BCG Digital Ventures on how conglomerates should look at startup building
Published on February 2, 2023
Successful tech ventures can get their start anywhere, including from within large, multinational corporations. But if a big company wants to launch a small but promising startup in a developing nation or anywhere else, often questions arise about how to do it right.
In a recent episode of Indonesia Digital Deconstructed, Lauren Blasco, Head of ESG at AC Ventures, asked Neels Steyn of Boston Consulting Group (BCG) what it generally takes for his team to help get a corporate-backed startup on the right footing in the market.
Neels drew from his expertise as Venture Architect Director at BCG Digital Ventures in Southeast Asia to give a very thorough answer.
BCG on how large corporates should look at venture building
The transcript below has been condensed and edited for focus and clarity.
Lauren: What is the journey like for global enterprises that seek out your help?
Neels: It typically starts with a corporation coming to us and saying, “We’ve been working on this idea,” or “We have this hunch,” or “We feel there’s an opportunity here.” Then they might say something like, “Based on what we’ve looked at, we believe you have the right capabilities to help.”
Many times, corporations will recognize that they don’t have the necessary talent capability, or even capacity, to do “x, y, and z,” and they want our support in conducting the journey.
Then, we spend a lot of time on validating the idea, looking at it from four fundamental angles. The first is to find the frictional pain point that the idea addresses. The second is whether there’s a real viable business opportunity here and whether we can scale it. The third is whether the technology exists to bring a product to market quickly enough. The fourth is about what corporate assets the venture can leverage to give it a real advantage to succeed. We look at all this very, very thoroughly during validation before deciding to go ahead.
Lauren: If you do decide to go ahead, what happens next?
Neels: Then we go into incubation. That’s when we build the product, the business, and the organization. We have teams of project managers, engineers, and designers that work on products.
But building the business is really about how we go out and find our first customers. How do we build the right type of partnerships and how do we take this to market? Building the organization is about creating the founding management team required to take this venture to its next phase, which is basically commercialization and scaling of that venture in the market.
Lauren: And then at what point do you guys step away? Is there an ongoing overlap period?
Neels: Ideally, we work side by side with them for a couple of months and then do a proper transition. Our team members do step back and roll off. Sometimes, though, we continue supporting the venture in whatever ways needed for it to reach success. For example, as you may know, it can take longer to find certain types of talent. So then we might stay on and support the venture with our own talent until the new, right team members are aboard.