While small startup companies are trying to impress the world with big ideas, big companies are struggling to compete with the innovative startups. Scott Kirsner, editor of Innovation Leader, writes that large companies are afraid of being eliminated by smaller businesses like how Netflix or Uber transformed their respective industries and made giant companies obsolete. Kirsner outlined how big companies struggle to compete with startups when it comes to innovation:
“It can be easy to count the number of innovation workshops held at company outposts around the world, or tally revenues from add-on services developed by an innovation group and then handed over to the sales force. But white-sheet-of-paper innovation efforts are fundamentally different from growing and optimizing existing lines of business. Apple founder Steve Jobs famously didn’t believe in focus grouping new products, and when Starbucks founder Howard Schultz wanted to create a totally novel coffee-buying and drinking experience, he didn’t order up market research. The result? Products like the iPad and Starbucks’ new Reserve Roastery and Tasting Room in Seattle, a prototype for future Starbucks flagship stores.”
Big companies don’t have much patience for failure when it comes to innovation. When they spend money they want immediate results. Startups on the other hand are more likely to have patience and put in years of time and effort to see their ideas come to fruition.
“In businesses with billion-dollar bottom lines, it’s nearly impossible to create significant ripples in a year or two. Many of the startups now disrupting major industries like hospitality or media had four or five years to figure out what opportunity was actually worth pursuing, and build a working mechanism for attracting customers. After all, their survival hinged on figuring out how to make things click.”
So, it seems that the biggest advantage that startups have is that they have nothing to lose while big companies have everything to lose. What is your startup’s vision for the future?
Image Source: Harvard Business Review
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