The company in question has barely 100,000 employees but the profits it generates make it the 20th among the global corporations. Alike many international business moguls, this corporation has also decided to take the path of the digital revolution. One of its innovative business undertakings is designed and built in K2 Digital Ventures.
The startup was located in Digital Ventures, outside the big organization structure, to create optimal development conditions. A large project team, including corporation managers, lean startup specialists, business model designing experts, prototyping experts, UX and development experts, has been working under K2 Digital Roof for some months now. Works are carried out in SCRUM.
The process of developing such undertaking looks like follows:
Recognition of modern technologies and innovative business models that already exist in the startup world and proved to be scalable is a material element in the process of creation of corporation-separated start-ups. This is exactly the purpose of Scouting — to scan the global market and find start-ups that may serve as an inspiration for the project business case in the corporation. The mapped start-ups may also be used to design technological aspects of the undertaking. Startups’ review includes analysis of their business models, distribution channels, price-related strategies and traction gaining method.
Scouting provides a short list of startups that are the best match for the business strategy of a big organization and the source of inspirations for further stages in startup building process.
On this ground we design unique business concepts to be further confronted with requirements and expectation of the corporation’s clients.
On this stage, the team of K2 Digital Ventures designs business concepts based on scouting-derived information. Such concepts define:
- startup target client groups,
- competitive advantages important for a big firm that a startup may potentially bring when created and introduced on the global market,
- corporation’s KPI that a startup could positively influence,
- resources required to materialize concepts in such a way to build a startup MVP as quickly as possible,
- technological and business competencies necessary to build a startup.
The concepts are then presented to corporations’ clients. The presentation and clients’ feedback stage are preceded by quick prototyping stage. It is very important for the final client of a big organization to be able to get as near the designed product as possible and to know the business model of a new undertaking to the best obtainable extent.
We organize meetings with clients and all assumptions we have made in our concepts are instantly validated. We collect and categorize clients’ feedback so it could help us change the design of the prototypes during next stages. Such approach enables to confront initial business assumptions with clients’ requirements. Furthermore, during the meetings, we are able to verify assumptions of business model, including pricing strategies and distribution channels for the product we work on (for instance, digital platforms that the clients frequently use).
At the same time, during the Proof of Concept stage, we develop the business case for the project where we calculate the capital intensity of the solution, related business risks, KPIs and ROI.
The clients’ feedback received during the first tests allows us to modify the assumptions of business undertaking and serves as the base for Private Launch phase. The Private Launch is about translating previously designed prototypes of the product and the business model assumptions into MVP. Minimum Viable Product is a product having minimal set of functionalities necessary to satisfy needs. It is so called ‘early adopter’ enabling to get comments and use them to develop the product further. MVP is created based on agile methods, so the scope of the product’s functionality could be constantly expanded. It is very important because the definition of product’s scope requires consultations and discussion with stakeholders of the project and potential clients. This stage is also reserved to select the right technologies.
As the startup is located outside the corporation structures it is possible to test different technological paths (testing various frameworks, project progress monitoring systems, communication systems, such as Slack) and to apply modern technologies to create MVP.
Extending the MVP along with the inbuilt business model (pricing options, product distribution on specified platforms, for instance iOS, warranty rules) to the corporations’ customers is the key part of the Private Launch phase. In order to do so, we will select a group of several dozens of companies that will receive product for direct use.
Selected clients will have somewhere between ten and twenty weeks to test the product and its business model on the market. Received feedback will be used to re-design the product’s functionalities, re-design UX and other previously made assumptions.
The Private Launch stage is extremely important in formation of the product-related benefits offer and attractiveness of the business model to be applied in the future with regard to the startup in the global corporation.
This stage is also the time to define the team to be responsible for the further development of the undertaking. The Startup Building process contributes to formation of the personal responsibility, skills and requirements that the startup needs for further development.
This is the way to provide big companies with the knowledge what persons and of what skills will the startup team need and when the startup will be of maturity with regard to the product and the business model. It is extremely important for the startup recruitment process. Please remember, that a great majority of competencies that the startup needs are not to be found in the corporation, and even if they are to be found, the scarcity of such resources and ongoing internal struggle for such resources will make it hard to acquire them for the startup. The Startup Building process furnishes the corporation’s HR departments with clear instructions as to what persons to look for on the job market if the startup is to keep operating dynamically and concentrate on the clients and their requirements.
This is the last stage of the Startup Building process where the product is widely distributed on the market. Before it happens however, the product is integrated into internal systems of a company. The integration is not only about IT systems but also about necessary procedures (for instance, personal data management, RODO and other). Moreover, the Startup Building process shoots at exploration of innovative technologies, which big organizations find difficult to adopt. Therefore, this phase gives space for multileveled discussion about technologies applied in earlier phases and the way of adopting thereof to structures of big companies.
It is a very important part of the process as it allows knowledge transfer from a startup to internal structures of corporations, use of knowledge about clients of such corporations while keeping the new undertaking, its business and technology-related assumptions fully autonomous.
Final roll out of the solution and its wide distribution on the market is preceded by the most important part of this phase — monitoring of KPI determined in the business case. Please note that the business case is the starting point for further works. As you can see then, the Public Launch phase is about constant monitoring how the clients of big companies behave with regard to the product’s use, the effectiveness of pricing strategy and existing distribution channels. The purpose is to collect clients’ feedback and use it to re-design business assumptions and to continuously improve the business model.
If you would like to discuss the best way to design, roll out and scale a startup in your organization — feel free to contact us.