Recently, we explained why collaborations between corporates and startups might be tricky to execute successfully. From the challenges in implementation, through misaligning on goals and expectations, to just not being the right fit for each other, there are a lot of things that can go wrong and lead to unfruitful innovation theatre.
Despite that, there are still many things corporates and startups can learn from each other. Most established organizations might not see what first-time founders can teach them, but sometimes looking at things from someone else’s perspective helps you come up with unexpected ideas. Furthermore, intrapreneurs are considered a crucial source of innovation. We have worked with companies from various industries, at different stages and solving all sorts of challenges. Today we want to share some of those learnings that we gathered working closely with entrepreneurs. Many passionate founder teams have inspired us to change the way we approach certain things. And hopefully, our learnings will inspire you too!
Scarcity of resources is a feature, not a bug
Startups start off with little resources, and that creates a bias towards actions. Founders think twice before making any decision. Should I invest another 500€ in Google Ads or use the money elsewhere? It is the limitation that fosters the most effective (and creative!) utilization of resources. They say necessity is the mother of invention for good reason.
Another necessity that startups have is gaining traction fast and thus getting to the market as soon as possible. While it is tempting to develop an ideal, full-blown product before launching (read more about mistakes when launching product), many are missing the fact that it is still not proven that their product will actually take off and customers will accept it. By taking the Lean approach and launching faster in iterations, startups have space to learn and validate before allocating more resources.
Need it to go fast? Do it yourself.
Every founder knows it – you start the day as an accountant, by lunch time move on to Social Media Manager, and end the day doing sales calls. With little structure and resources, bootstrapping is often the way to go. Taking on several roles simultaneously in a startup is essential, and everybody does a bit of everything.
Corporates having a department for anything sounds like luxury at this point. And while it could be a strength for executing in practice, it can slow down innovation drastically. The reliance on others and all the extra steps involved with outsourcing takes too much of our most valuable resource – time. Therefore, we celebrate the do-it-all mentality of startups and strongly recommend anyone to try it out. Taking things in your own hands can sometimes take you to surprising results.
Need to go far? Get the right people on board.
“Find your allies early and keep them in the loop”. That is something that we have heard many times from successful entrepreneurs. Again, we speak of necessity. With the liability of newness startups must rely on building strong connections and finding the right partners early on. Whether it is partners that get them closer to customers or closer to funding – managing a pipeline of partners is something that startups are often very good at.
The keeping in the loop element is especially crucial here. Many make the mistake and wait to communicate only when big things happen. However, even writing quarterly updates about small progress and maybe even struggles can benefit a partnership. And, who knows, they might just have the right advice for you!
What we often experience with corporate teams is that they rely too much on the corporate behind them, while also underestimating internal stakeholder management. Bringing internal stakeholders on board early enough can save a lot of trouble later during the innovation project. Building and maintaining the right connections is key to progress and worth every minute of effort invested.
The guts to fail (and get back up with a pivot)
We get it. It hurts to fail! However, it prevents you from running too far into the wrong direction. Failing fast provides you with learning for a more successful future in the long run. As Rita Mae Brown has said: “insanity is doing the same thing over and over again and expecting a different result”. We have often witnessed corporate teams being stuck on initial ideas, as this is what they have pitched to the board. However, if they focus on staying accountable for what they promised in the beginning, they might just miss the chance to pivot to something great. If there is just one thing that corporates must learn from startups, it is to embrace failure.
Skin in the game
With our own accelerator ELEVATE, one of the deciding criteria for the selection of startups is motivation. We want to know that the founders are fully committed and in it for the long run, despite the ups and downs. And the same goes for any other investor. After all, the success of the venture heavily relies on the motivation and capabilities of the founder.
Luckily, most of the time, startup founders show extreme passion because they are personally invested in the business. For corporate innovators things are a bit different and it’s natural that their motivation sometimes doesn’t match that of a founder. While this opens up the safe space for innovation for more (risk-averse) employees, it’s important that they are still driven and passionate about their goal. And, in order to combine the quantity with the quality of innovation activities, we urge corporates to find innovative ways to allow their entrepreneurial employees to have skin in the game.
Not everyone is made to be an entrepreneur. Yet, we can all learn from startups and their best practices. These are just five of the biggest learnings that we gained in our experience with passionate and inspiring startup founders. If you would like to get inspired how to step up your own innovation game, we would be happy to help you begin your journey. Get in touch with us to see where it could take you.