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Is the start-up way of working really different than the corporate one (by Frederik Wouters)

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How do you set up your venture and accelerate growth? Start-ups are in a fundamental different position than corporates. As a consequence they play a different ball game. What can the start-up culture learn from the ’60s?

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Is the start-up way of working really different than the corporate one (by Frederik Wouters)

  1. 1. 3.1 Is the start-up way of working really different than the corporate one? 1 CONFIDENTIAL Template Innovation Day 2019CONFIDENTIAL IS THE START-UP WAY OF WORKING REALLY DIFFERENT THAN THE CORPORATE ONE? Frederik Wouters Business Development Director frederik.wouters@verhaert.com TRACK 3 MyStartUp
  2. 2. 3.1 Is the start-up way of working really different than the corporate one? 2 CONFIDENTIAL CORPORATE VS. START-UP
  3. 3. 3.1 Is the start-up way of working really different than the corporate one? 3 CONFIDENTIAL STARTUP VS CORPORATE It is the startup driven change that frees us from the straitjacket of conventional wisdom and lets us try to build a better world. The experts that inhabit this world are experts in a previous version of the world. They do not aim at inventing a new future and as skeptics never do the seemingly impossible.
  4. 4. 3.1 Is the start-up way of working really different than the corporate one? 4 CONFIDENTIAL HOW START-UPS WORK?
  5. 5. 3.1 Is the start-up way of working really different than the corporate one? 5 CONFIDENTIAL HOW START-UPS INNOVATE? … sooner or later you need to scale (as a corporate).
  6. 6. 3.1 Is the start-up way of working really different than the corporate one? 6 CONFIDENTIAL You have a customer base and asks yourself what products or services can I sell to my customer base ? HOW CORPORATES INNOVATE?
  7. 7. 3.1 Is the start-up way of working really different than the corporate one? 7 CONFIDENTIAL CORPORATES VS START-UPS Social & economic impact PeopleOrganization Scale Shareholders, taxes & employment Added value Brand & quality 1 of many Thinker Security Limited Vc- & funding capital Hierarchy Sluggish Focus on sustainability Huge funds Team Agile Pivoting No leverage Individual Ownership Doer Uncertainty
  8. 8. 3.1 Is the start-up way of working really different than the corporate one? 9 CONFIDENTIAL AN EXPONENTIAL PACE
  9. 9. 3.1 Is the start-up way of working really different than the corporate one? 10 CONFIDENTIAL ANTICIPATING EXPONENTIAL CHANGE IS POINTLESS How to keep up ? Learn/change faster than competition to survive. Receiving feedback on launched MVP’s & improving them. But at this speed corporates or in conflict to launch products too fast.
  10. 10. 3.1 Is the start-up way of working really different than the corporate one? 11 CONFIDENTIAL CORPORATES ADOPTING STARTUP MENTALITY In 2013, GE launched FastWorks using The Lean Startup Nov 2017: Did Lean Startup fail at GE? Hundred years of management education focused on building strategies and tools that formalized execution and efficiency for existing businesses. Eight years of startup management education.
  11. 11. 3.1 Is the start-up way of working really different than the corporate one? 12 CONFIDENTIAL ARE SILICON SAFARIS CRACKING THE SICILICON VALLEY CODE ?
  12. 12. 3.1 Is the start-up way of working really different than the corporate one? 13 CONFIDENTIAL ADOPTING STARTUP TECHNIQUES
  13. 13. 3.1 Is the start-up way of working really different than the corporate one? 14 CONFIDENTIAL START-UP & CORPRORATE INNOVATION INITIATIVES Direction of Innovation Flow Outside-In Inside-Out EquityInvolvement No Corporate Venturing Participation in the success and gaining strategic insights into non-core markets. Corporate Incubation Provide a viable path to market for promising corporate non-core innovations. Yes Foundry / Accelerator (Outside-In) Insource ext. innovation to stimulate and generate corporate innovation. Hackathon / Startup Program (Platform) Get startups to build products using corporate supplied technology to expand the market for the corporate
  14. 14. 3.1 Is the start-up way of working really different than the corporate one? 15 CONFIDENTIAL START-UP & CORPRORATE INNOVATION INITIATIVES Success Factors Corporate Venturing • Clarity about strategic mission (financial or strategic). • Positioning toward the startup world (independent or parent- bound) Corporate Incubation • Autonomy from corporate influence and procedures. • Authority to access corporate resources. Foundry / Accelerator (Outside-In) • Precautions w.r.t handle IP issues of co-developed innovations. Hackathon / Startup Program (Platform) • Clarity about revenue model. • Capability to handle large numbers of collaborating startups simultaneously.
  15. 15. 3.1 Is the start-up way of working really different than the corporate one? 16 CONFIDENTIAL START-UP & CORPRORATE INNOVATION INITIATIVES Investment needs (multiple years) Organizationalchange Innovation labs Co-creation with partners Hackathons & Accelerators Corporate Incubators Corporate venturing Procedures for • Startup selection • Contracts • How to evaluate the performance of the chosen collaboration • Continuous Improvement • …
  16. 16. 3.1 Is the start-up way of working really different than the corporate one? 17 CONFIDENTIAL WHAT ALTERNATIVES ARE OUT THERE …. • Bold experiments to learn to fail • Two is better than zero • Two pizza’s team • Ownership & responsibility • “microservices” Architecture • Customer obsession rather than competitor focus • Builders and pioneers
  17. 17. 3.1 Is the start-up way of working really different than the corporate one? 18 CONFIDENTIAL WHAT CAN WE LEARN FROM WHAT AMAZON DID
  18. 18. 3.1 Is the start-up way of working really different than the corporate one? 19 CONFIDENTIAL WHAT SILICON VALLEY BOOSTED CULTURE MONEY
  19. 19. 3.1 Is the start-up way of working really different than the corporate one? 20 CONFIDENTIAL A MATTER OF CULTURE • California bans non-compete clauses. Otherwise society loses, as the best talent remains stuck in established firms, unable to job hop to start ups • Quitting safe jobs for a risky startup • Failure is just another step towards success, rather than the end of one's efforts. (Fail fast / Fail often / Fail better / Fail forward) • Resilience and the ability to bounce . • Stanford engineering graduates start their own businesses rather than head east • BHAG - do the seemingly impossible: the official US response to Sputnik - first on the moon • NASA & DARPA stimulated anyone to develop a good idea as well as a bad one, throwing money at anything.
  20. 20. 3.1 Is the start-up way of working really different than the corporate one? 21 CONFIDENTIAL A MATTER OF CULTURE • 80% of all electronic companies has been founded by people ones working at Fairchild • Founding Fathers of Silicon Valley • A culture of personal networks built out of a decade of collaboration • Minuteman II missiles ramp-up, with 6 missiles built every week in 1964. • NASA bought 60% of all the IC”s. Fairchild sold NASA 100,000 integrated circuits just for the Apollo program in 1964 • Ramp up mass-production the price dropped from $1,000 a chip to $20 . • Space Shuttle blasted off with help of the 8086 becoming the core of IBM’s PC product line 1980s • Transistor, BSD, TCP/IP, Arpanet & Netscape , ARPAbet, • Larry Page and Sergey Brin later dreamed up Google • SUN, …
  21. 21. 3.1 Is the start-up way of working really different than the corporate one? 22 CONFIDENTIAL A MATTER OF CULTURE Hippie counterculture • Personal freedom & liberation • A better world • Restrictions of parents or conservative • Creating new ways of living / utopias • The Homebrew Computer Club DIY hobbyists creating their own computers. • Give to help others - getting advice and discussing the latest innovation • Fabricating semiconductors reliably was a black art start sharing best practices with co-workers and competitors. • Pay-It-Forward culture - ‘I was helped when I started out and now it’s my turn to help others’
  22. 22. 3.1 Is the start-up way of working really different than the corporate one? 23 CONFIDENTIAL SILCON VALLEY – 2nd period • Capital gains tax 35 percent to 28 for assets held more than one year • Small Business Investment Company program • Dramatically expansion of money available • Venture capital has now become Founder-friendly • Open source software & hardware (Facebook, Amazon, …). • Computing power as a utility • Launch & spread of ‘The Lean Startup’ The cost of getting the first product out the door has dropped by a factor of a 100 . Venture Capital Investment / Area
  23. 23. 3.1 Is the start-up way of working really different than the corporate one? 24 CONFIDENTIAL A MATTER OF CULTURE • An entrepreneurial mindset on the University • The Hippies heritage • A culture of risk taking & failure attitude (entrepreneurship) • A Major social challenge (BHAG) for a better world • Massively cheap no-critical governmental money to pioneer , explore & innovate • Lead users that helped in decreasing price levels ACCESS TO MONEY
  24. 24. 3.1 Is the start-up way of working really different than the corporate one? 25 CONFIDENTIAL HYBRIDIZATION OF CORPORATE & STARTUP INNOVATION Start-ups and corporates to work side by side in the same office by 2025 Need for new structured methods and effective collaboration programs with startup’s • Make pivots more successful • Decrease amount of failing startup’s • Lower the cost of organizing collaboration and making scale up of new business profitable SELECTION CREATING IDEAS Counterculture Open source software & hardware Risk taking ability Your BHAG Funding or assistance to First customer(s) Best practices platform Methodic guidance & metrics Generic KPI’s
  25. 25. 3.1 Is the start-up way of working really different than the corporate one? 26 CONFIDENTIAL THE PATH TOWARDS SUCCESSFUL PRODUCTS Solution building and validation should be managed in a holistic way SOLUTIONBUILDING VALUECREATION CONTEXTUAL RESEARCH IDEATE CONCEPT IMPLEMENT CLASSIC R&D PITFALL MODERN LEAN IDEATION PITFALL SOLUTION VALIDATION RISK MITIGATION STRONG VALIDATION EVIDENCE LITTLE VALIDATION EVIDENCE TEST Reduce risk Inside – out initiatives Outside –in initiatives
  26. 26. 3.1 Is the start-up way of working really different than the corporate one? 27 CONFIDENTIAL CONTINUOUS INNOVATION WITH SHORTER CYCLE TIMES GLOBALLY ~ innovation management~ innovation practice ~ innovation strategy
  27. 27. 3.1 Is the start-up way of working really different than the corporate one? 28 CONFIDENTIAL INNOVATION ACCOUNTING: ACTIVITY + IMPACT METRICS KPIs CREATING IDEAS TESTING IDEAS SCALING IDEAS INNOVATION PRACTICE # of ideas generated # of ideas chosen Assumptions identified # of experiments run # of customer conversations, interviews or observations # of prototypes/MVPs built # of design sprints # of growth tactics tested # of experiments run # of customers engaged # of channels tested # of usability tests run Validation velocity INNOVATION MANAGEMENT # of ideas submitted # of decisions made Products moved to next stage Average amount invested # of products in pipeline # of applications submitted # of decisions made # of products moving stages Average amount spent per stage # of products in pipeline # of reviews submitted # of decisions made # of products moving stages Average amount spent per stage INNOVATION STRATEGY # of products by innovation type # of products by innovation type % of products aligned to thesis Number of patent filings Partnerships & collaborations New products by innovation type % of products aligned to thesis # of patent filings # of products built Partnerships & collaborations ACTIVITY METRICS
  28. 28. 3.1 Is the start-up way of working really different than the corporate one? 29 CONFIDENTIAL INNOVATION ACCOUNTING: ACTIVITY + IMPACT METRICS KPIs CREATING IDEAS TESTING IDEAS SCALING IDEAS INNOVATION PRACTICE Hypotheses developed Minimum fail criteria set Experiment results Decisions made (pivot or persevere) Cost-per-learning Time-cost-per-learning Learning velocity Validation velocity Cohort analysis Pirate metrics (acquisition, activation, retention, revenue, referral) Growth Engines (lifetime value, retention rates, viral coefficients) Revenues and profits INNOVATION MANAGEMENT Alignment with thesis Alignment with portfolio Stage-gate criteria % of products at problem-solution fit % of products at product-market fit % of products ready for scale Stage-gate criteria Average growth rates Growth hypotheses validated Return on investment Process improvement metrics INNOVATION STRATEGY Not applicable Process improvement metrics # of patent granted New business models ready to scale Cost savings Innovation conversion New market segment entered Innovation contribution Cost savings Innovation conversion Market share (new segments, shelf space, share of wallet, distribution footprint) Patents granted Customer satisfaction IMPACT METRICS
  29. 29. 3.1 Is the start-up way of working really different than the corporate one? 30 CONFIDENTIAL COLLECTIVE DISRUPTION Now, we have the first initial, yet immature set of tools for searching for professionally organizing startup ventures and organizing collaboration as an effective continual disruption for corporates.
  30. 30. 3.1 Is the start-up way of working really different than the corporate one? 31 CONFIDENTIAL Literature & source list 1. https://www.inc.com/steve-blank/changes-to-entrepreneurship-innovation.html 2. https://medium.com/@martinmignot/what-was-nike-like-as-a-startup-b97332ff345c 3. https://neilpatel.com/blog/what-1960s-can-teach-you-about-growth-hacking/ 4. Entrepreneurship and Talent Management from a Global Perspective: Global Returnees 5. https://interestingengineering.com/the-origin-story-of-silicon-valleyand-why-we-shouldnt-try-to-recreate-it 6. https://www.sfgate.com/bayarea/article/High-tech-culture-of-Silicon-Valley-originally-2500151.php 7. The Code: Silicon Valley and the Remaking of America. From Margeret O’Mara 8. https://hbr.org/2013/05/why-the-lean-start-up-changes-everything 9. https://steveblank.com/category/secret-history-of-silicon-valley/ 10. https://sifted.eu/articles/why-failure-should-not-be-celebrated-startup/ 11. https://medium.com/@vkhosla/the-silicon-valley-culture-bdc86db0b524 12. https://www.forbes.com/sites/neilpatel/2015/05/18/5-things-about-the-silicon-valley-culture-that-are-totally-wrong/ 13. https://knowledge.wharton.upenn.edu/article/silicon-valley-work-culture/ 14. https://medium.com/@americanaffairs/building-the-venture-capital-state-86a435ce8a9c 15. https://eandt.theiet.org/content/articles/2017/07/california-inspired-from-flower-power-to-silicon-valley/ 16. https://hackernoon.com/differences-between-a-startup-and-a-big-corporation-and-why-we-need-both-a25d0e9c837e 17. https://bundl.com/blog/startup-vs-corporate-startup-5-big-differences 18. Engaging with startups to enhance corporate innovation from T. Weiblen & H. Chesborough 19. https://techcrunch.com/2014/07/26/the-first-trillion-dollar-startup/ 20. https://inc42.com/entrepreneurship/pay-it-forward-culture-silicon-valley/ 21. https://www.theunileverfoundry.com/highlights/future-of-corporate-and-startup-innovation.html 22. https://www.datadriveninvestor.com/2018/05/28/the-1960s-hippie-movement-and-how-it-gave-rise-to-silicon-valley/ 23. https://chiefmartec.com/2013/06/martecs-law-technology-changes-exponentially-organizations-change-logarithmically/ 24. https://chiefmartec.com/2019/07/want-innovate-like-amazon-heres-formula/ 25. https://www.businessinsider.com/chart-of-the-day-the-startup-curve-2012-3?r=US&IR=T 26. The Corporate Startup Enterprise Lean Innovation
  31. 31. 3.1 Is the start-up way of working really different than the corporate one? 32 CONFIDENTIAL One group, five brands Our services are marketed through 5 brands each addressing specific missions in product development. INTEGRATED PRODUCT DEVELOPMENT ON-SITE PRODUCT DEVELOPMENT DIGITAL PRODUCT DEVELOPMENT OPTICAL PRODUCT DEVELOPMENT

How do you set up your venture and accelerate growth? Start-ups are in a fundamental different position than corporates. As a consequence they play a different ball game. What can the start-up culture learn from the ’60s?

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