Newsletter No. 14 | Outgrowing the Core | Build Within or Break Away?
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Ever tried to bake a muffin in a cake form? You could make one huge muffin—but then people might still call it a cake. You could try to divide the batter into sections—but that’s clunky and probably won’t rise evenly. Or you could admit that muffins just need their own form. That’s what it feels like to build a high-potential venture inside a legacy business. It kind of works. But not really. Not because the idea was bad. But because the container wasn’t made for it.
One Insight from Me
Studies show that spin-offs from existing companies tend to survive longer than traditional startups. According to research published in ResearchGate, spin-offs—particularly those formed from proprietorships—benefit from foundational resources, market experience, and embedded trust. Investors often prefer them, too.
As VentureBeat noted, spin-offs attract capital more easily because they carry less risk and leverage an existing company’s infrastructure and credibility. That said, success isn’t guaranteed. A Harvard Business Review article cautions that while many spin-offs start strong, they still need the right execution, clarity of purpose, and market alignment to truly deliver value.
So yes, spin-offs have an edge—but only if you give them the room to operate like real ventures, not internal pet projects. You already have what others spend years chasing: cash flow, industry insights, distribution, and trust. But to unlock that edge, you need to stop treating every new idea like a department.
Business units are built for control. Startups are built for speed and growth.
And when you try to do one inside the other, you get neither.
Here’s what usually happens:
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You build a great idea—but decisions take 4 months.
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You find early traction—but the sales team won’t push it because it's not "core."
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You want to pivot—but first, someone from Finance needs to rerun the "Deckungsbeitrag" (margin).
You think you’re building a business. But actually, you’re pitching a budget.
Venture logic and business unit logic are different species. If you want innovation to grow, you have to give it a structure that fits. Not sure whether your idea is a venture or a business unit candidate? Read on, I'll share how you can find out.
So what does a successful spinoff look like?
Let’s look at 3 Zurich-based NextGen spinoffs that did it right by ditching the muffin tin and building their own bakery. These aren’t distant case studies from Silicon Valley—they’re right here in our backyard. And they show what’s possible when local businesses dare to evolve.
BLP Digital (from BLP)
From: ERP product and integration services with limited scalability
To: A modular SaaS platform focused on document automation and process optimization
What changed:
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From tailored ERP implementations to scalable SaaS workflows
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From project-based revenue to recurring subscription income
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From product extensions within ERP systems to platform-independent automation solutions
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From deep system integration to lightweight, modular data processing
Based on public information, BLP Digital secured a 7-figure funding round within a year, spun off its operations, and built a dedicated team. While originally tied to ERP workflows, the company repositioned itself as a product-led automation venture—suggesting a deliberate shift from operational enhancement to innovation enablement. This kind of transformation likely wouldn't have happened within a traditional ERP delivery model, which tends to prioritize stability over exploration.
Microlino (from Micro Mobility)
From: Urban scooters
To: A fully electric car for city dwellers
What changed:
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From small gadgets to regulated vehicles
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From toy-like branding to lifestyle positioning
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From retailers to mobility platforms and D2C
What happened: As of 2024, Microlino is rolling out thousands of cars across Europe. That would’ve been unimaginable under the original Micro brand — both from a customer trust and operational standpoint.
John Baker (from Jung Bäckerei)
From: Traditional family bakery
To: Premium sourdough brand with cult status
What changed:
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From mass-market to artisan premium
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From chain stores to destination cafés
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From "we bake bread" to "we bake slow bread, with soul"
What happened: They became a cultural symbol for Zurich’s slow food movement — and opened multiple locations without diluting their premium identity. A sub-brand would’ve been too constrained; a full spin-off let them rethink everything from flour to floor tiles.
One Question for You
Where in your business are you trying to innovate—but using a container that was designed for something else? Ask yourself: Are we building something new—or tweaking something old? Do our structures match our ambition? Are we scaling ideas—or squeezing them into old forms?
Here’s a quick check to go deeper:
1 | Does the venture target a different customer segment?
2 | Would it benefit from its own brand?
3 | Does it need different capabilities than the core team has?
4 | Are decisions slowed down by internal processes?
5 | Would outside investors or partners take it more seriously as a standalone?
If you answered “Yes” to 4 or more, it’s time to seriously consider a spin-off or hybrid structure.
One Opportunity for Us
Last year, I shared the story of a venture I’ve been helping shape—one that started as a side project and quietly turned into a spin-off candidate. Along the way, we explored questions of control, culture, brand, and market fit. It was messy. And worth it.
This isn’t just for corporates. I’ve helped smaller Swiss companies morph parts of their business into something entirely new—without losing their legacy. The big picture? Some of the most successful ventures aren’t startups in the traditional sense. They’re second-generation bets built on top of stable, legacy foundations. But that only works if the structure matches the ambition.
If you’re wrestling with whether to launch something new inside your business or outside it, have a look at newsletter no. 14. It will help you assess if your venture fits the current model. If not, let's chat. We could explore spin-off or hybrid structures or build the right roadmap for brand, team, and go-to-market.
Let’s make things rise—the right way.
