The union between corporations & startups - A magic recipe for innovation

Darío González

Today I wanted to share with you my personal experience: why I continue to work with and for startups after several years, and why the union of startups and corporations is ideal for business innovation.

Since I can remember, I have been a nonconformist. And this nonconformity has led me to jump into the void in very comfortable work situations in search of new challenges. It has also led me to always be linked to startups, where I have been able to better develop my potential by planning and executing tasks within a marketing plan in a transversal way.

Why do I like working in a startup?

The first thing I would highlight about working in a startup is the fun you have. You enjoy working because you acquire a feeling of “ownership” - something difficult to achieve in a corporation, where structures are so large that it is difficult to see the impact of your actions on the results of the company. Everything you do in an early-stage startup has an immediate impact on its business and makes you celebrate each of the milestones achieved with great enthusiasm, no matter how insignificant they may seem for a person who works in a large company.

Working in a startup is an incredible accelerated master's degree. Things have to get done one way or another, the teams are small and there are not specialists in all areas. This causes you to have to learn on the fly and with great pressure due to close delivery timings, so you forcefully become a more complete professional, with more transversal knowledge.

In an early-stage startup, everything has to be done from scratch and you can have an important decision-making power from the moment you set foot in the office the first day. This makes it easier to feel fulfilled and that you can align your personal goals with the professionals.

You have the vision of the entire value chain of the company and direct contact with the market, since you are closer to the end customer, the suppliers and all the agents involved in the business. This fact helps you to better understand the needs of customers and suppliers and to be able to carry out actions that are truly relevant for them and, consequently, for the results of the company.

There is no legal department, which in other words means everything is done under the premise "better to ask for forgiveness than permission." Innovation requires freedom of thought, yes, but above all freedom of execution. What good are great ideas if you can't execute them and gauge if they really were that great?

Why don't I like working in a startup?

Everything in life has their pros and cons, and working in a startup is no exception, although I do think that its cons also can make you a better professional and can make innovation sprout. 

Above all, I would highlight the uncertainty. Unlike large corporations, you have to worry about the company’s EBITDA and cash flow, whether you work in marketing, human resources or development. Startups are not solid businesses, so the flow of money may not be enough to meet the payments, including your salary, and can eventually lead to the closure of the company. That uncertainty can create stress and a much greater sense of responsibility and involvement, for which you may work longer hours. But if you are able to handle it, you will become a better professional and the company will be able to do different things than what is being done in the market. Or what is the same, you will be able to innovate.

A negative consequence of that “everything needs to be done” that we mentioned earlier and of freedom of thought and execution is it can bring unclear work processes and systems. For example, you don’t always know if you are doing it well, if you are stepping on a partner, if there are more efficient ways to do it, etc. You have to be self-taught and organized to be able to handle it successfully.

Last but not least, salaries are often lower. The economic capacity of early-stage startups is much lower than that of corporations, so you won’t be paid the same salary. This fact is often compensated with stock options, phantom shares, etc. In other words, a startup can give you a small part of the cake, so if the company ends up being successful or is sold you can receive financial compensation.

The union between corporations and startups: The magic recipe for innovation

The benefits of uniting corporations and startups are evident if we analyze the pros and cons of startups. If we think about the pros and cons of a corporation and compare them with those analyzed above, we can see that a startup's strengths are comporation’s weaknesses, and the other way around. If the collaboration between both is well articulated, they can form the perfect pair. 

In a corporate company, that uncertainty at the business level does not usually exist. You may experience uncertainty in your own job because it does not adapt to your skills, because you are not having adequate performance, or because of other factors related more directly to you, but not because of a bad turn of the company in the short term.

The processes and work systems of a corporation are usually very well defined, so they can help startups to mimic this organized way of working, and achieve its objectives in a more efficient way.

Lastly, corporations’ budgets support trial and error without seriously affecting the company's annual results. Most of the early-stage startups die due to lack of cash flow before reaching 2 years of life, so I cannot think of a better instrument of innovation than a collaboration between startups and corporations. This can lead to startups working as they would, without barriers, but supported and helped by a large corporation. That is precisely what we do at Corporate Lab.

Corporate Lab

Corporate Lab is a venture studio for corporations. We validate new business models for large companies by creating new startups, independent from the company, with professionals with different profiles with previous experience in setting up startups or working in early-stage startups. We take care of all the planning and execution without producing barriers for corporations, but with all the benefits that a corporation brings.

If you are a large company and you want to play the innovation game, contact us and see if we understand each other 😉

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