Internal Ventures…..What’s That?
“You run new ventures….so what does that mean??”
This is a question I receive almost every time I tell anyone what I do. I stepped into a role at General Assembly as Head of New Ventures 5 months ago and have quickly realized the role is not just rare, but that many have no idea what it entails. I myself am figuring out some of this as I go. Despite the opacity surrounding the role at most organizations, I have heard that many others wish their company had this role.
So below is a quick guide to the basics of the role. To be fair, I’ll give warning that what follows is based on my recent experience at 500-person, Series-C company and limited research, and as such may differ from how this role might play out elsewhere. Here we go….
What is it?
Internal ventures is a role within a company where an individual is tasked with discovering, assessing, and building new potential business lines for a company. It differs from business development in that the goal is not primarily to create value for and enhance the existing business, but rather to identify new revenue-generating business activities that require new business operations. In Internal Ventures you also serve as the first General Manager tasked with growing a business once an idea has been labeled a “go”. Internal Ventures may span a number of potential growth areas including:
- New Audiences, Same Brand
- New Industries
- New Audiences, New Brand
The role typically doesn’t focus on new geographies to enter, feature variation on products within an existing business line, or new channels to reach existing customers. Those functions are normally carried out by General Managers, Business Development, Product Managers, and other execs, but there may be some overlap. It may or may not include Acquisitions depending on the opportunities presented. Corporate Venture Capital (investing funds in external companies) is also separate but may come under the same umbrella in a larger organization.
I’ve seen this role called a quite a few different names from place to place including:
- New Ventures
- Internal Ventures
- Corporate Ventures
- New Revenue Streams
- In-Company Ventures
- Internal Corporate Venturing
It differs from Intrapreneurship in that intrapreneurship has come to refer to the act of behaving entrepreneurial within a company.
What are the responsibilities?
I’ve found that internal venture requires a person to serve all of the following roles at some point:
- Business development
- General manager
- Product manager
- Business operations
From financial modeling and diligence to piloting experiments via guerrilla marketing and self-organized tests, Internal Ventures requires end-to-end effort. Your sleeves are always rolled up.
In addition to these generalized responsibilities, Steve Blank’s explanation of Internal Ventures is one of the best I’ve seen:
“The external startup has to work long hours, and make many pivots, to identify the product-market fit, validate the MVP, and articulate a winning business model that can then be repeated and scaled. The internal venture must do all this, and more! The internal venture must fight on a second front at the same time within the corporation. That second fight must obtain the permissions, protection, resources, etc. needed to launch the venture initiative, and then must work to retain that support over time as conflicts arise (which they will).”
Beyond the differences between external and internal ventures, there are many differences between running internal ventures at a startup and at a large public company. Embarking on this role in a smaller and younger company means that the time horizon the venture is allowed to profitability and to be a meaningful percentage of the business will be shorter. Rather than the 5-10 year time horizon at a Fortune 500, you’ll need to reach monetary milestones in 2-4 years. A larger public company will also be more likely to have resources to create a team around Internal Ventures out of the gate, as opposed to an individual effort.
Check out these additional resources so you can learn more about Internal Venture Roles:
- Why Internal Ventures are Different From External Startups – Steve Blank
- The Disadvantages of Internal Ventures – Jeffrey Carey
- If You Can’t Beat Them, Buy Them – Economist
- Internal Corporate Ventures – EntreLeague
- Brian Halligan on Internal Ventures – Brian Halligan
- In-Company Ventures – 1000 Ventures
- Managing the Internal Corporate Venturing Process – MIT Sloan Review
Great post. I’ve always felt like this is a role more suited for PM & head of sales, but there’s sometime this blurry line between scaling & this role. That’s why I think this position makes more sense in a “big” company.