Large companies find innovation difficult because they are set up to execute, not to innovate.
My post yesterday picked a little bit on large companies that became dinosaurs. It happens, but not always. Some reinvent themselves.
Nic Brisbourne of Forward Ventures has a great blog called The Equity Kicker. Back in March 2015 Brisbourne wrote a very short piece called Startups are built to learn, large companies are built to execute. It’s a “to the point” explanation of why large companies struggle with innovation. He’s summarizing a piece by Steve Blank of Lean Startup fame on the topic that was in Venture Beat.
Why did Brisbourne’s post come to mind 18 months after he wrote it when I was thinking about business and political leadership yesterday? Because so many startup failures happen when management and investors don’t spot that brief moment in time when a startup needs to become a company. Not a large, bureaucratic company mind you, but an entity focused on execution. This happens over some period of time of course. You can’t flip a switch. You hire a new Senior V.P. of Sales. You split R&D off from product management and hire a Head of Product. The CFO hires a controller. Yes, eventually you may even see the Board bring in “a CEO with big company experience.” Timing is everything. Getting this timing wrong leads to fatalities that have nothing to do with market conditions or bad technologies. It’s one of the arts of venture capital.
One last thing, Nic Brisbourne has my favorite Twitter header ever.