This Sunday I sat down with Ralph Choueiri, a co-building lead from the NOMU VC team, to discuss the future of co-building and the outlook for 2022 over a digital coffee ☕. Ralph spent 10+ years in the tech entrepreneurship space, working with companies like OLX Group and supporting the leadership in transforming and digitizing the core offerings of large organizations, ensuring the competitiveness of the company in the rapidly changing innovation landscape. Prior to that Ralph led the tech startup in Lebanon and exited the business in 2018. His role in NOMU VC is focused on building new solutions with the corporates in the MENAT region as well as foreign corporations entering the MENAT ecosystem.
When should an organization consider the co-building programs with a Venture Studio?
It is mandatory for companies to embrace innovation if they want to be relevant in the future. Most organizations are with the idea of innovating but are not sure when and how to do it. Say hello to Venture Studios that are helping corporations excel in the effort to innovate, using their curated playbooks, resources, and their access to the right talent to execute.
Essentially, the “pulling of the trigger” in my view comes from the realization of one or the combination of the following factors:
- The many knots system: when the complex structure and internal silos are present, it is very difficult to innovate (financially, operationally and competitively). Iterative testing and open conversation is at the heart of venture studios, but far from the natural flow of many corporations.
- When looking for an “All in one” partner to reach the result effectively: many teams that we speak to consider first to slice the tasks into the combination of the work of external large agencies, internal IT teams and so on. What is often realized as a result of our conversation is that the Venture Studio offers a “go to” infrastructure where each and every resource is utilized when needed and with no delay or communication issues. The right hand has to talk to the left one for the things to work!
- When the “Stable” look at problems at hand/ acceptance of problems and therefore stagnation culture is just beginning to show itself. Each company, when reaching a particular size is prone to maintaining the culture that had been there for some time and therefore resisting the change. In today’s competitive landscape this could be an extremely costly mistake to make and some leaders, at the first signs of stagnation, are rightly looking to move forward.
What are the core aspects that make the cooperation with a Venture Studio successful?
- Leadership buy in: the leadership needs to understand the value that studios bring in and are able to translate it to other departments of their organization. They usually don’t have much of a risk appetite and are too concerned with maintaining the status quo to embrace dramatic change.
- Setting up the proper innovation framework to foster the success of the new venture.
- Urgency to innovate: 10x faster and leaner is the flow studios work in. IT departments are often overvalued when it comes to innovative efforts – It is not about 2 engineers building a website, one has to consider the whole framework in order to increase the chances of success.
What are the main benefits of co-building for corporations?
The process of Venture Builders is straightforward: we build, launch, and scale new ventures in around half the time it takes a typical company to start, thanks to existing playbooks, shared resources such as talent and tech infrastructure, and our worked through speed to launch.
To summarize perhaps a few important points:
- Speed to market: worked out flow and the set timeline aligns expectations
- Efficiency: one stop shop with best resource allocation, smooth communication and transparency
- The know how: fresh approach to problem solving, based on experience and best practice
- Data first approach of every product built and at the core of success (many corporations are not exposed to dealing with data first approach)
What is the common misconception you see from corporations?
Aside from moving slowly, most large firms have a limited risk appetite – but dealing with Venture builders is different. Studios offer “side-car” innovation, ensuring that the main business is not jeopardized until the model has been validated.
The Cost is the second consideration corporates are bringing. Working with a venture studio does not mean investing millions of dollars to test the idea. Often this is the most cost-effective solution for the teams who are considering a multitude of separate projects and agencies.
How is the co-building program structured with the corporates?
- Innovation (8-10 weeks). Explore and validate if an idea is a suitable investment opportunity.
This is the customer discovery phase with interviews, deep dives, solution sketching, and initial business canvas questions answered.
- Incubation (10-12 weeks). Launch and rapidly iterate towards a repeatable scalable business model.
Initial branding, planning, and building of the MVP are done here, as well as hiring in case of need and preparation for the launch of the pilot.
- Commercialisation. Scale and take control.
When convinced that we are onto something, we recruit a full-time team, set up a legal structure, and launch a full campaign. This is essentially an MVP to V1 move of the product.
What is your favourite success case so far of co building the venture with a corporation in the MENAT region?
We are in the middle of the Incubation phase with one of our larger partner corporations in the region currently. During our discovery phase we found out that in our target segment 30% of the target users are exhibiting the strong need for the product we are building, and that is the case not just in the MENAT region, but across most active markets in our niche segment. We have done further research and discovery on the market and, preliminary, over 17% of the target segment is experiencing the same need. That gives us a good understanding of the size and glocal scope of the problem we have at hand. What we are considering is building the solution outside of the organization first and then integrating the new products and processes into the organization to support the new line of business, saving millions of dollars each year.
How do you see the co-building evolving in 2022?
A framework for innovation is a fundamental benefit Studios brings to the relationship. They’ve put the model through its paces, fine-tuning it each time to discover the actions and critical milestones that lead to success, and this will be the building block of the future promising relation between corporates and Venture Builders.