THE LANDSCAPE
Innovation has changed throughout history. Nowadays, almost all industries have been challenged by startups.
JUST A FEW DECADES AGO…
Corporations dominated the business landscape
Big companies evolved at their own pace with no need to innovate
Changes were generational and companies had enough leeway to adapt to technological changes
Young professionals aspired to have a long and stable corporate career
BUT THE STORY IS BEIGN REWRITTEN
And now startups are shaking up the scene
Disruption does not only pose a threat to tech companies anymore…
Most industries have been challenged by startups as they have and continue to be far more efficient in generating disruptive innovation
However, due to limited resources and a lack of proper market validation, 90% of startups fail
THE PROBLEM
Disruptive innovation is not getting there. So let’s understand what is blocking them…
Corporations’ challenges to innovate
Corporations are usually efficiency-driven, process focused, and structurally rigid.
01_
Focus
The core-business always comes first. With a pressure to deliver short-term results, and a focus on extracting value from the activities the company already excels at, corporations leave little to no room for any kind of breakthrough.
02_
Process
Efficiency demands structure and rules. With a long, convoluted bureaucratic process the communication and decision-making process is extremely slow. So much so that when the new product is ready to launch, the market has already changed and all the resources invested are practically lost – it’s a harsh reality, and we’ve been there.
03_
Politics
If you’ve ever worked on a corporation, we are sure you’ve heard the expression ”we just need to align it with the other department”. It might seem harmless, but combined with the other barriers and internal politics it can kill or severely hamper innovation, affecting employees’ morale in the race for a breakthrough.
04_
Talent
This whole scenario – combined with high profile success cases from young entrepreneurs – has put corporations at a disadvantage to attract and retain high-potential, innovative talents, who are increasingly interested in joining a startup or launching their own venture, regardless of the risks involved.
Startups’ roadblocks to succeed
Startups usually have very limited resources, high customer acquisition costs and lack sector know-how and data.
01_
Clients
Client acquisition is the number one priority for every new business. A great value proposition isn’t enough. Startups struggle to create brand awareness and gain market access, making it more difficult to identify their early-adopters and establish the right product-market fit.
02_
Funding
Great talent doesn’t come cheap, either does brand awareness or clients. There is no magic, a startup needs funding (and creative bootstrapping solutions). With limited resources, cash flow management can be harder than climbing the Everest… blindfolded.
03_
Know-how
The startup might have a dream team, but they most likely lack the specialization and seemingly endless access to data that corporations have. Even the best CTO might have trouble teaching an airline company how to build an airplane…
04_
Know-who
More than brand awareness, it’s important to build brand credibility. Initially, the startup will lack recognition, making market access to suppliers, partners, and stakeholders almost impossible.
THE MAGIC
A new model of innovation and collaboration will arise. Welcome to the corporate venture building revolution.
Walls between corporations and startups will come down, combining their best attributes: a startup’s agility, culture and flexibility with a corporation’s reach, experience and resources.
Together they will create a new breed of startups, which will be far more competitive than their predecessors, and will be able to grow faster, dramatically improving survival rates and generating truly disruptive innovation while addressing market’s medium and long-term opportunities.
This is how corporations and startups mutually benefit one another:
