Venture management is a business management practice that focuses on being both innovative and challenging in the realm of introducing what could be a completely new product or entering a promising newly emerging market.
It is possible that the product or service already exists, but through venture management efforts, it can be rebranded or updated with new innovative features to respond on new requirements and opportunities. This practice can be applied to any type of industry, big or small from a small mom and pop operation to a steel conglomerate.Strategic Planning is Key
As with any business venture, embarking on a new project involves decent strategic planning. This is where the tried and true SWOT analysis applies. Creating this analysis will allow the venture manager to evaluate the strengths, weaknesses, opportunities and threats that could make or break the proposed project. After evaluating all identifiable internal and external factors, the manager will determine whether the project is likely to be successful.
Upon setting goals and objectives for the proposed project, the venture manager begins to raise capital. In an established company, funding decisions will be made by the board. Sometimes this goes hand-in-hand with the decision to (temporarily) spin off the unit (e.g., to wrap the risk or to give the unit a higher level of freedom). In start-ups venture projects are traditionally funded by external investors.
It is important for a venture manager to have a good understanding of finance, sales and lead generation in dynamic environments and to have all relevant data on market requirements and responisiveness available in real-time.
How Does Venture Management Compare to Traditional Management?
In many aspects, venture management goes against what is practiced with more traditional management methods:
- With regard to sales, traditional management dictates that market focus should be on established customers, while venture management seeks to find new emerging markets to exploit. With an emphasis on speed in getting a new service or product to market, a high-growth venture will go against the traditional practice of sacrificing speed to ensure that are Ts are crossed and Is are dotted.
- When it comes to market research, the venture manager is ready to react and begin experimenting immediately to favorable data. Meanwhile, the traditional manager will want to devote more time to analyzing and reviewing the data gathered all in the name of reducing risk.
Bigger the Risk, the Bigger the Profit
For ambitious entrepreneurs and managers who are willing to accept risks, the possibility of big profits is what makes venture management so attractive for them and their shareholders who invest in their projects. Based on new technical innovations or customer ideas, these entrepreneurs are willing to take a gamble on new markets where they can attempt to exploit the wants and needs of consumers. Therefore, they will experiment with these new ideas to flesh out new areas of growth.
Management; however, must be prepared to take chances that sometimes will go against what the going trend may be for that particular market. A capable venture manager must be able to look toward the future and predict milestones that are to be obtained, which is often considered a novel approach for a new business entity to undertake in light of a risky market.
Vital to success of a venture marketing -based approach is the effective and efficient implementation of technology-enabled business intelligence. Business intelligence stands for a set of techniques and tools for the acquisition and transformation of raw data into meaningful and useful information for business analysis purposes.
Further Reading and References
- Comparing Venture Management and Traditional Management Methods (2015) by Dr. Ulrich Scholten