Skip to content
Home>All Insights>How organisations can give themselves an edge over startups

How organisations can give themselves an edge over startups

A startup’s very existence depends on successful innovation. Get the product or service right, and they stand to disrupt entire markets, sending established players scrambling to catch up. There are plenty of examples of where this has happened, with the startups growing at astronomical rates, then being acquired or going public at huge valuations. Medium and larger enterprises can clearly learn about innovation from startups like these.

At the same time, for every uber, Airbnb or Starling Bank, there are many more aspiring disruptors that ultimately fail. This can lead to complacency among established players when it comes to innovation, if they believe anyone who tries to disrupt their industry will fail.

It’s important not to fall into this trap – and indeed, medium-sized and larger companies have a number of strengths that can make them more effective innovators than startups. The key is to cherry-pick the best of what startups do, and blend it with the unique strengths of bigger organisations. It creates a winning mix that most startups can’t compete with.

We’ve picked out three examples of each, to help you improve the way your company innovates.

Three innovation lessons medium and large businesses can learn from startups

1.Make innovation core to the business, to maintain focus

Startups are typically cash-constrained: they have limited ‘runway’ in which to turn their idea into a revenue-generator. If they don’t, money runs out, the business folds, mortgages can’t be paid and families can’t be fed. The success of the idea, therefore, becomes everyone’s key focus, which encourages truly distraction-free working.

At larger organisations, innovation is often seen as a bolt-on, rather than a core part of business-as-usual. This can be a double-edged sword. On the positive side, deadlines can be more flexible, thereby providing vital extra time for the final push to market, for example. But this flexibility can also lessen people’s focus, because the consequences of failure are less severe.

To address this, innovation needs to become central to the way every business operates, with management-level representation and clear lines of accountability for everyone involved. We’ve found this can really sharpen the focus from top to bottom, ultimately leading to better results.

2. Go faster

Linked to the first point is the notion of speed. For startups, the early-days threat of cash running out drives a desire to get something to market as fast as possible. They also have fewer distractions than those in larger organisations: no management team away days, no compulsory training for all employees, and the like.

Our approach to innovation speed is that if your pace feels comfortable, it probably isn’t quick enough. Push to move forward with a little more uncertainty than is perhaps comfortable, and be prepared to shorten your work cycles where appropriate. When you’re researching, for example, you may need longer cycles. But during validation, the more iterations you can get through, the more insights you can collect and the more refinements you can make, ultimately leading to a product or service better matched to your users’ needs.

And this brings us nicely to our third point…

3. Everyone should meet real users

Startups may not have the luxury of specialist user researchers to go out and interact with real users. As a result, pretty much everyone involved in the product or service finds themselves out-and-about discovering users’ needs and gathering feedback on prototypes.

At larger organisations, this work often gets handed to a small group of user researchers. Consequently, the development team, sponsors and management don’t get to see these powerful first-hand insights into how people perceive the idea or use the service.

We encourage everyone involved in creating new products and services to get out of the office and be part of the real-world interactions with users. It invariably leads to better outcomes.

Three inherent strengths medium and larger organisations can leverage to innovate more effectively than startups 

1. Build a stronger, more specialised team

Startups are nearly always run by very small teams, with everyone mucking in and learning certain aspects of startup life on the job. Ask anyone who’s been involved in a startup to reflect on the early days, and they’ll almost invariably talk about how a lack of knowledge and experience in areas such as finance, legal, sales, marketing and indeed the innovation process itself, led to poor decisions.

Larger organisations will have experts in all of these fields – or the financial resources to bring them in as required. This has a double benefit when it comes to driving innovation success. It typically leads to better decision-making in each area, and means the technologists are freer to focus on developing the product or service.

Making use of this knowledge, experience and resource can give bigger businesses a real edge over startups.

2. Re-use makes you faster

Linked to the previous point is the ability to re-use. Where startups generally have to do everything from scratch, established businesses don’t. You may already have built and validated solutions to part of the problem your innovation is addressing. You may have knowledge of the market among your colleagues, gained from past or present products and services. You may already have a relevant customer base, that can give you insights into people’s preferences and behaviours, or a ready-made group to research with. You’ll also have existing supplier and partner relationships you can leverage.

All these things can be real accelerators of innovation in bigger organisations.

3. Plan to scale

Once an idea has been shown to meet user needs and to be technically and commercially feasible, it’s time to scale it out. Most startups won’t have done this before, so they’re breaking new ground, with all the uncertainty and risk this entails.

For an established organisation, scaling out a product or service will be second-nature. Having done it many times before, you’ll have established processes to follow, go-to lists of pre-approved partners, and other key enablers of large-scale launches. As a result, you can put the foundations in place early, such that as soon as you’ve proven that customers love the idea, you can set the wheels in motion to scale it out for full launch. This again can dramatically accelerate time-to-market in a way many startups won’t be able to match.

A powerful springboard for innovation success

As an established business – whether you’re a medium-sized organisation or a bigger corporate – you’ve an amazing opportunity to become a leading innovator in your field. By leveraging your IP, skills, experience and financial resources, and combining them with lessons learned from the world’s most successful startups, you’ll create a powerful blend that helps you innovate both faster and more effectively – making you the disruptor, rather than the disrupted.

Digital Engineering

Get expert help with your digital challenges and unlock modern digital engineering solutions.