A new approach to business incubation in the venture economy
Venturing is the gateway for ideas and dreams to become real. In the Venture economy, I wrote about the unprecedented opportunities for millions of people to create a better future through venturing. Today, everyone can contribute to a venture through committing time, skills, experience, resources or providing access to networks. Venturing has been ‘democratized’ through the global adoption of (mobile) internet. Cloud services, the lean start-up methodology and collaboration platforms make the start-up of a new venture – commercial or social – accessible to anyone wanting to cross the chasm.
Yet, in my conversations with founder teams, I came to realize that it is not only the venture methodology that is changing. The way ventures are being incubated – at the start – is changing as well. Contrary to the 20th century economic model, which was very narrowly focused on economic value creation, a new generation of entrepreneurs has started to think differently about the purpose of a venture, its values, organizational design, collaboration, sharing and (equity) ownership. I realised that lean, open and collaborative ventures need to develop a different perspective on venture governance. A new playbook is required to enable ventures to align the roles, contributions and rewards their participants.
In the Open Incubation Playbook, we want to address the challenges that lean, open and collaborative venture teams are facing: How to start an open venture together with multiple co-founders and partners?; How to find a balance between contribution & rewards of the venture team members?; What types of contribution & rewards do we recognize?; How to deal with he need for ventures to attract different skillsets both at the start and over time?; How to combine an economical viable business model with social entrepreneurship?
Open Incubation is a venture governance model for lean, open and collaborative venture teams. It allows the participants to quickly agree on expected contribution, (potential) rewards and the rules of engagement.
The Open Incubation methodology consists of a Contribution & Reward framework that facilitates the participants in a venture to align role, contribution and reward. Furthermore, the Venture Governance framework guides a venture team to agree upon specific venture governance topics regarding leadership, transparency and venture life cycle, from start-up to exit.
The ‘higher purpose’ of the Open Incubation Playbook is that any possible barrier to one person contributing to a venture most be stripped away.
The importance of venture governance is best illustrated by Yancey Strickler, co-founder and CEO Kickstarter, who said in an interview with Wired Magazine that projects on Kickstarter “are often funding things on the bleeding edge, we’re tasked with thinking about how the future should be governed. We take this responsibility very seriously”.
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