There is a popular saying amongst entrepreneurs that Revolut, Stripe, Amazon – these business ideas have all been thought of a million times.
The people behind those original ideas lacked the vision and capability to execute – except of course Nikolay Storonsky (founder of Revolut), the Collison brothers (founders of Stripe) and Jeff Bezos. Ideas aren’t what make people rich and build successful companies, it is the nurturing of these ideas and the ability to execute in working with like minded and driven individuals.
To ensure great business ideas are able to break through that first layer of dirt and receive glorious enriching sunlight and water, we are seeing the proliferation of what is called a Venture Builder, or Tech Studio, or Start-up Studio, or any combination of those words really.
The most brilliant minds come together in an open plan office, with whiteboards and beanbags, and often a well stocked fridge. The key strength of these Venture Builders are the network effects of many intelligent entrepreneurs, working on many exciting ideas at once.
What this creates is a constant atmosphere of growth and evolution. Once a good idea is developed and applied to a particular problem, there are often applications for that idea for another startup idea within the foundry, with further iterations and evolutions contributing to the end goal of productisation.
Importantly, Venture Builders should not be confused with traditional VC funding or incubators – which are not as hands on. Andreessen Horowitz, for example, will simply invest in an early stage business and let them get on with it. A Venture Builder will build an organisation from within on the back of an idea and develop the business themselves.
Venture Builders will often have a theme as well. Companies or Individuals chosen to take part in the process will be selected based on very strict selection criteria and must be related to a certain technology, like Blockchain for example.
Evolution of an idea
A typical evolution of an idea would look like this:
Great idea – How has it been done before and by who? How do we scale the idea? Is this something that has worked in another iteration in another market in another way? Can we improve upon that idea and scale it according to our target market?
How do we build the team around the idea? – who within the foundry has experience in this area? Have they built a team for a similar product in the past? Who is in their network we can leverage? What disciplines do we need to execute this with pace?
How do we fund the idea? – The Venture builder will take a stake of equity, but also provide connections to other investors and networks of individuals who have previously expressed interest in investing in similar ideas.
Going management of the Business – Venture Builders provide value through operational and strategic nous. They have experience in structuring teams, engaging in market research, product development and other day to day business requirements.
Shared Resources – Venture Builders are able to provide economies of scale across the back office functions of a business, such as Human Resources, Legal, Finance and other Operational functions. Lessons learned across the various ‘seed ideas’ can be applied across the board and scalability is achieved across all the ventures.
RedFOX Labs as a Venture Builder
RedFOX Labs is South East Asia’s first blockchain venture builder. We aim to use our collective experience and expertise to take successful unicorn companies, particularly those in China or the USA, and replicate them for the emerging markets in this region.
RedFOX Labs employs a 9 step funnel process to determine which business to replicate. This ‘RFOX Funnel’ process determines competition, market size, feasibility, market growth potential and determines if there is an actual advantage in using blockchain technology.
This model removes all emotion from the decision making process and relies on hard data collected during the ‘market research’ stage. By using the ‘RFOX Funnel’ we greatly reduce the risk of replicating a business that is not successful.
As an example we could use our research to identify a business opportunity that would rival Netflix which we could call Vietflix. The key differentiator between these two business models is that the user wouldn’t need a credit card or banked to use Vietflix. The content and feel of the application would remain very similar to the original, however you have the ability to pay via a QR code, bought from a local shop, with the transaction being stored on the Komodo blockchain.
Once the model is chose we have 100 days before we enter the market. This phase entails hiring an expert local team, establishing legal structure, product development, testing, marketing and defining target audience parameters. During the 100 days the RedFOX team will be on the ground and actively involved in its execution.
For the following 100 days, the RedFOX team will stay with the team and do post launch reviews, product improvement, customer experience and touch-point mapping, market analysis, design a revised 2-3 year business plan and help the company to raise capital to and expand and scale.
After 200 days the RedFOX team will return to its headquarters to begin the planning of the next business. RedFOX Labs will remain majority equity holders in the businesses we build and occupy seats on the company board of directors.
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