For innovation-hungry legacy firms, partnering with a startup can be appealing. Relatively small sums of time and money can quickly yield generous returns. With due diligence and decent design, these partnerships can go beyond good results and energize organizations that have become too comfortable or complacent with everyday routines. In return, the startups typically get valuable references or valued customers.
The Right Way for an Established Firm to Do an Innovation Pilot with a Startup
For innovation-hungry legacy firms, start-up partnerships can offer superior investment opportunities. Relatively small sums of time and money can quickly yield generous returns. With due diligence and decent design, these partnerships can go beyond good results and energize organizations that have become too comfortable or complacent with everyday routines. Successful innovation partnerships are win-win relationships: start-ups typically get valuable references or valued customers, while established firms acquire cost-effective clarity around a capability that matters. The start-up knows that its partner’s willingness to take a chance made its win possible; the legacy firm acknowledges that it could never have done the innovation on its own. The key common denominator to success isn’t careful planning and comprehensive analysis, but taking fast, cheap, and simple “minimum viable pilots” – small, targeted tests — seriously. One of the great — and welcome — ironies of digital transformation is that disproportionate impact can so quickly emerge from seemingly tiny steps.