This is a past issue of the Dawn Newsletter. Each edition delivers an insight, a question, and an opportunity - drawn from real-time strategy work inside family businesses. The opportunity expires with each send, but we share selected issues here so you can get a taste. Want the next one in your inbox? Subscribe below.

‍‍

Legacy businesses love to tinker… but tinkering isn’t the same as building a business. As someone told me this week: ‘I’ve never seen a legacy company succeed outside their core through spin-offs. It’s always M&A.’ And the more I thought about it, the more I realized why.

One reason, I think, is this: corporate venture builders (my dear competitors) keep selling the fantasy of quick validation. “Two weeks and you’ll know if it works.” No, you won’t.

Startups don’t live like that. They don’t run a sprint and call it a day. They figure out a problem, pitch a solution, get rejected, pitch again. They keep going until they either find a crack in the market or run out of oxygen. The founders who make it are the ones who simply refuse to stop.

Legacy businesses rarely get that chance. Too much process, too much patience for the wrong things, too little stamina for the right ones.

‍

‍

One Insight

Especially in B2B, or complex products market side validation takes about a year. Not two weeks. Not one “validation sprint.” A year. Because markets don’t move on your timeline. They move on theirs.

Sales cycles drag on. Even pilots need signatures, NDAs, and procurement approvals. Decision-makers are buried under hierarchy. By the time you reach the real buyer, you’ve aged six months. Trust isn’t built on a landing page. It’s built on references, conversations, and time.

Yes, you can get signals quickly - ten replies to fifty cold emails, a handful of survey answers, maybe even someone agreeing to a demo. Those are breadcrumbs. They tell you you’re not hallucinating. But they don’t validate.

Real validation means money changes hands, or behavior changes in a way that costs someone something. And in B2B, you don’t see that after two weeks. You see it after a year of chasing, testing, iterating, and often starting over. Product, Sales and Marketing are one.

→ The Liminal Year

Academics call this the liminal stage of venture building. It’s the in-between where an idea isn’t yet a business but isn’t dead either. You’re testing hypotheses, running small experiments, reshaping assumptions. It feels like wandering through fog with no guarantee the ground is solid.

In my work, that liminal stage lasts about twelve months. That’s how long it takes to know whether an idea has the market pull to survive. And at the end, you finally get a verdict:

Yes. There’s a market, and people are willing to move. No. Nobody cares, and you’ve got the scars to prove it. Sort of. Which is the worst answer, because it tempts you to keep funding a zombie.

The problem with corporates is they rarely make it to the end of that year. Either they give up too soon because early signals are weak, or they let “sort of” drag on forever because killing projects is politically harder than funding them.

→ Startups vs. Family Businesses

This is where startups and family businesses part ways.

Startups treat validation as a fight for survival. They pitch even when the product is duct tape. They test not because they want to, but because they have to. Every “no” gets them closer to the “yes” that keeps the lights on.

Family businesses can afford to wait. And that’s the problem. When you can bankroll experiments indefinitely, you stop listening to the market and start listening to your own optimism. That’s why M&A looks safer: someone else has already done the hard part of proving demand.

‍

→ What Real Validation Looks Like

So, what does validation actually look like?

Define your first version of an ICP (Ideal Customer Profile). Build your first lead list. Reach out. Test pull. Don't make everything scalable (yet). Repeat until patterns emerge. It’s slow, it’s messy, and there’s product iteration in between. But it’s the only way to know if you’re building a business - or just a hobby with a cost center.

But before you commit a year to this process, you can pressure test the basics.

→ Is your market big enough?

→ Does anyone even reply to your emails?

→ Can you get people to pick up the phone?

→ Do the problems you think exist show up in their words?

Those aren’t validation. They’re pre-validation signals. Enough to decide whether it’s worth investing the next 12 months. 

→ Why This Matters for Corporate Ventures

Back to that comment about ventures never working in family or legacy businesses. I don’t buy it.

New ventures can work. I’ve seen them work. But only when they’re given room to act like startups: to validate with customers over a long stretch of time, outside the gravity of the parent company.

The ventures that fail are the ones forced into old structures. Where sales teams refuse to sell because it’s “non-core.” Where finance demands a "Deckungsbeitrag" calculation before you’ve even spoken to ten customers. Where the experiment dies in bureaucracy long before the market delivers a verdict.

The irony? Family businesses actually have the resources to outlast the liminal year. They can fund the long, boring, patient process of validation better than any startup. If only they’d let themselves.

‍

‍

One Question

When you want to grow beyond your core, do you buy (M&A) or build (spin-off)? Which path feels less risky - and which one actually teaches you more?

‍

‍

One Opportunity

This specific opportunity has passed. If you want to build smarter innovation strategies - and actually turn them into real venture projects - subscribe to the newsletter and stay in the loop. The next one might be exactly what you need.

‍