How a big company can run fast, like a startup — Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Xconomy

What does the word “startup” mean to you?

Many words can come to mind: new, exciting, experimental, small, lean, agile, fast. To me, “startup” mostly makes me think of “agile” and “fast.”

In an early stage startup, everybody is focused on the same thing. People are passionate, enthusiastic, hungry for an opportunity to change the world, and they will do whatever it takes to get things done. At a headcount of 5-10 people, coordination comes naturally. There are no legacy processes to slow things down. Without existing customers, the team is free to modify their products and services as they learn more. There is also a shared sense of urgency. So they run fast: because it’s fun, because they can, and because they have to.

Contrast that with an established company with a healthy, mature business. Let’s say the company has a global headcount of 100,000. Suppose one of the business units has 6,000 people. The R&D team may have 450 people. The revenue for this business unit is growing at 5-10 percent year over year.

Now suppose two product leaders in this R&D team come up with an idea for a radically different product offering that can turn things upside down. If things work out, this could quadruple their total addressable market. But these leaders still have responsibilities to the existing business, as do all the potential team members. Under these conditions, how would they get started?

Read the full post at Xconomy.

Elaine Chen is a Senior Lecturer at the Martin Trust Center for MIT Entrepreneurship and the MIT Sloan School of Management.

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