What’s not to like about startups? Picture a bunch of young people working from their parent’s garage just to impress that one venture capitalist someday in the future. Full of creative energy, passion, and purpose. Ready to live the dream. Young CEOs and startup founders are the new rock stars. Retiring by age 40 is considered the ultimate success. Since the start of this century, companies of all sizes have been carried away by the romance of the startup company driving radical innovation. By the year 2010, large billion-dollar companies were relentlessly searching for golden-nugget startups to acquire – either as a catalyst to modernize their business or simply for the sake of marketing.
After a few years, the gold rush seems to be over. Small startups have not always proven to be trustworthy. After all, there’s a reason why “Fake it till you make it” has become Silicon Valley’s tagline. Also, the expectation that the acquisition of a startup will kick-start creativity across the whole organization rarely becomes a reality. More recently, since the COVID-19 pandemic and the subsequent economic crisis, big corporations have been forced to rebalance their collaboration strategy as many small companies may not survive the crisis.
Startup versus Corporate
So, is the startup dead? I sincerely hope not. The economy will once again shift up a gear and our world will change even more rapidly. What type of company is better suited for the next rollercoaster ride than an agile startup? We need energetic startups more than ever to create the future we want to live in. But I do believe startups will have a more difficult time selling to large corporates if they cannot find a solution to the problem of long-term trustworthiness and solvability.
When thinking of solutions to overcome these problems, two seemingly simple questions come to mind: what makes a startup attractive? And what makes a long-established organization attractive? A key difference is that while existing companies execute a business model, startups are still looking for one. Aiming for radical innovation, they operate under uncertainty, striving to develop a value proposition and business model that’s scalable and repeatable. The ones that ultimately succeed don’t follow a master plan but quickly learn, adapt, iterate, and improve on their initial ideas. This is one of the reasons why there is often a love-hate relationship between startup culture and established companies and why many people are very outspoken about “what type of company they would like to work for”.
PropTech innovation
At Spacewell we addressed these challenges when we started developing our Cobundu Smart Building platform back in 2016. Our ambition was to bring radical innovation in the slow-changing world of real estate and the still very immature PropTech landscape. We found it was almost impossible, however, to convince people that a mature company with 30+ years of experience could be as agile and disruptive as we said we were. The obvious choice then was to let Cobundu and its development team operate as a startup within the broader organization. Over time we have learned what the sweet spot is between big and small and to get the best of both worlds. As a result, Cobundu was able to scale up and evolve into the mature product it is today.
Although there are a million things to talk about, I just want to list 5 key takeaways here that I often talk about when people ask me about the success of Cobundu within the Spacewell organization.
How to drive radical innovation: 5 key takeaways
- Direct reporting lines: Your start-up spirit and mentality are dead the moment you become part of the corporate hierarchy. Agility is key and is lost if you cannot make decisions quickly. Direct access to the company’s though-leadership and direct reporting lines to C-level management are crucial.
- Carve out your own space: As part of a bigger organization you could easily make the mistake of using all the available corporate facilities. Instead, claim your own workspaces and meeting room; make it yours. Your team should be together a lot. Being together boosts morale and team spirit; it also facilitates instant knowledge transfer. Don’t hesitate to introduce your own limited set of rules and procedures, especially if it helps boost the fun & team culture factor within the group.
- Focus: Do not fall for the 50/50 trick. If people work on innovative product development, they must be able to fully focus and not be distracted by other corporate projects and tasks. Period.
- Brand it: When you go out and sell your product, present yourself as an independent startup when that brings an advantage. Let companies understand you are part of a bigger group if it helps. We have often been at conferences and exhibitions where the small startup charm worked wonders to attract a lot of new eyes to our product. But just as often, the numbers and solidity of the group helped to eventually close the deal.
- Give back to the organization: After a while, the startup team gains skills and expertise that can be very beneficial to the wider organization. The concept of user experience journeys and storyboarding, for example, proved very successful in the Cobundu team. That’s the time to go out and educate the rest of the organization on how this approach created success.
