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A Practical Guide to New Business Building for Incumbents

The article provides five essential lessons for incumbent businesses aiming to build and scale successful digital ventures:

1. Stay Close to the Customer:

- Focus on customer needs and build a product vision centred around them.
- Identify target customer segments, understand their pain points, and prioritize key segments.
- Continuously interact with customers throughout the product development cycle, adopting a mindset of constant customer engagement.

2. Focus on Strengths, Not Start-up Imitation:

- Leverage the parent company's strengths, such as brand recognition, existing infrastructure, customer data, and supplier relationships.
- Recognize and address existing constraints, including entrenched ways of working and cultural norms.
- Modernize underlying infrastructure to facilitate new business success.

3. Focus on Learning, Not Perfection:

- Avoid pursuing a "perfect" product and prioritize learning quickly.
- Launch a minimal viable product (MVP) early and iterate based on customer feedback.
- Aim for a "minimal lovable product" that addresses gaps over time.

4. Implement Iterative Rollout and Release:

- Establish a panel of customers for regular feedback.
Measure and track everything using data and iterate based on insights.
- Experiment using evidence-backed techniques, including A/B testing.

5. Mitigate Risks Proactively:

- Identify and address potential risks, such as entrenched ways of working and complex processes.
- Modernize infrastructure to facilitate the new venture's success.
- Tackle cultural norms and mindsets that may hinder progress.
- The overall emphasis is on customer-centricity, leveraging existing strengths, embracing a learning mindset, and implementing iterative processes to increase the likelihood of success when building and scaling new digital ventures within incumbent organizations.

By - Rmd.COM

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Global Economics Intelligence

Growth in most surveyed economies exceeds pessimistic expectations; inflation moderates but is still high and central banks stay tightening course. Despite the year’s high inflation and energy uncertainty, world economic performance in 2022 is set to exceed earlier more pessimistic expectations. Growth estimates for 2023 and 2024 have also become less dire. Recently upgraded forecasts suggest that global growth in 2022 will be 3.2% (IMF, Conference Board). In most analyses, a slowdown of short duration is predicted for 2023, resulting mainly from stagnation in the developed economies, with a rebound in 2024. The economies of the US and eurozone demonstrated resilience in the second half of the year. The US economy expanded at an estimated 2.9% in the fourth quarter and 2.1% in 2022 overall. The eurozone economy avoided a predicted contraction in the fourth quarter, expanding by 0.1% beyond the previous quarter and 3.5% for the year. From the world’s largest emerging economies, comparatively robust growth is expected for 2023. In India, where GDP expanded 8.7% in fiscal 202122 (March to April), the official GDP growth estimate for fiscal 2022 7%. In China, the pace of economic 23 is expansion slowed from 8.4% in 2021 to 3% in 2022. The main cause was disruption connected to the “zeroCovid” policy but weaker global demand and rising geopolitical uncertainty magnified the headwinds. China has since lifted key pandemic restrictions. At the World Economic Forum’s January meeting, Liu He, China’s vicepremier and top economic adviser, welcomed foreign investors, emphasizing that China’s economy was set to improve significantly in 2023. The IMF recently upgraded its growth estimate for China in 2023 to 5.2% and early economic data are directionally supportive. Recent global economic data have been mixed, reflecting both improved conditions and persisting downside risks, largely centering on inflation and geopolitical uncertainty. Inflation has begun to slow in both developed and emerging economies. Energy prices have come down, but core inflation readings remain high and central banks are sustaining a course of policy tightening (Exhibit 1). The US Federal Reserve implemented a small rate rise on February 1 (onequarter point), bringing the policy interest rate to 4.54.75%. The Fed also signaled that further increases can be expected in 2023.

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