Internal startups - why and how to do it. Companies need growth and quick innovation to markets. This is how to do it. You can start lean startups inside your corporation

1. Internal start-ups.
Can startups work inside established companies
Nääsvillen oliopäivät
2.12.2015
Jukka Märijärvi/ Landon Oy
Jukka.marijarvi@landon.fi
@JMarijarvi

2. World was stable and predictable -
Ford model T
• In producKon 1908 to 1927
• Very liPle changes
• Sold 16.5Million examples
• SKll makes the top ten list of most sold cars of
all Kmes (ranked eight)
• “Any customer can have a car painted any color that he wants
so long as it is black”

4. Life will be shorter …
• “Die Another Day: What Leaders Can Do
About the Shrinking Life Expectancy of Corpora@ons,”
the Boston ConsulKng Group’s MarKn Reeves
and Lisanne Pueschel
• John Chambers: “40 percent of companies will not
exist in a meaningful way in 10 years.” -- that we
are in an era of unprecedented technological
disrupKon and change that only the most
forward-looking companies will survive.

5. Big and rigid companies
difficult to innovate and change
• ”some companies create command-and-control
hierarchies, rigid silos, and inflexible processes to
ensure consistency and predictability”.
• While ins@tu@onal architectures are effec@ve
during @mes of stability, companies that embrace
them will face extreme difficul@es during @mes of
disrup@on and rapid change”.
Hagel&Brown: InsKtuKonal innovaKon
hPp://d27n205l7rookf.cloudfront.net/wp-content/uploads/2013/03/
DUP293_insKtuKonal_innovaKon2.pdf

6. The Speed of change …
• Yet startups everywhere –
– all from day one global
– Plethora of ideas
– Want to change and disrupt everything: Uber, AirBnB,
• But meanwhile back in Finland - Cut, Cut and Cut, but
then what? Any ideas?
– Finnish industry is saving, not invesKng, reducing personnel
– You become profitable and can pay dividends to investors
– But what do you do then?
– Threat to disappear
• What is your Strategy against?
– Wait and see?
– Do something – start innovaKng – start growing, start
renewing yourself

7. What is the problem?
Fortune magazine study on failed startups
Lean Startup
Concept has
become defacto
standard
In Silicon Valley
and helps in this.
Or at least people
feel that it does!

8. Lean startup concept
• Have a vision,
• write assumpKons
• Test the assumpKons with fast pilots – create a MVP
(Minimum Viable Product)
• Collect measurements (real measures, not vanity
metrics)
• Pivot (redirect or change one/many asumpKons) or
persevere (conKnue forward)
• Magic formula found (problem/product fit)
• Find formula for growth (product/market fit)
• Grow fast and take the markets (Internet Kme the first
takes 80-90% of the market)

9. What does it take to change?
• There needs to be two operaKve modes running at the
same Kme – and different profile people!
– Normal business
• OpKmize the speed and quality, Conformance to rules
– InnovaKons and new ideas -> internal startups
• Break all rules, contact the customers, Bypass everyone, test
everything unproven. Disrupt (=kill) the old business
• Less corporate rules and red tape –
– HR “answer to this competence survey by Monday”
– F&C “report the use of money with this handy Excel file”
– IT “ we only use Sony laptops with programs A,B and C”
– Legal “ fill this quick IPR applicaKon template”

10. Any success cases?
• F-Secure – Tieto – OP-Pankki PIVO
• Intuit, Adobe
• General Electric

11. Where does it lead?
• Change is the word
• DigitalizaKon will come to every domain and create new
ones
– Banking is next. Accenture counts that 32% of the banks current
business will disappear
– Check Blockchain, number26, Ripple, iZePle etc
• Big corporaKons need to change or they will fall
– Safeguarding the old ways and resisKng change, building
imperium will just be so last season
– Innovate+execute are the words
• Networks of high skilled small companies can be the
future?

12. Our (free) Book is nearly ready:
hPps://leanpub.com/internalstartups
And a course: hPp://www.wakaru.fi/koulutuskalenteri.php?kat=liiketoiminta
Thank You!