One of the noticeable differences in business management in recent years for innovative companies that strive for a productive environment is the more imaginative venture management versus traditional management approach.

When does a business model require venture management to be successfully implemented, when should traditional management be preferred? Funded by venture capital, venture management focuses on the speed at bringing new products to market. Here are more details on how this entrepreneurial business style works and how it's designed to compete in emerging markets.


When Venture Management Is Needed

When does a business model require venture management to be successfully implemented? 

Venture management is most useful in high growth markets, which are often driven by new technology. The new and immature nature of these companies can yield volatile and unpredictable results. A venture company may be set up to introduce new products that reward investors or it can be set up as a spin-off or independently operating business unit to another company. 

Innovation is the primary force behind a venture company. The head of the company must be creative and surround himself or herself with other creative minds that can brainstorm and offer cutting edge ideas. Managers must live the lifestyle of their products and must understand how customers feel about them. A venture manager is not so much someone taking a wild gamble, but is more someone who believes deeply in disrupting the market with exciting ideas based on well researched data and rapid response. 

Traditional vs. Venture Management Methods

Corporations are often set up to take time before the operation is profitable or starts meeting other goals. A venture management mindset, however, is to be first to market a customer-driven solution. While a traditional business is built on a competent team, the venture model is built on opportunities to meet customer needs as quickly as possible with new ideas or technology. The reason a traditional model has more predictable results is that it's usually based on tapping into an existing market whereas a venture business tries to capitalize on championing a new consumer issue. 


An emerging product that satisfies an urgent demand can gain plenty of visibility through media coverage as well as positive online reviews. A traditional business puts more emphasis on developing a thorough marketing plan rather than trying to rush products to market or risk too much of an investment in an unproven product. Venture management is much more willing to take chances with new products that have high growth potential. Ultimately, traditional business is more planned while the venture approach is more experimental and iterative. Experimenting should not be misunderstood as gambling. However, as opposed to the rather linear approach of implementing a prior defined business plan, Venture-Management is more iterative, continuously optimizing what started as a minimum viable product in an iterative (looped) approach.


Gathering consumer information is key to both traditional and venture methods. Traditional managers will try to base the business model closer to what consumers already like that's available on the market. Following the more iterative approach of venture management, venture managers will focus on most recent or live data to detect (emerging) market demand, analyze competitive behaviour and the locate blank spot that represents the opportunity for rapid market penetration and required product enhancement.  

The latter emphasizes the need for a close relationship between sales and product management in a venture management approach. In a small start-up proximity and cooperation is normal - sales and product management often covered my the same people. In big companies, this is more challenging. This is another reason why it is often beneficial to places businesses with "venture character" in more independent smaller settings or even (temporarily) spin them off. A good example is T-Online which was spinned of from Deutsche Telekom during its initial seed and growth phase and reintegrated in the subsequent consolidation phase.

Company Vision

The key to successful venture management is that it must be powered by an entrepreneur-type manager with plenty of imagination and ability to adapt to market changes quickly. Such activity must be everything else but chaotic. Initial launches of minimum viable products need to to be made with defined budgets followed by short cycles of decent market testing and subsequent improvements, substantiated with properly analyzed data. Eric Ries called this process business-hypothesis-driven experimentation, iterative product releases and validated learning.

A core value of a venture company is that it is built on market feedback involving customer input and analyzing customer behaviour. The fact that the goal is to meet a customer need quickly gives the business an edge over competitors. There is a risk that the solution will not fully satisfy customers, but delivering a minimum viable solution to  what customers want will at least have a chance to shine in an industry that otherwise has no solution and hence ignite a growth cycle. A new technology, such as a software program, can become big news quickly if it offers remarkable improvements to an industry.

Since a venture company or venture business unit is driven by seed money, the pressure is more to make a splash in the market rather than protect profits and engage in cautious spending. 


Some businesses are better off using a traditional management approach while others can reap faster rewards by using the venture model.

Traditional businesses are more formal and analytical whereas venture businesses need to be more aggressive applying iterative and technology-enabled marketing and sales practices. They need to run short and fast iteration loops, to be reactive on the customer needs, to gain, analyze and communicate the right data rapidly and implement the lessons learnt.

A venture structure requires technology-driven marketing and sales structures that are able to scale up rapidly in order to respond and first and foremost to sell.

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Topics: Venture Management


Topics: Venture Management