The De-Risking Method - How a Venture Capitalist Would Run Your Corporate Innovation Project
Innovation is not about project management - it’s about risk management.
Because if you’re doing something for the first time, chances are, you’re going to screw it up. No matter how meticulously you plan.
Enterprise firms aren’t used to this. They’ve been around for decades, some even centuries. They operate on predictability. Customers buy. Processes work. Services are delivered. Everything moves like clockwork.
But that mindset doesn’t prepare you for the deadly valleys of innovation - where mistakes in some form or shape are guaranteed. To make it out alive, you need a different approach.
Maybe you want to consider taking a page from venture capital (VC) funds - firms investing in technology startups.
VCs invest in startups that strive to be first. And over time, they’ve developed a powerful framework - that is not about building companies according to some grand masterplan, but systematically de-risk them in stages.
How Venture Capital Firms De-Risk Investments.
A startup seeking a Seed investment must de-risk product retention - will customers keep coming back? At Series A, it’s about de-risking market demand - how many people exist with that need? At Series B, the challenge is scalability - can growth be sustained operationally? By Series C, the focus shifts to profitability - does growth translate into sustainable earnings?
At every stage, VCs move from big to small, foundational to specific.
They don’t expect profitability on day one. Many companies make a profit (Series C), but would not interest a VC the least. Can you prove runaway growth (Series B & A)? That question needs to be answered first. Because without it, profits won’t scale fast enough to pay for the considerable risk a VC buys into.
And then again, growth is useless unless you can prove that the product will also be able to retain those customers (Seed).
Now, let’s apply this thinking to corporate innovation. Instead of de-risking companies, we de-risk an enterprise AI project.
De-Risking An AI Project.
The default corporate approach is to conduct an exhaustive analysis before making decisions.
Instead of this, map out risks. Start with the base of the pyramid, the biggest, most foundational risk, then move downstream from there.
Step 1: Define the Business Impact
First, determine whether the problem you’re solving actually matters.
Venture capitalists won’t invest in a startup unless it has the potential to create a billion-dollar enterprise value. A mark too steep for corporate projects. You’re not carrying the same risk-return profile. But directionally still the right approach.
Does this project really move the needle?
Resources are scarce. Life is short. Focus on projects with quantifiable impact - not vanity initiatives that look good in PowerPoint but don’t actually matter.
Step 2: Establish Problem-Solution Fit
AI can diagnose cancer, pass the bar exam, and beat humans at Go. But can it process your insurance claims?
The answer: It depends. Okay. So what does it depend on?
For AI to work in your context, you might need to rewire your policy data pipeline, introduce new claim statuses, or rewrite case classifications.
Before committing to an AI project, map out these dependencies. Not in detail. You don’t need a high resolution image, just a rough sketch with big confident lines that let you see the big picture.
Step 3: De-Risk Implementation
Even if you nailed 1 and 2, execution can still kill the project. So you need to work with the right partners and technology. These are massive topics deserving their own deep dives which I’m going to publish here soon. On the highest level, you probably want to see both the partner and tech in action - the easiest form is a demo, but there are also more intense formats.
But the key takeaway is this: Follow the right sequence. Go from big to small, foundational to specific.
It’s useless to see a shiny demo of how an AI can answer FAQs from your website (step 3), if this use case delivers negligible customer value (step 1).
Lessons Learned from VCs.
Take a step back. Look at the big picture.
Which opportunities will drive enterprise value? Focus on the big wins and ignore everything else. Then, design a rough but complete sketch of a solution, and validate the technology and team that will bring it to life.
For those committed to making a lasting impact in corporate innovation, this page from the VC playbook could prove a game-changer.