The traditional venture capital model calls for a degree of faith in the teams you choose to invest in. They can be down the hall, across the street, or on the other side of the world. At the end of the day, you can easily become detached from these individual teams, leaving them to their own devices in the hope they are working efficiently and towards the goal of building a successful business. This is just one of the many factors that contributes to the abysmal startup failure rate that Forbes reports is nearly 90 per cent. One technology company that is changing the game on this front is Momentum Ventures.
Based in Montreal, Quebec, Momentum Ventures has launched seven successful businesses since 2007, holding a perfect record at launching new ventures over the last eight years. One of the reasons they have been so successful is due to the fact that they insist on all development for all projects being completed in-house. Momentum Ventures CEO Matt Keezer says that this is one the cruxes of his vision, adding “with all development being done in house, we get not just collaboration at a higher level, but we have learning opportunities due to some of the new members of our team being able to work with or have access to people who have been in the online industry for more than a decade.”
Here are three reasons why teams working on multiple projects work better in-house:
1. Learning Opportunities For Staff.
By having all your teams under one roof you are able to expose your team members to a multitude of different workplace experiences. Firstly, for those working on far different projects, they will learn and stay connected with the many different systems in play across all projects. This exposure grows their knowledge base. Lastly, exposure to veteran staff allows team members to learn from experience and get the kind of mentorship that benefits all team members.
2. Collaboration Between Teams.
When Momentum Ventures began development on Alio, an online travel agency, they started from scratch. The development process could have been extremely difficult, but Alio had the added benefit of sharing an office with FlightHub, another online travel agency. The collaboration has benefited both teams, with Alio learning the ropes of online travel development and FlightHub determining they needed a server upgrade and planning their migration to Amazon Web Services after seeing Alio’s success using this well regarded cloud computing platform. This is just one example of many as to how collaboration benefits all the teams at Momentum Ventures.
3. Accountability and Immediate Action On Issues.
Lastly, accountability. Due to the nature of proximity, no issue goes without notice at Momentum Ventures. Frankly, by staying under one roof, development catastrophes or missteps are immediately noticed and rectified. By being in such proximity, some issues are even prevented due to the mentorship available to the Momentum Ventures teams. Likewise, if an emergency does come up, teams can benefit from out of the box thinking coming from many different sources thanks to the variety of teams on site. Working in one space also allows for friendly competition among teams, creating internal motivation that can spark innovation at the grassroots level.
There are many reasons why the traditional venture capital model is flawed. Detachment from the work at hand is just one. By having your teams work in-house you can increase collaboration between teams, accountability, and introduce a whole variety of learning experiences for your teams and their individual members.