The serial builder advantage: Why repeat innovators win

In an era of economic uncertainty and accelerating technological disruption, creating new businesses has become less of a growth option and more of a strategic imperative. In this episode of The McKinsey Podcast, McKinsey Senior Partner Jason Bello speaks with Editorial Director Roberta Fusaro about McKinsey’s new research on corporate venture building. They examine why serial builders outperform their peers, how AI is reshaping the economics of innovation, and what leaders can do to turn experimentation into a repeatable capability.

The McKinsey Podcast is cohosted by Lucia Rahilly and Roberta Fusaro.

The following transcript has been edited for clarity and length.

Why it’s better to build and repeat

Roberta Fusaro: We’re here today to talk about McKinsey’s latest survey on corporate venture building. Before we get started, please define corporate venture building.

Jason Bello: We mean a step-out business. It can be in the area where you work or with the customers that you serve. But we’re talking about wholly new products. It’s important because it means you need a different level of investment and management.

Oftentimes, even if it’s the same customer, there’s a different sales cycle, or perhaps you’re dealing with software instead of hardware. It’s these things that aren’t just another turn or an increment on an existing product that you have, but something that is using an advantage you have but in a fundamentally different way.

Roberta Fusaro: What was the research base for this? Tell us a little bit more about the study itself.

Jason Bello: The research looked at both venture building and companies experimenting with venture building. We looked at a range of companies, from large to small, and at the CEOs and the general managers of these new businesses.

When you think about capital deployment, if you have a dollar of capital to deploy, you can deploy it to M&A, and that’s great. However, there’s a lot of uncertainty, and you don’t necessarily know what you’re buying. You’re paying a big premium to purchase it.

If you can deploy that capital internally against something where you might have more conviction in the opportunity, but you don’t have a lot of conviction on your capability to deliver it, that’s a real opportunity. So we started asking ourselves, “What do great business builders do that others don’t? How do we help others learn from those great business builders?”

Roberta Fusaro: The research shows that the companies that build three or more ventures all at once dramatically outperform those that only try to build something new once. Why do you think practice makes such a big difference here?

Jason Bello: I think it’s because building businesses is a muscle. In order to lead a new business venture, you need to fund it differently. You can’t just look at last year’s budget and say, “You get last year’s budget plus or minus X percent.” You have to ask yourself, “What is my investment going to be to launch this business end to end? How do I break that investment into tranches so that there is less risk?” Also, these businesses are quite cash constrained. Everybody’s cash constrained to begin with, so you don’t want to overdo it. Thinking about milestone-based funding is a fundamentally different way of funding a business.

You must think about how you hold people accountable. It’s not like you’re setting annual goals that are the same year after year. You have to ask yourself, “What are my objectives and key results for the next quarter? How do I track that, and how do I hold teams accountable to that?” Every piece of business building is a little bit of a step out from what companies traditionally do. When you repeat that process, you build that muscle.

Serial business builders also do better because they take a portfolio mindset. Not every one of these businesses will be successful, just as not every M&A deal or product launch will be successful. They have risk attached to them. So when business builders say, “I’m going to tackle three of these business ideas,” they naturally derisk, and they also naturally get more comfortable killing things early when they don’t meet the customer or performance milestones early on.

Roberta Fusaro: It seems like the experience, as well as the “practice makes perfect” mindset, is heavily reflected in the research. One thing that also struck me was the question of cost. In 2024, the average cost to reach breakeven on the typical new venture was around $125 million. In 2025, that number dropped to $77 million. What do you think is driving that shift?

Jason Bello: I think it’s two things. We are in an environment where capital is constrained, and organizations are holding their businesses on a tighter leash. I think businesses are genuinely saying, “Find a way to get impact earlier,” and they’re looking for business cases where you can get 30 to 50 percent of the value of your business case within the first 12 to 18 months.

The second thing driving this shift is the introduction of AI. AI has completely reinvented the way we do business building, as well as the types of businesses that we’re building. We can use AI companions throughout every step of the process to make business building faster and better. Managers and CEOs are recognizing that and holding their teams accountable for baking that productivity into their processes.

AI is rewriting the builder playbook

Roberta Fusaro: How are companies using AI in the building and scaling process? Do you have examples of companies that are doing this well right now?

Jason Bello: There’s AI as a business, and then there’s AI in the background of business building. Let’s start with AI as a business. A lot of my clients are asking, “How do I completely reinvent the way that I work with AI?”

It may be somewhat close to their core work, but they’re thinking, “Can I actually build a business on the side that would be an AI-native version of myself that would disrupt me?” For example, we’ve accomplished this with a bank, where a bank has said, “I want to build a B2B bank for small businesses to take out loans, do their daily banking, and manage their suppliers.

But I want it to be completely AI native.”

The client built this secondary bank as a new business on the side, even though it was doing the exact same stuff they do as a core bank. However, the KYC [know your customer] process was fully automated and agentic. Customer service was fully automated and agentic. And the flow of funds was automated and agentic.

I spent all my life in healthcare. I’m doing the same kind of things with healthcare payers and healthcare intermediaries, where we’re asking ourselves, “Could we build totally new ways of doing prior authorizations or processing claims using agentic?”

We treat it like a new business. At some point, we’re going to reintegrate the rest of the business back. That’s all AI as a business.

We can also talk about how founders and business builders are using AI to accelerate their own business, within the business. There are a couple of things that I would highlight there. One is using AI to build businesses faster. There are copilots for every step of business building. We’ve built our own platform called Beacon, and our clients are using it. They’re also using native platforms, like what you can get in Cursor or Copilot, for product management. Product failures happen all the time when someone doesn’t think through the nth degree of detail on all those things. AI can do that thinking for you.

There are platforms out there that allow you to enter one statement to have a brief conversation with AI, and it fills out the entire “acceptance criteria,” which is all of those different dimensions of what it means to have this feature automatically.

We’ve all seen the use of AI to support software engineering in coding, and that’s been huge. At each step, there’s been a real productivity advantage. However, the more fun and exciting use case has actually been on the quality of business building.

Roberta Fusaro: I’d love to hear more about that.

Jason Bello: In our Beacon platform, you can enter your idea or the seed of a concept, and it will draw from other industries and places to give you variations on a theme in order to help you ideate and broaden the aperture on your concept. You can imagine a business where you’re focused on one set of features, and the tool can suggest, “Have you thought of using this other intermediary as a customer and getting them engaged?” or “Have you thought about a different sales channel?” or “Maybe you were thinking about selling this product as a perpetual license or as a pay-per-click. However, a SaaS-based solution, where you pay annually, might be a better option.” It really challenges your thinking along the way.

We’ve even been experimenting with things like synthetic customers. I was involved in an example recently in the pet care space, and we were able to set up synthetic pet owners because there’s so much data out there about pet owners. They’re on Reddit and Facebook. There are articles featuring their opinions. We could segment these synthetic customers into older, younger, and first-time pet owners, and people with multiple pets. We had personas drawn from real data from actual pet owners, and when we were ideating, we typed them a question, and they responded as that persona. It’s not perfect, because AI can be sycophantic, and our personas love everything.

Roberta Fusaro: I’ve heard that about the synthetic personas. They will enjoy every option you provide them.

Jason Bello: It’s all about how you prompt them. But it is useful. It’s not a replacement for user research, but it can be something in between to fill the gaps or to help you frame your questions to real users in your research.

Roberta Fusaro: Is there a way around the sycophantic responses? How do you get your personas to be authentic with you?

Jason Bello: In Beacon, we try to build the platform to prompt the engine or the agents that are producing these synthetic personas to tamp that kind of response down somewhat. It’s the way you prompt them that can help to some degree, and encouraging the personas to challenge you can be helpful.

The new economics of experimentation

Roberta Fusaro: You mentioned using AI to move beyond the core business. There’s a balance between being enthusiastic about what’s possible and managing business as usual. How should leaders think about that balance?

Jason Bello: You need to think of it like a portfolio. My best advice is to start with the business problem. Don’t take business building as a hammer looking for a nail. Pick a business problem that you want to solve and try to solve that problem through multiple avenues.

Business building should be thought of as a way to solve a problem. Maybe you can think about M&A as a way to solve that problem, and start to experiment with multiple shots on goal. We have found that players who take multiple shots on goal against a single goal tend to be much more successful than players who are placing lots of bets all over the place.

To me, that’s the most important thing. If you know what you want to do, your odds of doing it will go up dramatically.

You also have to isolate the business somewhat. For example, if you pull it out from the day-to-day management, have it report directly to a C-level executive, and preserve the funding specifically for this venture, your odds of being successful go up dramatically.

Roberta Fusaro: It makes sense, right? Otherwise, the initiative gets lost in the shuffle or other things take precedence over it.

Jason Bello: There are 1,000 ways to fail in business building. I think that’s why people are afraid of it. But if you look at the numbers, it’s a great return on invested capital because you have so many assets, like untapped customers and intellectual property. The odds of being successful with business building when it is managed well are actually quite high.

Roberta Fusaro: Because of AI, I know a lot of people say, “It’s so much faster to build or scale through M&A or other options.” But with AI, there really is no excuse.

Jason Bello: Exactly. We used to wow our clients and customers with wireframes. I remember doing a product in the digital-surgery space, and we arrived at the conference on day one and showed clickable wireframes to customers.

Then our team went and worked hard overnight and came back on day two with the next version of the wireframes. And the customers and the clients were just completely blown away by that. That’s old news, and that was only 24 months ago. Now we don’t use wireframes. We come with an actual vibe-coded prototype that can be made in a day. So you not only have a much better visual and experiential anchor, but you can also use that anchor to test features in the market.

Roberta Fusaro: Are there other areas where AI can help with new-business building?

Jason Bello: Absolutely. We’re now using AI to help build and pressure-test business cases, write surveys that go out to customers, build marketing materials, and create A/B testing for marketing. When you’re building a business, you need fractional roles at the beginning, and AI can play some of those roles. For example, a sales operations role can be played to some degree by AI before you hire a full-time person.

The advantage of being wrong early

Roberta Fusaro: Does it still make sense to think about new-business building while we live with a fair amount of economic and geopolitical uncertainty? What argument would you provide to leaders who might say, “It’s just not the right time”?

Jason Bello: I would say that during a period of disruption, business building is actually of paramount importance. You’re very likely to get disrupted yourself if you don’t start building those projects. That’s where a lot of this business-building concept of building an AI-native version of yourself has become such a powerful theme.

You’re not necessarily building a step-up business in that case. You’re building something that replaces you. But you’re doing it like an attacker would, and that becomes important.

We’re also in a world where standards are being set. I was just reading an article about how governments have potentially been influencing LLMs [large language models] and trying to sway the way LLMs respond. Everybody’s using AI and taking advantage of the ability to build their own workflows and competitive advantages. It is also really important to inject the great things about your products into the AI workflows of others.

Roberta Fusaro: Another finding from the report shows that a culture of experimentation is positively correlated with successful new ventures. However, cultures are notoriously hard to change. What are the first steps that you think leaders can take to build psychologically safe environments where it’s easier for teams to carry these new ideas forward?

Jason Bello: I think there are structural things folks can do and behavioral or cultural things that folks can do. Break your plan into small pieces, setting a goal that would have real customer impact in six or nine months. If you set a goal that’s not too far away, it is very tangible. As an example, let’s say you’re dealing with a B2B business. You can say, “I want to have 50 B2B customers on my platform in nine months.” Great. If you split that nine months into three parts, what are you going to accomplish, and what funding do you need in each period? Then you check in on whether you’ve accomplished what you said you were going to do. What new information did you learn, and how can you pivot? Then you can release the funding and move forward accordingly. When you break it down like that, the risk of failure is much smaller because you’re not betting the farm. You can also attribute the failure to something specific you learned, and not to a personal failing.

Roberta Fusaro: You can change course much more quickly if you’re just talking about one small bit of the entire process.

Jason Bello: I once worked on a project where we were looking at a product set. Our client was in the high end of this set, and the products serving the middle range were low-end products.

Our client thought, “If I could take my high-end product and produce it at a lower cost, I could win this mid-range market.” We did this exact approach, and one of our early milestones was validating the size of that market.

We found out that the market was much smaller than we thought. And that was fine, so we pivoted. We did a much smaller business build. They focused in a much narrower way and ended up releasing a product that was super successful. It could have been seen as a failure, but instead it was seen as a pivot.

Roberta Fusaro: Talk a little bit about mindsets or behaviors that need to change when it comes to business building.

Jason Bello: I think it must come from the top. Great business-building leaders are really clear that it is a fact-based organization. They say, “We’re going to learn from facts and have no shame about them. If the facts tell us our products stink, so be it. If the facts tell us we made the wrong decision about something, so be it.” Get the facts on the table, and as long as you’re part of the solution to figure out what to do based on the facts, there’s no finger-pointing. It’s important to set up a top-down culture.

Roberta Fusaro: You’ve set the structure, changed behaviors, and got your people to buy into your ideas. Once that spark has been lit, it’s hard to extinguish. What is it about building something new inside a big company that becomes addictive?

Jason Bello: I think the thing that is so addictive, especially about corporate venture building, is that you have tremendous advantages. If you think about a start-up, they spend half their time building their product and half their time pitching to investors. That investment case is often much more streamlined because you know that the people making the investment are those on your leadership team and your board. You take away the huge pain of building a business.

Then you add to it the advantages you have as an incumbent. You usually have the customer base that you’re going after, or you have some kind of untapped intellectual property that you can leverage. I do a lot of work now with clients that have valuable data, and they want to find new ways to monetize their data.

They’re sitting on that data and not doing anything with it. There is the advantage of having the nugget ready-made for you. Plus, this way, you take away the pain of having to go cup in hand, investor to investor, looking for investment. That’s what makes corporate venture building so addictive. But it does come with its pains as well. Big companies struggle to move or even do things differently. So that’s why having the right leadership makes such a difference.

You asked a question earlier: “What do great leaders do culturally?” I already spoke about one: setting the tone of “It’s okay to fail.” Another thing is that great leaders are actually in the weeds a little bit. Leaders must have a top-down perspective, but they also need to complement that with an understanding of how products work and what the customers’ needs are.

I think that’s important to making a business a success as well. When you really understand your customer, how your products are being used, and the actual workflow of the product, it makes all the difference in being able to steer a team toward the right answer.

Roberta Fusaro: I would be remiss if I didn’t ask you about the businesses that you’ve built and the initiatives that you’ve been involved with. Which of these businesses are you most proud of?

Jason Bello: The thing that I get the most pride in is when I have built a business or helped a client, and within a year of us sitting in a room thinking through the idea, I see it in the wild, unrelated to the client. I’ve done a business where we built a new durable-medical-equipment device that helps with mobility, and I’ve seen people using it.

We’ve built software that helps people get appointments with healthcare providers much more easily using AI, and I’ve been on a neighborhood group chat where people have recommended that particular product. When you see your own work in the wild, it is the most exciting feeling.

Roberta Fusaro: It reminds me of those stories that you hear about musicians who say, “I heard my song in a cab riding through New York, and I heard myself on the radio.”

Jason Bello: A lot dorkier, but yeah!