As reported on TechCrunch.
by DARRELL ETHERINGTON
At Startup Festival in Montreal this week, one of the noteworthy pieces of data so far is how many non-startup folks are attending workshops ostensibly designed for startups. Ben Yoskovitz and Alistair Croll went out of their way to direct part of their talk regarding their book Lean Analytics to attendees who might want to take steps to innovate, but are doing so within an established business as “intrapreneurs” instead of from the vantage point of a startup.
Intrapreneurs face the same phases of growth as startup entrepreneurs deal with, per Yoskowitz and Croll, but the nature of each stage and the way they need to be tackled will differ. Applying lean principles within a business requires modification and adaptation; it’s not about just starting up a company within another company, the way it’s sometimes portrayed for big companies like Apple that are said to have maintained a startup mentality among their employees.
An intrapreneur has different goals rather than just upsetting the status quo or creating a new product category; that might be what they’re after, but as Croll noted during the talk, they might also be tasked with sustaining existing business; defending their own business against outside innovators; revitalizing a “dog” (low growth, low market share product) or turning a “cash cow” (low growth, high market share) into something with more chance to bring in new customers. Innovation means different things for big companies than it does for small ones, but requires innovation nonetheless.
The stages both intrapreneurs or entrepreneurs have to face are the same in general; they need an empathy stage when they sound out their audience needs; a stickiness phase to find and build an MVP; a virality stage where they find out how their product can grow; a revenue stage to prove its fiscal validity; and a scale phase where it starts to grow rapidly
For the intrapreneur, however, Yoskovitz says that there’s going to be a peremptory phase where they have to get buy-in from key people in the company to even begin. Then the empathy stage involves finding problems already existing, not testing demand for something. You skip building a business case, and instead you build an analytics picture, find out where the industry is going.
Stickiness is about building to a real minimum, which could be restricted by actual regulatory minimums. So for a huge company like MasterCard, the regulatory minimums might be far greater than for a Square because of the size of their existing investment. That’s going to affect how much leeway is available in terms of really building an MVP that can be launched. Virality is about convincing parties that things need to have sharing elements and built-in downloadable products built-in, which can be a challenge in terms of convincing those within the organization to change.
On the revenue side, there’s lots more to consider, too. You can’t ignore an existing sales chain or channel, which is why someone like Microsoft can’t just abandon boxed software sales and has to sell a download code on a store shelf. It’s not an insurmountable problem, but it’s not something that can easily be ignored, unlike at a startup. Finally with scale, at this stage you don’t just start growing the business you’ve built as an intrapreneur; you generally hand off the baton (what you’ve built) to someone else and lose all ability to steer it. That’s sort of akin to an exit, but really without the big payday to soothe the pain.
Increasingly, established businesses want to take advantage of startup impulses and startup mojo to avoid or own their own disruption, and that shows in the attendance at this year’s festival. But in reality, the lessons don’t translate directly; Yoskovitz and Croll articulated that there’s still plenty of value in pursuing lean startup methodology for big companies, but it’s crucial to do so with eyes wide open in order not to get frustrated.