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.
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.
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.
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.
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.
A new model of innovation and collaboration is arising
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:
The sheer muscle behind large companies distributive models makes them the ideal platform to develop disruptive go to market strategies needed to accelerate growth and properly serve any type of customer.
61,7% of unicorns “the billionaire startup club” have been funded by corporations at some point. Both corporations and startups have realized that channeling resources throught a startup’s model pays off.
Building a brand is a long process. By building a new brand together, the startup grows its awareness and reputation faster, while the corporation enhance a fresh and innovative image.
Corporate validation of the startup’s business model brings an additional layer of safety to the table, building a far greater rapport with prospective investors and potential partners.
Lean and agile techniques are more than a methodology, they are a MINDSET. A desicion making process based in market validation and testing makes for a more effective and quick entry into the market.
“Move fast and break things” represents the culture at many startups. With a high motivation and willingness to risk, failure is seen as an opportunity to rapidly evolve and improve the business, which is vital to boost innovation.
Top talent increasingly interested in joing a startup or launching their own venture. By actively engaging with startups, corporations can refresh their brand image makeing it more attractive for this audience.
More than having an original idea, startups also innovate by challenging current business models with a fresh and audacious vision. i.e: AirBnb’s business model.