Six Lean Lessons For Corporate Startups

Egg Incubator

Big corporations want to build the next Facebook, Twitter, or Groupon as much as you, I, and the entrepreneur in a garage somewhere.

While corporations might have an advantage in resources and capital to do so better than anyone else, they do at the same time meet with challenges that independent startups don't.

Over the past years I've been fortunate enough to learn from corporate finance analysis, product launches, and early-stage M&A assessment on the one hand, and from founding and funding new startups on the other. And there is a pattern; the methods used by big corporations often turn counterproductive when launching new ventures.

Besides from knowing your customer development and lean startups basics, I share here some musings that you should consider if you want your corporation to innovate like a startup.

Rehabilitate from analysis paralysis

While a challenge in corporate business planning is that it often is comprised with mountains of information—in an early stage startup there usually is a minimal quantifiable track record.

Doing what they do best, corporations cram old information about existing products and markets to that of the startup. Executives and managers have founding teams develop detailed financial estimates and market analysis way too early.

Secondary data may be good for known and proven conditions, but not for unknown conditions, which most often is the case of new startups. The answer lies not with your thousand dollar Gartner report. Rather, it is time to un-MBA and get out of the building.

Learn like your kids would

With time grown-ups gradually stop learning. Kids, however, learn all the time. Kids experience their environment and make assumptions which are tested against reality, again and over again. For companies adopting new technologies in a fast pacing and quickly changing market the learning process is not much different.

Emerging entrepreneurial methods such as Lean Startup and Customer Development assume that startups are children, not smaller versions of mature companies. So, startups need their own methods and tools, which means it is time for even high-paid managers to get their hands dirty.

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