing.

Step 2: Validation — tap into available networks for leverage, pivot and build the startup

Step 3: Scale — Expand team members, spin off to be independence and raise funds.

Step 4: Exit — Planned exits.

eFounders — The value of a studio is its platform

eFounders’ process divided into 4 different phases: inception, build, scale and growth. The Game Plan.

Step 1: Inception phase: about finding/validating idea and hiring co-founders. Monthly “Ideation breakfast” is organised for everyone to propose ideas. Maintain a pipeline of 20 new ideas per year. Worthy idea will go through a validation of 2-months, which include deep market analysis (sector analysis, competitor analysis), technical analysis (technology and POC), product creation (prototype and mock-up) and getting user feedback and tests around.

In eFounders’ Game Plan, during the Build and Scale phase, there are different types of processes: strategy, admin, tech, creative, product, marketing, sales. The Game Plan is made of 166 processes spaced out between Month 1 and Month 18.

Step 2: Build: Usually last 9 months, present MVP to pilot users (25 pilot users that use the product on daily basis). Lots of product, little marketing. Confirm the Product / Market fit and incorporate the company.

Here is the month-on-month process tasks in a nutshell.

Month 1: Define Profile of Primary Target Users/Customers, Review Primary Mock-Ups. Month 2: Write Copy Document, Choose/Set Up Tools. Month 3: Define Brand Values, Specify MVP. Month 9: Draft First Pricing Plan, Set Up Payment/Subscription Management Tools

Step 3: Scale: Test acquisition channels and transition to paying customers (Usually lasts 9 to 18 months). Marketing, PR, recruiting sales people. Active Monthly Recurring Revenue (MRR) and scale. Knowledge transfer from the studio to the founders’ team who eventually build their own culture.

Here is the month-on-month process tasks in a nutshell.

Month 10: Define Customer Support Channels/Tools. Month 11: Marketing: Define/Use Top SEO Keywords and HTML/Meta Tags, Recruit First Business Developer. Month 12: Choose/Implement CRM and Aircall. Month 14: Define/Implement Social Media Ads Strategy Facebook/Twitter, Upgrade/Upsell Active Customers. Month 16: Conduct Conversion Optimization and A/B Testing, Analyze Funnel Performances/Recommend UX/UI Changes.

Step 4: Growth — eFounders’ philosophy is that theirs startups become 100% operationally and independent after 18 months. If these processes are deeply anchored in startups’ daily way of working, it makes possible to build better, faster and bigger. The best evidence is that eFounders has proven with companies that successfully grow out from experiments.

As a conclusion, every startup studio seemingly have very similar approach on how they are growing the startups. It’s the secret sauce and complex recipe that is priced to the success. To kickstart a studio and reach an ideal scale of operations, the founders need to provide many resources, financials, team composition, defining procedures, metrics. With studios, planning ahead goes a long way.

To win the game, what is your game plan? or playbook? Let’s have a chat if you’ve already found one.