When Wal-Mart Stores built its first version of Walmart.com, it used internal resources. But when it was ready for a relaunch, it chose to partner with a venture capital firm. Why? With $165 billion in 1999 sales, the giant Bentonville, Arkansas, retailer didn’t exactly need an infusion of cash. The reason is that company executives recognized the need to give their e-business the kind of “kick” that only outside partners can give. So Wal-Mart turned to fast venturing.
In fast venturing, innovating companies tap into the specific knowledge and experience of equity partners (usually venture capitalists or banks) and operational partners (sometimes incubators, sometimes professional-services firms, such as consulting companies, systems integrators and Web portals) to get a project to market and scaled up fast.
Speed is a widely acknowledged necessity in the New Economy, but many current approaches to starting a new venture are just not rapid enough. Typically a company chooses internal corporate venturing, which management strategist Gary Hamel describes as “bringing Silicon Valley inside your company.” Hamel and others believe that to create the novel products and services mandated by the Internet economy, companies should establish pockets of creative thinking under their own aegis and launch new ventures from the inside out.1 However, our preliminary research suggests that, although internal venturing might... To read the complete article, login or sign-up using the form below.
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