“Rahul, what do you do?” After spending a decade in strategy and innovation, it’s a question I still struggle to answer. I am neither a pure breed consultant nor an entrepreneur. Instead, I am a venture builder.
I define venture building as converting market imperfections into investable business opportunities. The exact nature of the opportunity is always uncertain, and how such opportunities might create, capture and deliver value is often unknown.
As a venture builder, my job is to navigate uncertainties, reduce risks in a data-poor environment and create investable business opportunities with our corporate partners.
The clarity, simplicity, and tangibility of what I do continue to elude several in my professional and personal ecosystem, and it’s easy to see why. My mum has a long-standing broad explanation that I am a business consultant (this is not entirely untrue). My children have a happy explanation that I work for a company that solves problems and keeps me in Singapore, which they love!
As my job scope and story diverged and converged over the years, the answer to what I do has evolved from ‘I help corporates innovate’ to ‘I help corporates build innovation capabilities’ to ‘I help corporates drive innovation and transformation strategies’ to ‘I help corporates build startups.’
But, while simple and undeniably useful at dinner parties, none of these explanations provides a complete picture.
I want to change this concretely, especially for my professional ecosystem, and make it relatable for everyone aspiring to become or partner with a venture builder. Given my love of analogies, I’ve broken down my job into three key roles: I am a detective (like Sherlock Holmes), I am a scientist (like Albert Einstein), and I am a stand-up comedian (like Chris Rock).
I deliberately chose these three professions because these are the hats I wear as I navigate uncertainties, reduce risks and make my investors happy. In addition, these hats help me pursue an iterative learning process of creating new opportunities and new data sets that did not exist before. Further, they explain the method in the madness of venture building and the science in its art.
Also Read: Holding tight or letting go: A paradox I face as a father and a corporate venture builder
These three hats put me into seemingly counter-intuitive modes that make my profession as a venture builder consistently rewarding for me, my team, and my corporate partners.
Hat 1: Detective (like Sherlock Holmes), asking questions and not seeking answers
“As a rule, when I have heard some slight indication of the course of events, I can guide myself by the thousands of other similar cases which occur to my memory,” Arthur Conan Doyle, from the story The Red-Headed League.
At the beginning of any venture-building journey, we know very little. We do not even know what we don’t know. We are dwelling in high uncertainty with limited data, lots of questions, and unquantifiable blindspots. Counter-intuitively, we need to leverage rather than mitigate our cognitive biases in such data-poor circumstances.
Asking questions allows us to keep an open mind while leveraging these biases. Asking questions helps us to uncover the unknown-unknowns.
It catalyses creative thinking while taking advantage of two biases, the representativeness bias (i.e., generalising insights from a small sample set) and the overconfidence bias (i.e., having a great deal of confidence in our ability to generalise small sample sets).
On the contrary, seeking answers is lethal. It primes us to listen for answers we want to hear in areas with very limited knowledge, thus risking false validations of our assumptions.
Therefore, we should err towards asking questions and not seeking answers. The approach here is to hold back the urge to jump to conclusions consistently. Instead, assume we know nothing and go into every conversation with an open, neutral mindset.
This will ensure we are ready to learn, unearth market imperfections, and deeply understand the challenges that represent potential innovation opportunities. Interview probes like, ‘could you explain that to me,’ ‘tell me more,’ ‘what if,’ ‘how might we,’ ‘why,’ etc., are great hacks to sustain this approach. Watch this video to learn more about building this approach.
Hat 2: Scientist (like Albert Einstien), being “assumptions driven”
“No amount of experimentation can ever prove me right; a single experiment can prove me wrong,” said Albert Einstein.
Venture building primarily entails creating something new, and creating something new is fraught with uncertainty because we have to make decisions in a data-poor environment.
All we have is a theory on what a great venture opportunity might be, with many assumptions behind it.
Also Read: Searching for gold in the silver economy: A venture capital perspective
The sustainable way to manage our discomfort is to be assumptions-driven and recognise that we make many assumptions. Counter-intuitively, being assumptions-driven is not just about proving or disproving an assumption.
Instead, it’s about generating data to understand where and when the assumptions hold or do not hold, thereby increasing our confidence level in the business opportunity.
The discipline here is to consistently segregate facts from assumptions, prioritise assumptions, ask “what would need to be true’ for an assumption to hold, and then work on generating the data required to continue having these assumptions.
A simple hack to distinguish fact from assumption is whenever sentences start with an ‘if,’ ‘I think,’ ‘I believe,’ ‘I feel,’ etc., we are making an assumption. And an assumption is held when we can say, “we believe in <X> because of <add data>” or “we do not believe in X because of <add data>.” Watch this video to learn more about building this discipline.
Hat 3: Stand-up comedian (like Chris Rock), pursuing small wins over a big bang approach
In gearing up for his global tour, Chris Rock makes between 40 and 50 appearances at small venues. Rock says, “It’s like boxing training camp. I always pick a comedy club to work out in.”
During these appearances, Rock performs 45 minutes sets in front of audiences of 30 to 40 people, where he brings a yellow legal notepad with lots of joke ideas scribbled. Many of the jokes will fall flat, but there will be 5-10 lines during the set that land exceedingly well, making it all worthwhile. Chris collects this data to build the next version of this set to perform the next night.
Instead of a big bang performance with new content, Chris is rapidly iterating, relearning, and refining his content for the global tour by getting frequently punched in the face during the smaller venue performances.
Like comedy, venture building is also about rolling with the punches and creating the data to back venture opportunities.
Counter-intuitively, placing smaller bets and going slow is the fastest and cheapest way to build a new venture. As venture builders, we cannot pin all our hopes on one big bet and wait to test everything in one big bang.
The tactic for building a new venture is to achieve a collection of small wins rather than one big win, wherein with each win, we unearth a new unknown or insight, raise/answer a fundamental question, or find data to back our assumptions.
The discipline here is to follow the loop, prioritise, execute, and reflect, by splitting the venture into multiple phases and defining the biggest assumptions that each phase must validate and answer.
While the individual objectives will vary for each phase, the collective objective is to drive a higher degree of validation across all phases. It is also critical to periodically invest time synthesising insights, reflecting, and reorienting the collective objectives. Watch this video to learn more about building this discipline.
Does the three hatted explanation of what I do pass the sniff test of simplicity? It is a resounding no. However, I hope it provides a complete picture of what I do and why I do it. What do you think?
This article is written as part of the Corporate Venture Launchpad programme. The SG$10 million pilot programme by EDB New Ventures aims to enable large, established companies new to corporate venture to launch a new venture in Singapore within six months.
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