How do you set up your venture and accelerate growth? Start-ups are in a fundamental different position than corporates. As a consequence they play a different ball game. What can the start-up culture learn from the ’60s?

1. 3.1 Is the start-up way of working really different than the corporate one? 1
CONFIDENTIAL Template Innovation Day 2019CONFIDENTIAL
IS THE START-UP WAY OF WORKING REALLY
DIFFERENT THAN THE CORPORATE ONE?
Frederik Wouters
Business Development Director
frederik.wouters@verhaert.com
TRACK 3
MyStartUp

2. 3.1 Is the start-up way of working really different than the corporate one? 2
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CORPORATE VS. START-UP

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STARTUP VS CORPORATE
It is the startup driven change that frees us from the
straitjacket of conventional wisdom and lets us try to
build a better world.
The experts that inhabit this world are experts in a
previous version of the world. They do not aim at
inventing a new future and as skeptics never do the
seemingly impossible.

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HOW START-UPS WORK?

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HOW START-UPS INNOVATE?
… sooner or later
you need to scale
(as a corporate).

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You have a customer base and asks yourself what
products or services can I sell to my customer base ?
HOW CORPORATES INNOVATE?

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CORPORATES VS START-UPS
Social & economic impact PeopleOrganization
Scale
Shareholders, taxes &
employment
Added value
Brand & quality
1 of many
Thinker
Security
Limited
Vc- & funding capital
Hierarchy
Sluggish
Focus on sustainability
Huge funds
Team
Agile
Pivoting
No leverage
Individual
Ownership
Doer
Uncertainty

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AN EXPONENTIAL PACE

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ANTICIPATING EXPONENTIAL CHANGE IS POINTLESS
How to keep up ? Learn/change faster than
competition to survive.
Receiving feedback on launched MVP’s &
improving them.
But at this speed corporates or in conflict to
launch products too fast.

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CORPORATES ADOPTING STARTUP MENTALITY
In 2013, GE launched FastWorks using The Lean Startup
Nov 2017: Did Lean Startup fail at GE?
Hundred years of management education focused
on building strategies and tools that formalized
execution and efficiency for existing businesses.
Eight years of startup management education.

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ARE SILICON SAFARIS CRACKING THE SICILICON VALLEY CODE ?

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ADOPTING STARTUP TECHNIQUES

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START-UP & CORPRORATE INNOVATION INITIATIVES
Direction of Innovation Flow
Outside-In Inside-Out
EquityInvolvement
No Corporate Venturing
Participation in the success and
gaining strategic insights into
non-core markets.
Corporate Incubation
Provide a viable path to market
for promising corporate non-core
innovations.
Yes
Foundry / Accelerator
(Outside-In)
Insource ext. innovation to
stimulate and generate corporate
innovation.
Hackathon / Startup Program
(Platform)
Get startups to build products
using corporate supplied
technology to expand the market
for the corporate

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START-UP & CORPRORATE INNOVATION INITIATIVES
Success Factors
Corporate Venturing
• Clarity about strategic mission
(financial or strategic).
• Positioning toward the startup
world (independent or parent-
bound)
Corporate Incubation
• Autonomy from corporate
influence and procedures.
• Authority to access corporate
resources.
Foundry / Accelerator
(Outside-In)
• Precautions w.r.t handle IP issues
of co-developed innovations.
Hackathon / Startup Program
(Platform)
• Clarity about revenue model.
• Capability to handle large numbers
of collaborating startups
simultaneously.

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START-UP & CORPRORATE INNOVATION INITIATIVES
Investment needs (multiple years)
Organizationalchange
Innovation labs
Co-creation with partners
Hackathons & Accelerators
Corporate Incubators
Corporate
venturing
Procedures for
• Startup selection
• Contracts
• How to evaluate the
performance of the chosen
collaboration
• Continuous Improvement
• …

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WHAT ALTERNATIVES ARE OUT THERE ….
• Bold experiments to learn to fail
• Two is better than zero
• Two pizza’s team
• Ownership & responsibility
• “microservices” Architecture
• Customer obsession rather than competitor focus
• Builders and pioneers

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WHAT CAN WE LEARN FROM WHAT AMAZON DID

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WHAT SILICON VALLEY BOOSTED
CULTURE
MONEY

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A MATTER OF CULTURE
• California bans non-compete
clauses. Otherwise society loses,
as the best talent remains stuck in
established firms, unable to job
hop to start ups
• Quitting safe jobs for a risky
startup
• Failure is just another step towards
success, rather than the end of
one's efforts. (Fail fast / Fail often /
Fail better / Fail forward)
• Resilience and the ability to bounce
.
• Stanford engineering
graduates start their own
businesses rather than head
east
• BHAG - do the seemingly
impossible: the official US
response to Sputnik - first on
the moon
• NASA & DARPA stimulated
anyone to develop a good
idea as well as a bad
one, throwing money at
anything.

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A MATTER OF CULTURE
• 80% of all electronic companies has
been founded by people ones working
at Fairchild
• Founding Fathers of Silicon Valley
• A culture of personal networks built
out of a decade of collaboration
• Minuteman II missiles ramp-up,
with 6 missiles built every week
in 1964.
• NASA bought 60% of all the IC”s.
Fairchild sold
NASA 100,000 integrated
circuits just for the Apollo
program in 1964
• Ramp up mass-production the
price dropped from $1,000 a
chip to $20 .
• Space Shuttle blasted off with
help of the 8086 becoming the
core of IBM’s PC product line
1980s
• Transistor, BSD, TCP/IP, Arpanet
& Netscape , ARPAbet,
• Larry Page and Sergey Brin later
dreamed up Google
• SUN, …

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A MATTER OF CULTURE
Hippie counterculture
• Personal freedom & liberation
• A better world
• Restrictions of parents or conservative
• Creating new ways of living / utopias
• The Homebrew Computer Club DIY hobbyists creating their own computers.
• Give to help others - getting advice and discussing the latest innovation
• Fabricating semiconductors reliably was a black art start sharing best practices
with co-workers and competitors.
• Pay-It-Forward culture - ‘I was helped when I started out and now it’s my turn to
help others’

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SILCON VALLEY – 2nd period
• Capital gains tax 35 percent to 28 for assets held more than one year
• Small Business Investment Company program
• Dramatically expansion of money available
• Venture capital has now become Founder-friendly
• Open source software & hardware (Facebook, Amazon, …).
• Computing power as a utility
• Launch & spread of ‘The Lean Startup’
The cost of getting the first product
out the door has dropped by a factor
of a 100 .
Venture Capital Investment / Area

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A MATTER OF CULTURE
• An entrepreneurial mindset on the University
• The Hippies heritage
• A culture of risk taking & failure attitude (entrepreneurship)
• A Major social challenge (BHAG) for a better world
• Massively cheap no-critical governmental
money to pioneer , explore & innovate
• Lead users that helped in decreasing price
levels
ACCESS TO MONEY

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HYBRIDIZATION OF CORPORATE & STARTUP INNOVATION
Start-ups and corporates to work side by side in the same office by 2025
Need for new structured methods and effective collaboration programs with startup’s
• Make pivots more successful
• Decrease amount of failing startup’s
• Lower the cost of organizing collaboration and making scale up of new business profitable
SELECTION CREATING IDEAS
Counterculture
Open source software
& hardware
Risk taking ability
Your BHAG
Funding or assistance to
First customer(s)
Best practices platform
Methodic guidance & metrics
Generic KPI’s

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THE PATH TOWARDS SUCCESSFUL PRODUCTS
Solution building and
validation should be
managed in a holistic way
SOLUTIONBUILDING
VALUECREATION
CONTEXTUAL
RESEARCH
IDEATE
CONCEPT
IMPLEMENT
CLASSIC
R&D PITFALL
MODERN LEAN
IDEATION PITFALL
SOLUTION VALIDATION
RISK MITIGATION
STRONG VALIDATION
EVIDENCE
LITTLE VALIDATION
EVIDENCE
TEST
Reduce risk
Inside – out
initiatives
Outside –in
initiatives

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CONTINUOUS INNOVATION WITH SHORTER CYCLE TIMES GLOBALLY
~ innovation management~ innovation practice ~ innovation strategy

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INNOVATION ACCOUNTING: ACTIVITY + IMPACT METRICS
KPIs CREATING IDEAS TESTING IDEAS SCALING IDEAS
INNOVATION
PRACTICE
# of ideas generated
# of ideas chosen
Assumptions identified
# of experiments run
# of customer conversations, interviews
or observations
# of prototypes/MVPs built
# of design sprints
# of growth tactics tested
# of experiments run
# of customers engaged
# of channels tested
# of usability tests run
Validation velocity
INNOVATION
MANAGEMENT
# of ideas submitted
# of decisions made
Products moved to next stage
Average amount invested
# of products in pipeline
# of applications submitted
# of decisions made
# of products moving stages
Average amount spent per stage
# of products in pipeline
# of reviews submitted
# of decisions made
# of products moving stages
Average amount spent per stage
INNOVATION
STRATEGY
# of products by innovation type # of products by innovation type
% of products aligned to thesis
Number of patent filings
Partnerships & collaborations
New products by innovation type
% of products aligned to thesis
# of patent filings
# of products built
Partnerships & collaborations
ACTIVITY METRICS

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INNOVATION ACCOUNTING: ACTIVITY + IMPACT METRICS
KPIs CREATING IDEAS TESTING IDEAS SCALING IDEAS
INNOVATION
PRACTICE
Hypotheses developed
Minimum fail criteria set
Experiment results
Decisions made (pivot or persevere)
Cost-per-learning
Time-cost-per-learning
Learning velocity
Validation velocity
Cohort analysis
Pirate metrics (acquisition, activation, retention,
revenue, referral)
Growth Engines (lifetime value, retention rates,
viral coefficients)
Revenues and profits
INNOVATION
MANAGEMENT
Alignment with thesis
Alignment with portfolio
Stage-gate criteria
% of products at problem-solution fit
% of products at product-market fit
% of products ready for scale
Stage-gate criteria
Average growth rates
Growth hypotheses validated
Return on investment
Process improvement metrics
INNOVATION
STRATEGY
Not applicable Process improvement metrics
# of patent granted
New business models ready to scale
Cost savings
Innovation conversion
New market segment entered
Innovation contribution
Cost savings
Innovation conversion
Market share (new segments, shelf space, share
of wallet, distribution footprint)
Patents granted
Customer satisfaction
IMPACT METRICS

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COLLECTIVE DISRUPTION
Now, we have the first initial, yet
immature set of tools for searching
for professionally organizing startup
ventures and organizing collaboration
as an effective continual disruption
for corporates.

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Literature & source list
1. https://www.inc.com/steve-blank/changes-to-entrepreneurship-innovation.html
2. https://medium.com/@martinmignot/what-was-nike-like-as-a-startup-b97332ff345c
3. https://neilpatel.com/blog/what-1960s-can-teach-you-about-growth-hacking/
4. Entrepreneurship and Talent Management from a Global Perspective: Global Returnees
5. https://interestingengineering.com/the-origin-story-of-silicon-valleyand-why-we-shouldnt-try-to-recreate-it
6. https://www.sfgate.com/bayarea/article/High-tech-culture-of-Silicon-Valley-originally-2500151.php
7. The Code: Silicon Valley and the Remaking of America. From Margeret O’Mara
8. https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
9. https://steveblank.com/category/secret-history-of-silicon-valley/
10. https://sifted.eu/articles/why-failure-should-not-be-celebrated-startup/
11. https://medium.com/@vkhosla/the-silicon-valley-culture-bdc86db0b524
12. https://www.forbes.com/sites/neilpatel/2015/05/18/5-things-about-the-silicon-valley-culture-that-are-totally-wrong/
13. https://knowledge.wharton.upenn.edu/article/silicon-valley-work-culture/
14. https://medium.com/@americanaffairs/building-the-venture-capital-state-86a435ce8a9c
15. https://eandt.theiet.org/content/articles/2017/07/california-inspired-from-flower-power-to-silicon-valley/
16. https://hackernoon.com/differences-between-a-startup-and-a-big-corporation-and-why-we-need-both-a25d0e9c837e
17. https://bundl.com/blog/startup-vs-corporate-startup-5-big-differences
18. Engaging with startups to enhance corporate innovation from T. Weiblen & H. Chesborough
19. https://techcrunch.com/2014/07/26/the-first-trillion-dollar-startup/
20. https://inc42.com/entrepreneurship/pay-it-forward-culture-silicon-valley/
21. https://www.theunileverfoundry.com/highlights/future-of-corporate-and-startup-innovation.html
22. https://www.datadriveninvestor.com/2018/05/28/the-1960s-hippie-movement-and-how-it-gave-rise-to-silicon-valley/
23. https://chiefmartec.com/2013/06/martecs-law-technology-changes-exponentially-organizations-change-logarithmically/
24. https://chiefmartec.com/2019/07/want-innovate-like-amazon-heres-formula/
25. https://www.businessinsider.com/chart-of-the-day-the-startup-curve-2012-3?r=US&IR=T
26. The Corporate Startup Enterprise Lean Innovation

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One group, five brands
Our services are marketed through 5 brands each addressing
specific missions in product development.
INTEGRATED PRODUCT DEVELOPMENT
ON-SITE PRODUCT
DEVELOPMENT
DIGITAL PRODUCT
DEVELOPMENT
OPTICAL PRODUCT
DEVELOPMENT