What Startups Can Learn from Large Corporations

Guest post by James Burbank, editor in chief at BizzMarkBlog

In many people's minds there is this dichotomous image of startups and large corporations pitted against each other. For the majority, the story usually describes brave little companies trying to eke out an existence surrounded by the established big bad players in their industry.

It goes without saying that the reality is very different, with many large corporations actually supporting startups and innovation (like for instance, Microsoft's BizSpark program, while we are on the subject) and with new players benefiting greatly from such support while also returning the favor through innovations that are later potentially adopted by the mythic Big Players.

Even though many people are aware of this, there are still those who believe the whole narrative is black-and-white and that startups have it figured out, while large corporations are these dinosaurs sloshing in some primordial corporate muck, destroying everything they touch.

While people have the right to such a one-sided view of things, it can actually prevent startups from learning some very useful lessons when they are run by people who share this single-minded opinion.

But, what exactly are these lessons?

Organization is Everything (or at least a lot)
There is something uplifting or even comforting in the idea that all you need is that one fantastic idea. It makes us all feel like we are just one sleepless night away from fame and riches and that feels great. In reality, however, things do not work this way, as so many startups have discovered over the years. For every Atlassian, for every Bigcommerce, for every Canva, there are innumerable startups that have failed because they thought ideas are everything and organization is nothing.

We are not saying that ideas do not mean anything. If they hadn't, you would have probably contemplated opening yet another small business. Startups are based on ideas, but organization is still an incredibly important aspect of running a company, startup or not.
Large corporations know how to do organization. They have to. Poor organization within a large company can lead to a catastrophe, and it will. Large companies are aware of this and a huge part of their operation is making sure things are functioning.

It may be difficult for startup founders to find the time or the expertise to be as organized as multi-billion companies, but it is important not to ignore the importance of organization. They need to know who is working on what, what the deadlines are and how much money is going in and out.

Compromise is a Necessity
The world of business is the world of compromise. Without compromise, it would be impossible to make any deal that would benefit anyone. Large companies are built on compromise that have allowed them to become large in the first place. Most of them had to make painful cuts or compromise certain short-term goals in order to keep the big picture intact.

In many cases, startup founders adopt this stance where they see any compromise as a betrayal of their own ideas. This singlemindedness can be extremely harmful, especially since compromises can actually turn a startup into a solid company that will grow in the coming years and decades.

An example of this could be a business intelligence company called Panorama which was founded back in the day when the term startup didn't even exist. They developed their own OLAP technology and in less than three years, they were approached by none other than Microsoft who ended up purchasing their technology and making it an inseparable part of Microsoft SQL Server. Nowadays, that same company is still in operation, integrating their BI solutions with Microsoft's, and thriving.

Back in the mid-1990s, someone could have simply said that selling their tech to Microsoft was too much of a compromise and they could have closed their doors before the new millennium rolled in.

Being Careful Is Not Cowardly
Startups are supposed to be fearless and brash, tearing down walls and kicking down the doors. The only problem is that this kind of behavior often results in the ceiling crashing down on the one doing the whole brash pulling and kicking down.

You are probably familiar with the story of Theranos, a biomedical startup that promised to revolutionize the way in which blood tests are done. Their new analysis was supposed to be able to provide all the necessary readings from a single drop of blood, as opposed to an entire vial. The initial results were promising and they soon attracted unprecedented funding. They kept the ball rolling by constantly appearing in the media and vying to change the world.

Then, all of a sudden, it turned out that their promises were not exactly as realistic as possible. Studies started showing that the results of their analyses were lacking and that people's lives were put in danger. They were careless with their clinical studies and they handled the fallout carelessly.

They are currently being investigated by pretty much every possible American authority, both financial and medical ones.
Large companies are usually much more careful than this, making sure their bases are covered and there is no possibility of catastrophic oversights being made. Startups should be aware of this. If Theranos was more aware of this, maybe their story would have been a different one.

Closing Word
While there is a lot that big companies can learn from startups, this is a process that goes both ways. Every large company started off somewhere and learning a lesson or two from them might make a difference between a success and a failure.

Comments (0)

Skip to main content