Tuesday, Aug 30, 2022

The Great Startup Nation: Leading Your Company Away From The Startup Graveyard

Jacqueline BakerFounder & Principal Consultant, Scarlet

HLTH

Recently, there’s been an increase in digital chatter about quitting. Between the never-ending conversations about The Great Resignation to the most recent internet cooler topic of the week, “quiet quitting," your social timeline is probably not void of banter around perspectives on these two topics. To set some expectations here, there is no desired intent to sway your thinking on either of those subjects with this piece, but instead to direct your thinking towards what many people opt to do after they have exercised their right to quit via a resignation, a quiet exit or a very public one.  


According to First Site Guide, there are 71,153 startups in the United States alone and as you can imagine, a growing number or more of them are launched every year. While many of those go on to be fully sustained, impactful and scaled companies, many others are unfortunately redirected to the startup graveyard.  


  • 9 out of 10 startups don’t make it. 
  • 20% of startups fall apart after a year. 
  • 30% of startups close within two years. 
  • 50% of startups shut their doors within five years. 
  • 70% of startups dissolve within 10 years. 


Now to be fair, before there is a misconstrued perspective that the blame for a failed startup is solely something that the founder(s) has done, there are a number of factors that play into why a startup failed to succeed. Factors that range from social economics, to the environment, to public health crises and even natural disasters.  


Since there are so many potential ways that a new venture can get knocked off of its path and be forced into not so quiet quitting, it’s important that founders enter into their startup journey with their eyes wide open and with a willingness to understand how and when to partner with large organizations. 


According to the 2021 DACH survey by McKinsey Digital, 75% of surveyed startups consider partnerships with corporations very important, but only 27% of startups are satisfied with their relations.  


Large organizations have increasingly recognized their need to embrace innovation and to stay competitive and fresh in their thinking, both internally and externally. Their internal efforts may come from innovation training and event intrapreneurship initiatives. 


Some of the organizations across the United States alone that have innovation labs that support both internal and external innovation practices include: 

  • Kohl's Innovation Center 
  • Google X 
  • Amazon Lab126 
  • Verizon 5G Labs 
  • Volkswagen Automotive Innovation Lab 
  • Staples Velocity Lab 
  • Coca-Cola's KOLab 
  • AARP Innovation Labs 
  • Lowe's Innovation Lab 
  • Capital One Labs 


Often though, their external innovation efforts come from the organization's commitment to embracing startup collaboration.  


So, how do startups increase their likelihood of success by readying themselves to collaborate with a growing number of organizations that are hungry for external disruptive innovative solutions and collaboration? 


It is in a startup’s best interest to understand that while innovation and ground breaking solutions are what a larger organization finds attractive, they are often operating within multi decade old structures that can’t be instantly abandoned. Founders should keep in mind several factors that will position them for successful corporate partnership and collaborations.  


Policy  


While the most successful businesses start with the intent and commitment to solving a problem for their consumers, they are often willingly or forcefully expected to adhere, conform or be in compliance with some level of policy. From automakers, to mobility devices to home monitoring widgets to even the latest cookware, organizations are expected to acknowledge and comply with policies that intersect with the work that they are doing.  


Why should this matter to a startup?  


Regardless of how cutting-edge, innovative or ground breaking a startup's solution may be, if a large organization has taken a particular stance or position on a policy that counters what the startup is focused on, there will likely be some level of hesitation, resistance or complete rejection of the notion of working together.  


So, how does a startup prepare themselves for this “policy parade”? A startup must first acknowledge and be aware that the majority of midsize to large organizations have policy commitments and considerations that they are often navigating.  


A larger organization will often appreciate that the startup is aware of the policy ramifications and also might welcome creative thinking around how a collaboration still might be possible even in the face of the hurdle. Bottom line — has a startup conducted their due diligence on the potential policy roadblocks that may be a factor for the corporation and given some thought to how it might be navigated?  


The Double Win  


It’s easy and understandable for a founder and a startup team to be tunnel visioned on their own organizational success. The infancy stages of any small business require a significant amount of focus. But, if a startup begins down the path of prioritizing working with large organizations, more than a selfish focus on their own success has to be considered. While it may be novel and altruistically magical to support a founder and startup, the primary question to consider is: what does the corporation get out of a collaboration with a startup? 


Founder & Startup Brands 

 

The amount of information that we have at our fingertips is sometimes overwhelming. For example, there are 5.6 billion Google searches per day. 


And, just like an individual might be concerned with how they are represented online — companies are as well. It’s common for an organization to check on the business and financial worthiness of another organization, but they are also often concerned with the reputational worthiness as well.  


Startups must be abreast of how their organization, founder(s), key leadership team members and board members are represented publicly. While a past failure, mistake or public ousting doesn’t mean that no organizations would welcome a collaboration anywhere, it does mean that the leadership team needs to be prepared to address public negative or questionable information, especially if this information may reflect negatively on a collaborating organization.  


Now, more than ever in a rapidly growing competitive market, large organizations are looking for ways to be even more valuable to their consumers. Collaborating with startups is a valuable way for larger organizations to tap into a startup's disruptive, innovative and expansive thinking that is necessary to elevate their mission, goals and impact. Startups have the opportunity to be ready for these collaboration opportunities by being aware of policy implications, focusing on the double win and being mindful of their brand reputation.  




About Jacqueline M. Baker  

Jacqueline M. Baker is a speaker, author, leadership consultant and advisor known for her unique approach to modern etiquette and leadership. As the author of The Unexpected Leader: Discovering the Leader Within You and Leader by Mistake: Becoming A Leader One Mistake At A Time, she frequently speaks and writes on the leadership-for-all concept. 


Her inspiration and expertise comes from more than a decade as the founder and principal consultant for Scarlet, a consultancy that provides leadership training to Fortune 500 companies, small businesses, community organizations and individuals across the globe. She also leverages her experience serving in a number of corporate board and community service roles. In her most recent corporate role, she served as the Vice President of Startup Programming at AARP Innovation Labs, where she was responsible for sourcing global health tech and fintech startups.  


An avid dinner-party hostess, Jacqueline creates space and opportunities to gather groups for compelling conversation, delicious cuisine and untraditional ways for continued leadership development. She is also the host of the podcast, Just Start™: From Ideas To Action.


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