Nothing frustrates me more than complacency. When I hear large companies in legacy industries happy with their pace of change and innovation, I’m tempted to short their stock. Market share doesn’t take long to erode, especially when technology costs have largely become a level playing field for companies across the board.
Knowing this, I’m making a case for large companies to engage with early stage companies on a regular basis. Why? Simple, to remain competitive in the market by gaining access to the most innovative, earliest stage technology available.
Are there risks associated with this approach? Sure. But in my opinion, it’s riskier to not take this approach.
Here are the top three reasons why startups are an incredible resource for large companies:
1. New ideas: The technology cost for startups to create innovative solutions has significantly decreased, meaning more advanced innovation is taking place with very small teams.
2. Efficiency: Many times, the fastest and most efficient way to market is to buy – rather than build – and get market validation.
3. Cost: Compared to the “go-to” vendors like Accenture, startups are a bargain.
Unfortunately, big companies may have to deal with internal objections when wanting to work with startups. Next week we will address how to overcome those internal objections.