From idea to business model: Venture building in action

Finding, testing and implementing ideas: these are the three phases of our innovation process. It sounds simple, but in reality it is complex, because each phase brings its own questions, uncertainties and aha moments. None of them works by itself.

Phase 1: Find ideas without filtering

How do good ideas come about? Certainly not by simply brainstorming until the whiteboard is full. Our ideas come from very different sources:

1. Internal ideas: Employees submit ideas via formats such as the DRIFT process – fast, uncomplicated and low-threshold.
2. Market and technology trends: Our foresight and research teams identify relevant developments and opportunities at an early stage.
3. External inspiration: Collaboration with start-ups, innovation networks and external experts provides fresh perspectives.

This early phase thrives on the fact that all ideas are allowed and the question of feasibility does not yet play a role. Theoretically, at this stage of the process, it could even be about a station for beaming or commercial flights to Mars, even if neither is remotely possible. It’s about what could be relevant and possible tomorrow. After all, playing around with ideas freely can set unexpected creative processes in motion – and innovation often begins with a mental detour.

In fact, most of the ideas in this phase of our venture-building process are much tamer and more realistic. Last year, for example, we talked about investing in up-and-coming athletes, influencers, gamers, etc., or about a financial product that allows citizens to support regional projects on a voluntary basis with donations.

In the next step, we then form initial hypotheses from these ideas: We cluster and prioritize them in structured evaluation rounds. We consider: Who could be the target group? What problem are we addressing? What solutions are emerging? This is how we separate potentially relevant approaches from gimmicks. The aim is to identify ideas that are strategically relevant and marketable. For example, we took the rough idea of “blockchain for digital identities” from this discovery phase into the next round where it slowly developed into what is now known as Lissi, a platform for digital identities.

Phase 2: Testing ideas without illusions

In the second phase, things get serious: in a 100-day format, we use various methods to check whether the idea can become a real offer, for example through

• Market validation: We test whether there is real demand, i.e. through landing pages, surveys, pre-sales or interviews with potential users.
• Prototyping: We use mockups or click dummies to make the idea tangible so that we can gather feedback more easily.
• Iterative improvements: Based on the findings from the validation, the idea is continuously adapted.
• Technological and legal validation: We check whether and how the planned product is technically feasible and which legal requirements or challenges need to be considered.

We define clear KPIs, such as willingness to pay or user interest, in order to recognize whether something can proceed or not. One example from this phase is Wagebeam, an idea from the still relatively new area of Earned Wage Access in Germany. The project successfully completed the 100-day program: The hypotheses were confirmed, the target group clearly defined and a communication plan created, including a landing page where interested parties can register. The market potential here has proven to be viable.

After this phase, there are essentially three possible scenarios for each idea. First: If a project is not convincing, it is stopped without tying up further resources. Failure is not a setback, but part of the process, more on this later. Or secondly the project is continued, which can then secondly be further development into a separate company, see next phase, or thirdly integration into our parent company, Commerzbank, if a project has been successfully validated and has clear, meaningful links to the bank’s core business.

Phase 3: Turning ideas into real ventures

In the scenario where one of the ideas from the 100-day program has the potential to become an independent business model and thus a spin-off, the next step is to hand it over to our go-to-market studio. For Wagebeam, for example, we are currently preparing the transition to this phase.

In the go-to-market studio, the project is further developed into a marketable solution – with a business case, market launch strategy and a dedicated team that is fully focused on implementation. The results of the validation flow into a real MVP (minimum viable product) and a sales funnel to win customers and generate sales.

Our relatively new process comprises several phases, including the preparation, launch and scaling of the go-to-market strategy. KPIs such as turnover, customer interest and market acceptance are continuously measured during this process. At the end of this phase, we make a final decision based on the results: The project will either be spun off as an independent venture, scaled up further or integrated into Commerzbank.

Of course, it doesn’t suddenly get any easier from this point forward: technological challenges, market uncertainties, legal framework conditions and compliance issues accompany every project. Not to mention the strategic conflicts that can arise: Venture building is a medium to long-term initiative that often clashes with short-term corporate goals. Conflicts with strategic priorities may also come up or existing structures may make a project more difficult. However, these uncertainties are an inseparable part of the process.

By this point, it should have become clear that only a fraction make it to the third phase and even fewer projects become real ventures. But as clichéd as it sounds, sometimes the journey itself is the destination. Every phase of venture building provides insights: about market needs, technological possibilities or the fit of new business models. Failed projects always show us what doesn’t work and are therefore an important basis for future success. In any case, the real failure is sticking with unsustainable product ideas for too long because it consumes time and resources unnecessarily.

Last but not least, venture building is about people: People who have ideas and develop them together with others. With every project, whether it fails or not, our network of partners, customers and experts grows. And our teams acquire skills that extend far beyond the individual project, from prototyping and user research to business development.

Every day, we can see the positive impact that this culture of innovation, which emphasizes experimentation and learning over perfectionism, has on our employees. It inspires and strengthens the entrepreneurial spirit, which in turn benefits the entire company and every new round of venture building. Because innovation not only needs structures, but also this entrepreneurial, open attitude from everyone involved in the process.