(#1) VB Map podcast: Productizing Venture Building, Venture building strategies, and Venture Capital as a Service: A conversation with Coventures CEO Marko Oksanen

Andries De Vos: Marko, I want to start our discussion with a topic I’ve been thinking a lot about recently. Do you think entrepreneurship can be taught or do you need to be born with certain attitudes?

Marko Oksanen: What it would mean if it couldn’t be taught we would have a certain type of entrepreneurs, so this is a fact that we know is not true. Obviously, there are some stereotypes of the most vocal and the most extraverted entrepreneurs – they are the ones we hear the most about, because they are very vocal and so on. There is a lot of research about the psychological traits of entrepreneurs, and the findings of that research that there are minor traits above others. That is probably a bias of how you get to be an entrepreneur. I believe really strongly that anyone can be an entrepreneur and it’s more about opportunity and what you do, the skill set you learn or not.

Entrepreneurial skill set is just like any other skill set, which can be learned, and some of the best universities in the world like Stanford have been teaching it for quite a while, and very successfully. In the scientific world, it is pretty much proven that entrepreneurship can be taught and anyone can become an entrepreneur.

Few people understand what entrepreneurship actually is. Most people think it’s founding companies, but what if we would think about it as a skill set? Few people actually understand what type of skill set it is and how to define it, and so on. I had background in entrepreneurship already, I had founded my own company, I had worked in the startups, and still when I started researching this topic in my thesis, I banged my head on the wall for three months before I understood that entrepreneurship is a skill set, even though all research from economic faculty likes to define it as something else. But in the end, especially if you are studying how to learn or how to teach it, it has to be defined as a skill set.

Andries De Vos: As we democratize the startup way and more people become entrepreneurs, some of them may not have the natural grit or resilience to be one, which could lead to serious mental health risks. How can ecosystem better support entrepreneurs with their mental health?

Marko Oksanen: I learned entrepreneurship the hard way. After some ventures, I got really down, and I think not all personalities could handle this sort of adversity, but that’s part of the problem. I had to find the career path the hard way. I didn’t know about product management when I started my first venture, and sometimes I envy the people who graduate places where we have really good entrepreneurship education in Helsinki. They learn a lot of stuff I had no idea about and they have much better opportunities to become successful. Even if their venture fails, they will have the knowledge of senior product manager or head of product and get investment easily. And when they get investment, they can cover their own payroll, they can pay themselves a decent salary. They don’t have to take the path I did, working without salary for a year.

I think it is a much smarter approach. There are some people who have gone the same path as I and become successful at some point, which I haven’t. Some people like to think back and think of it as a requirement, consider that everyone has to go through it and do all these hard things, but I’m of a different opinion. I think it is a big problem that people are forced to learn it the hard way. We can create more value in a psychologically safer environment. Many more personalities that aren’t ready to do things the hard way can still become great entrepreneurs the more easy way. We still have this myth of a super entrepreneur and people don’t understand that entrepreneurship is a skill set that can be learned, and it can be learned in roles that are employee roles.

Andries De Vos: At Coventures, you’re all about partnering with fellow entrepreneurs. How do you measure their skills? Have you defined some kind of Coventures framework for entrepreneurial skills, like a periodic table of skills?

Marko Oksanen: We are really in the beginning of systematizing skill sets. We have been creating a market on top of the skills, so we have been trying to find problems that corporates or startups have and then define systematic solutions on how to help.

Many startups have some type of mission and they have some type of reality, but the whole product vision or product strategy, having clear vision and clear roadmap on how to get there – that part is really messy. So, we have been helping them to get their strategy in order on how to actually get where they want to go.

Obviously, that helps if they’re raising funding or doing sales – to have clear narrative there is a good thing.

We’ve just published this “What we do” section on our website as well. Then there is the dimension of what kind of person, what type of team we need to do these projects, what skills are required. That is where we are still in the very beginning. There’s a lot of things to uncover there, the concept of effectuation and how well-versed you are in this effectual thinking – that’s one approach. There are also the attributes for traditional consulting, and so one. Those are the two different spheres where finding people who are good in both entrepreneurial skill set and effectuation and the traditional consulting, the causation thing is hard. I think some projects require more of this creative entrepreneurial thinking and some require less.

Having this portfolio of different types of projects and then hiring people who can do these projects is the start of building up the IP of our company. And then, when we start moving people inside our company to do more and more entrepreneurial projects and we see what other barriers are there, that’s we really start to learn how much we can stretch the skill set and if there is some inherent personality thing to play a role or not.

Andries De Vos: Let’s talk about the “venture building as a service” model. What does it look like and can venture building become something like contract manufacturing?

Marko Oksanen: My context, obviously, is highlighted by my background where this whole idea started, and I started from entrepreneurship to research, so I bit my teeth about how to teach and learn entrepreneurship. That got me thinking about the question of why couldn’t this be systematized? The problem is really similar to poker: you can easily automate and systematize everything related to limit hold’em, but when it came to no limit hold’em, it was really hard and the smartest computers in the world only now have started to systematize and actually craft theories on how computers could play a no limit hold’em. The professionals only now – about 10 years ago – have started writing books about how no limit hold’em could be cracked and what the elements are there that create a winning player. The big similarity there with entrepreneurship is how you handle risk. In no limit hold’em, you obviously have many unknowns and risks, so you need to take pretty advanced theories on risk management and you have juggle portfolios of risk. And you need to take this information to guide your actions so that you can be sure this action will be successful, but you only be sure that in the long run it will cause right things.

With entrepreneurship, in some ways it is a similar field, and as you said in the beginning there isn’t one silver bullet or model that is winning. I can say there is definitely a market forming, and in some ways, if you look for example at BCG Digital Ventures, they seem to have cracked one model that kind of works in a really limited context of super big companies which have a very high budget, room to experiment, and they actually throw in a lot of money there, hire the best people, and have this assembly line approach.

What we believe, what we want to make is a more entrepreneurial model that in some ways is definitely systematizing entrepreneurship and will not be a model that causes 100% of ventures to succeed, but we do believe there is room for another type of entrepreneurship that utilizes the assets that are currently available in big companies or research institutions.

There are a lot of assets there that can’t be utilized in traditional entrepreneurship, where there is just one entrepreneur with super limited resources. They can never defrost a lot of markets, which just require a lot more assets.

This is where we see potential not only for successful business but also for solving the world’s biggest problems in impact entrepreneurship, because many of those problems are such that they just can’t be solved with a super niche approach that is almost required when you do it the traditional entrepreneurship way.

Andries De Vos: What kind of entrepreneurs thrive in venture companies and in the “venture as service” business model? Are those entrepreneurs similar to the ones that venture out on their own or is it a different type of talent?

Marko Oksanen: Our long-term vision and focus is definitely to solve big, impactful problems together with the assets of corporates. That’s where we see potential and our long-term focus is to get there and work together in creating new type of ventures, companies that aren’t companies that could be created by sole entrepreneurs.

Then again, our more short-term focus and what guides us now is actually the supply side, how we build are team and so on. We believe that none of our entrepreneurs in residence right now are Elon Musks or super qualified entrepreneurs with billions from exits. We don’t believe we can attract this kind of superstars to work with us from the beginning.

What is interesting is that if entrepreneurship skill set is just a skill set, there is no reason why we couldn’t work together and create a team of entrepreneurs, share information with each other that could become really powerful. Together we could be some of the best entrepreneurs in the world.

Building this skill set and then creating a market for it, finding how to utilize that in consulting projects in the beginning, but also taking bigger and bigger steps and actually building ventures – that’s the more short-term or mid-term focus.

Definitely, in all our projects we consider the impact aspect as well, and we’re willing to work harder to build those projects, but we do think that the supply side needs to be built first. We need to be a maybe 10-12 people company with many good entrepreneurs and product managers who have the required talent before we can start building actually big things.

Andries De Vos: What is your ideal team configuration, skill mix for Coventures as a company and for your projects?

Marko Oksanen: The ideal configuration, in my point of view, is that we would be mostly entrepreneurs, people, who have built companies before and who know the craft of building digital product in a smart way. So, it would be people with background in product management and entrepreneurship.

In terms of whether we’ll be a platform for entrepreneurship, enabling independent entrepreneurs to create value or if we’ll hire people so they will be employees, that doesn’t really matter that much for us. We believe that we can actually also work in a platform way, where we are a more loose company and not necessarily have those entrepreneurs as employees, but just have them working as a team, as long as we create a coherent culture.

Andries De Vos: How do you incentivize venture builders inside your team?

Marko Oksanen: To be honest, some parts of the model are still open and I think it’s on my to-do list to complete by the end of the year to get to the next step of the model on how to incentivize.

There are a lot of things we can work with. One, obviously, is that when we build ventures together, the people building the ventures can be equity incentivized from the venture. Of course, we can share the equity pool of our own company as well, but does it matter if there is still a question mark over what kind of company we will become? Will we become platform based model and employee based model? There are a lot of non equity-related things we can offer that are of value, which we have identified already. That is, if you think of yourself as a sole entrepreneur or product manager with background and skills, and maybe you don’t want to found a startup right now, we offer a lot of things. We have our brand, peers support network, we have built an advisory network, we have deliberate partners so we don’t actually employ any developers or designers but we have partnerships where we can definitely get the best talent whenever required.

So, you get a lot of benefits, you can get into bigger projects. Obviously, we will also need to make a cut from that, but overall the equation looks pretty good, it’s pretty easy to crack win-win situations.

One of the biggest reasons many entrepreneurs have decided to work with us is the community. We also want to recruit people, be it contractors or employees, who actually believe in the mission and the vision we have.

These are people who want to solve big problems, they want to be part of the 20-people entrepreneur group that becomes more powerful together than sole entrepreneurs and gets synergy, so maybe in 10 years we can be as good as the most skillful sole entrepreneurs out there.