Common Ground: Five Areas Where Start-ups and Corporations Can Collaborate to Achieve Growth

I’ve had the opportunity both to spend a significant part of my career working in and for Global Fortune 500 companies and to be a serial entrepreneur building start-ups. In many ways the two worlds are nothing alike, and in other ways they share some deeply important traits. These traits are easier to see in start-ups but get layered over in larger, more mature companies.

Invariably, in times of economic crisis or market disruption—and right now we are experiencing both—we tend to go back to our roots and search for the things that made us successful in the first place. The biggest danger I’ve seen in reaching back to apply learnings from “the early days” of start-ups is in confusing what elements were right contextually for that stage of growth and what elements are truly transferable.

Here are the five areas of common ground that are relevant challenges to both entrepreneurs and corporations.

1. Focus on entrepreneurial values, not on strategies and tactics.  

Almost every big corporation has roots in a successful start-up experience. It is not always possible to discern what parts of the early experience are worth emulating and what parts would be deadly to attempt in a larger company. Similarly, not all start-ups understand the true drivers of performance that successful entrepreneurs know.

Here is the key: Don’t focus on the strategies and tactics of a start-up and then try to apply them to more mature organizations. The better answer is to understand the underlying principles and values that make the tactics relevant both in a start-up and through ongoing growth.

Lean start-up, just ship it, minimum viable product, agile methods, pivoting, and other tactics being used by successful start-ups today are right for a start-up culture, where resources are scarce and brand awareness is low. These tactics, however, are based on some core values that are scalable:

• Be relentless in listening to the customer. Make yourself relevant to a problem they are trying to solve while not over-investing in untested ideas.
• Be courageous in decision making and willing to change course and adapt.
• Be passionate about your product and ideas. Sometimes passion is the only thing that pulls you through the endless periods of doubt and uncertainty all start-ups go through.
• Be fast to market with a quality product that addresses the core felt need of your customer base.

I see too many large companies trying to emulate start-up methods only to implode on the launch pad, when they could have gotten far better results by focusing on the underlying values that drive an entrepreneur. Large companies should apply those tactics, adjusted for the scale, risk, and resources available to a more mature organization.

Strategies and tactics will change as companies evolve. The entrepreneurial values should not.

2. Seek authenticity. 

The market disruption that is happening today is being fueled by how people make choices on what to buy, where to buy, and when to buy. The age of mass communication telling people (aka consumers) what is true, good, and beautiful is coming to an end. We are now in the age of participation, conversation, and a return to local community. The new world of social media is clearly casting its shadow on social commerce. From the Renaissance period up until a hundred years ago, before TV and radio, conversation and word of mouth were the primary ways we learned about what to buy and what was good. The reconnecting of our social networks now layered with transparency on product choices is simply instigating a return to the campfire and kitchen table.

This frightening new development exposes who we are, what we believe, and the depth of our passions. It’s called “transparency,” and for big companies that have lost the passion and clarity of their founders, it is very unsettling. For Starbucks, Virgin, and the like, which have active founders who are very much engaged, this isn’t that troubling. However, for large, mature corporations two and three generations away from the passionate founder, this is not a good development.

For start-ups, it is critical to have an idea you are passionate about and can speak on with authenticity. There are far too many more start-ups that are launching ideas rather than companies and that are not passionate about those ideas or that fail to have an authentic connection to the customer problem they’re trying to solve.

With today’s technology, the level of transparency will quickly expose the authenticity behind the message—what really is behind a brand or company. This is extremely relevant to big corporate marketers who are trying to align sterile, empty brands with social cause, common good, and content. Being authentic means letting your passion for the customer and your product seep through the pores of your business into all touch points with your customer.

This search for authenticity is coming straight from the customer, and start-ups like Project 7 are doing a great job of answering the call. Their relentless commitment to what they believe in, the storytelling, and all the touch points are aligned behind an authentic passion for changing the world that they live in, from the inside out. This is a great company that start-ups and corporations can learn from in terms of authenticity and how it plays out holistically.

3. Go to the fringe and find creativity.

Based on my experience in working in creative offices around the world, a constant pattern emerges of where the most ideas are coming from: the fringe, the outpost, the outliers—those on the edge, farthest away from the center.

According to an IBM study of 1,500 CEOs conducted last year, creativity is the second most important competency a leader needs to have, preceded only by the ability to manage complexity. Creativity and the ability to find brand-new solutions to existing problems are at the core of market stimulation, start-up success, and corporate top-line growth. The old answers don’t work anymore in a market disrupted by technology and consumer change.

Creativity can be learned, and it is now an essential tool for start-ups and corporations to master. I’ve found some simple principles that work in increasing personal and organizational creativity:

• See creativity as an organizational, systemic process, just as important and relevant as, for example, running payroll.
• Go beyond brainstorming. The best creative ideas reveal themselves when pursuing insights about the problem and the human condition. If you want disruptive ideas, swap brainstorming for digging deeper into insights and the humanity behind the insights.
• Many great ideas emerge when surmounting the barriers in your way as you pursue your passion. There are hundreds of start-up stories, from Flickr to Twitter, where in the pursuit of a passion, a problem was encountered, and in solving that problem, a new, bigger, transformational idea emerged.

4. Crack the code on collaboration. 

I’ve been to a number of industry think tanks and corporate brainstorming sessions over the last six months, and along with the topic of authenticity, the issue of collaboration is always on the table. Collaboration is the ability to work across teams, organizations, and companies—to work internally and externally in order to bring to life a breakthrough idea. Collaboration has surfaced as a new issue for companies because of the complexity and interconnectedness of technology and ideas. The social technologies alone have condensed PR, external relations, marketing, and sales into a singular, dynamic conversation with the customer that can take the shape of an idea, a complaint, or a thank-you across multiple channels. Organizational silos built to optimize efficiency no longer work, yet our ability to collaborate is well behind the need to collaborate.

The specific challenges on collaboration get into accountability, IP, security, tools, firewalls, trust, workflow, cloud-based platforms, file and asset management, and a host of sub-issues not easily solved.

We need new models for collaborating that allow start-ups to engage a broader resource base, including larger corporate teams and teams that operate beyond the firewalls of internal environments.

There are a few things happening that give us a glimmer of hope. Coffee and Power, started by Phillip Rosedale, one of the more advanced thinkers and doers, reveals what collaboration might look like at scale in the future.

5. Learn to scale, pivot, and change. 

“How do we scale?”

“I’m struggling—how do we go from 15 to 45 people?”

“What do I need to change in order to scale?”

“That is an interesting idea for a start-up, but will it scale?”

These are the typical questions and challenges faced by both start-ups and corporations wanting to expand a new idea. I’d suggest the topic of scale is one where both corporations and start-ups have a lot of shared interest, knowledge, and opportunity to get better growth. Harvard Business School professor Noam Wasserman published in 2003 a landmark study on the topic of company founders’ ability to scale and the succession issues that relate to scale. One of the things that separate a successful, mature company from a complex organization is its ability to scale.

In scaling new ideas within start-ups, there is the ability and (usually) agility to pivot a business model a little more easily than a large corporation can. The challenge for a large organization is in idea adoption and change management. A PhD in organizational change management will almost be required for a brand-new idea to survive in established cultures and business models.

A great case study on scaling, pivoting, and change is the transformation of Fabulous.com to Fab.com, where the founders along with their business model had to make a dramatic transition in order to survive. Not many can pull this off, but there is a lot to learn from them about how they made their decisions and their path of transformation.

When you look at what start-ups are trying to achieve and the headwinds facing established corporations, the areas of common ground—in entrepreneurism, authenticity, creativity, collaboration, and scaling—are fertile for new learnings and epiphanies that can benefit everyone and drive better growth.