Many of you have read about my whirlwind week that culminated with a last-minute trip to the Nike Accelerator in Portland. It was
an amazing week my best week on record and I learned a lot about putting myself in the “way of opportunity” as a friend of mine put it.
Aside from personal growth, I witnessed an amazing partnership between a huge multi-national corporation and a handful of small startups. These two groups are typically juxtaposed but what I saw in Portland was a symbiotic relationship where everyone involved was walking away with more than what they brought into the relationship.
First some context…The world has changed
Seth Godin’s latest book, “The Icarus Deception,” chronicles the end of the industrial age due to the birth of the connected economy. Rather than fumble through explaining this shift to you, I’ll let the master give you a 3 minute schooling:
High Growth Startups were born in the Connected Economy
The benefits of the Connected Economy are well-known among entrepreneurs and founders of high growth startups. They grew up in the connected age and have defined it for themselves by creating a lot of the platforms and tools they use to be successful. There are 4 principles that I believe set a successful high growth startup apart from a typical organization in the Connected Economy:
They focus on a real customer problem/pain point: with limited resources, they define a problem, prototype a solution, understand market size/competition, focus on differentiation and determine a business model…in that order. As a side benefit, the founders are typically emotionally connected to their companies making it easier to define and adhere to a clear mission in the marketplace.
They connect with a ridiculously large network of people who can help them: Well documented in Brad Feld’s book “Startup Communities,” entrepreneurs build out a community that looks out for one another, favoring a “give before you get” mentality. Jumping into something blind sucks, knowing that there are a number of people around who have been there before increases the likelihood of success.
They move quickly: They don’t tackle the entire solution right away, they instead target a Minimally Viable Product that will get them on base and use an iterative process to continually improve while growing their business. Practices like the Lean Startup Movement, Agile Development and even Agile Marketing have been designed with speed to market at the center.
They have no fear of failure: Failure is always an option…as long as you’re learning something and improving the next time around. This ability to silence the “lizard brain,” and find a way to get something done is a true competitive advantage.
So are corporations just worthless and screwed?
Absolutely NOT! While corporations may have been born during the industrial age, almost all of them have amassed valuable assets that any young company would love to get their hands on…they just need to be shown the value in sharing:
Meaty Business Problems: Every organization out there has business problems in need of solutions. Generally the lack of fresh thought the limitations of bandwidth or a lack of entrepreneurial skill-set make these problems fester. By open-sourcing these challenges, corporations and startups could both benefit.
Access to Intellectual Property: The rate at which corporations file patents is amazing. There’s so much IP floating around that a lot of it actually goes unused. While the theory of “technology transfer” is something that’s been around the academic world for quite some time, exploring performance based IP licensing models where someone else could actually help enable that IP would benefit everyone.
Talented “Domain Experts”: I sit next to thousands of tenured professionals who have deep experience and extremely valuable skills. Your startup most likely can’t afford a brand expert who has been working on large sports sponsorships or a pricing manager who crunches business models for a living. Loaning this talent to a startup as a mentor not only helps a startup in need, but maybe some of that cultural magic will rub off on your corporate employee…
Seed Capital: This is typically cited as a key challenge for any startup community. A large corporation should be playing the role of a hub in your entrepreneurial community. This includes investing relatively small amounts of money that return a good portfolio of entrepreneurs working close to core business problems. At the end of the day, you want to ensure innovation happens around you, not to you.
Large Customer Bases: Ah yes…the holy grail. Once that startup has a product in market they sure would love to have access to all of your paying customers. As a corporation, if you’ve managed to surround yourself with a portfolio of relevant startups, chances are…you probably want your customers to know about them. Everyone wins.
Creating an Environment where everyone can win…right in your home town
Large and small companies working together is not a new concept by any means…in fact, there are a number of companies doing something similar to Nike. Technology companies immediately set their sights on Silicon Valley, I would opt to start as close to home as possible. Startup communities are popping up in every city and they’re probably waiting for a large corporation to show a little interest. When building a community close to your company, make sure things are close enough for you to keep tabs on what’s going on but far enough away from HQ to keep the heavy hands of the executives at bay.
What Nike and TechStars have set up in Portland seems to be working and I’m excited to watch it grow. They have laid the ground work for a healthy innovation pipeline that they can manage over a long period of time. As I provided advice to each of the teams I met with, I received a number of thank you’s and genuine appreciation….but they ended up changing me for the better (whether they know it or not).