Validation Program

The Validation Program, launched together with our close partners at UC Berkeley in January 2017 provides a 2-phase structured, capital-efficient, customer-centric method for testing innovative business models’ market viability in the span of only 8 months.

The Program has successfully scaled worldwide with 14 batches completed or underway globally. A batch is a cohort of innovation teams starting the program together in parallel. Over its first four years, the program has supported around 300 teams with over 1500 participants through the intense program. Of these teams, 24 have been able to exit the program with an initially validated business model to proceed to incubate and scale their business models further.

The greatest learning effect in the program comes from the obligatory 100+ customer interviews, in which business model hypotheses are rigorously tested and (in)validated before investing heavily in the development of a product or service. One of the most important aspects of instituting this approach is accepting and internalizing the high failure rates that accompany business model innovation, particularly when exploring ideas beyond the traditional core business where even seemingly promising ideas will most likely fail. Those running the accelerator and the teams themselves have to embrace a test-, learn-, fail-fast mentality that is often at odds with the dominant culture of traditional core businesses. To instill and internalize this culture of evidence-based innovation, the program has banned pitches. Instead, in their lessons-learned presentation, the teams evaluate the evidence gathered in customer interviews and give themselves a go or no-go based on clearly defined criteria. Despite the vast majority of teams giving themselves a no-go, the program has a 98% satisfaction rating. Former participants go on to become advocates for the program.

In addition to the 24 projects that have entered incubation and scaling, the impact of the program results from the courage of these participants to give themselves no-gos. Early termination of projects has freed up over 100m EUR to reinvest in other ventures.

This Validation Program has been featured in numerous publications, including Harvard Business Review and Osterwalder’s “The Invincible Company”, as a leading example of how to run a fast, efficient validation engine supporting an exploit-explore innovation portfolio. In addition, the International Chamber of Commerce awarded this program with the “Corporate Startup Accelerator Award 2021” as the best corporate accelerator.

• This well-validated innovation process was applied to over 300 projects and designed especially for exploratory software, digital, B2B and B2C businesses
• The program is designed with an innovation funnel and portfolio in mind to achieve maximum capital efficiency by only investing in ventures that have been validated fast and efficiently in the market with actual customers. This approach allows only the best projects to be incubated and freeing up capital for other investments through early termination
• The common language and standard phases, criteria, and deliverables for the entire organization enable more cross-business-unit collaboration, particularly in the context of digital business models
• The whole program is based on the latest methodologies and Business Model Innovation practitioners in Lean Startup, Business Modeling, Design Thinking, human-centric innovation, organizational development, agile, and engineering
• By applying the systematic approach of the Validation Program, you can achieve strategic optionality and a modern portfolio management by investing at the speed of learning. As a consequence, this lowers the risk of investing too much too early in projects with a high probability of failure.
• The Validation program supports the cultural transformation of your whole organization by empowering the innovation teams to make evidence-based decisions (self-declared continuation or termination). At Bosch e.g. more than 1500 participants were trained to do exploratory business any many more are on their way.

The Validation Program consists of two phases: Customer Discovery (Phase 1) and Customer Validation (Phase 2).

The first phase lasts two months, while the second phase lasts another six months. After completion of phase 1 of the Validation Program, around 70% of innovation projects are terminated because the project's lack of scaling potential is recognized early on.

Reasons for this can be, for example, that the addressed problem is not sufficiently large from the customer's point of view or that the intended value proposition of the solution is not strong enough. By the time the program is completed (after phase 2), a further 70% of the remaining innovation projects are terminated because, for example, the MVP (Minimum Viable Product) developed meets with insufficient interest in the prioritized customer segment or the customers' willingness to pay is too low.

It is particularly important that the success and continuation criteria developed by Bosch Innovation Consulting, the so-called go-criteria, are applied uniformly to all innovation projects in order to ensure comparability between innovation projects. In contrast to other existing programs, the criteria in the Bosch Accelerator Program do not focus on EBIT, sales, or return on investment, but rather, among other things, on actual customer benefit, value contribution, or the development of a scalable business model.