20 Lessons Big Tech Companies Should Learn From Startups (And Why)
November 9, 2023
There’s no doubt there’s a certain excitement and synergy present in a small but dedicated tech startup team. It’s an atmosphere that combines the belief that they have a market-changing product or service to offer with the fresh energy to do the hard work to bring a dream to fruition.
However, when that dream is realized and a company grows to a larger size, it can be all too easy to slip into complacency and start to lean into routine instead of innovation. Leafing back to an earlier page and drawing lessons from the fast-paced atmosphere of startup life can be a boon to established companies that may have lost their way. Below, 20 members of Forbes Technology Council share lessons tech companies of any size would be wise to learn from startups and why they can lead to years of ongoing, satisfying success.
1. Place More Trust In Each Team Member
People in startups are trusted to take on much larger tasks and tend to do them faster. The value-add of each person is higher, and many problems are solved with talent and creativity, not with a massive team. This is true both for managers and engineers. On the other hand, as with success, every wrong move is emphasized. - Noam Mizrahi, Marvell
2. Embrace Unconventional Ideas
Startups excel at daring to think differently and achieving the seemingly impossible. Large tech corporations can learn the value of embracing unconventional ideas and pushing the boundaries of innovation. This mindset fosters adaptability and drives them to stay ahead in the dynamic tech landscape (#InnovationMatters). - Reuven Aronashvili, CYE
3. Hold On To Early Hires
Holding on to early talent is key. Generally, big companies move more slowly than startups, and over time they tend to hire folks who move at “large company speed.” The folks you hire early help keep everyone iterating and help protect against disruptions. Big companies need to keep these people motivated so that they are still there when a disruption comes along and you need to move quickly. - Martin Mao, Chronosphere
4. Stay Flexible
When leading a startup, it is crucial to cultivate a workplace that encourages taking chances, trying new things and learning from failures. Staying flexible and open makes it possible to change course and capitalize on new opportunities as they arise. Making safe choices and solely focusing on following a predetermined, narrow path forward will limit the ability to take risks with big rewards. - Cecilia Retelle Zywicki, PATHWAYos
5. Speed Up The GTM Process
It’s important to understand and accept the speed of change. Startups understand the importance of quickly getting a minimum viable product into the market to test assumptions, gather real-world feedback and change the product accordingly. Enterprises can become bogged down by bureaucracy and a lengthy decision-making process, which can slow down their ability to innovate and bring new products or features to market. - Oleg Nesterov, MindK
6. Fight Confirmation Bias
Fight confirmation bias every day and lean into self-disruption. It’s key to stay relevant and close to the most advanced possibilities to solve clients’ challenges. If you rely too much on existing products based on past innovation, the time not spent on self-disruption will lead to self-destruction. It’s rare that competition causes a business to fail; most often, it’s internal complacency. - Koray Köse, Everstream Analytics
7. Stay Close To Your Customers
A huge competitive advantage of startups is how close they are to their customers. Getting frequent feedback on its product allows a startup to adapt quickly to its customers’ evolving perspectives and continue to solve their pain points. For big enterprises, staying close to customers allows them to retain trust, keep their products relevant and align their roadmap to their customers’ needs. - Lizzie Matusov, Quotient
8. Develop And Maintain A Grassroots Community
Creative and agile customer validation through grassroots community engagement and campaigns is what large tech corporations could learn from their startup counterparts. Being experiential will be a differentiator with the changing demographic of the customer base in the next five to 10 years. - Lili Gangas, Kapor Center
9. Leave Critical Decisions To Smaller, Focused Teams
Large corporations often involve numerous stakeholders who can bog down the decision-making process. It would be more effective to empower small, highly focused teams, akin to startups, to take charge of critical decisions. By doing so, companies will be better positioned to make more informed decisions that prioritize the greater good of the company while eliminating self-interest and politics. - Christopher Stauffer, STAUFFER
10. Don’t Be Afraid Of Mistakes
Startups aren’t afraid to make mistakes in the name of speed and innovation. Corporations should break down bureaucracy and create “culture champions” to change faster and continue leading in today’s business environment. I’ve found this especially helpful in the utility world as it seeks to ensure reliability while scaling innovation to drive toward net-zero. - Steve Smith, National Grid Partners
11. Build Freedom Into Your Product
Don’t ask them to marry you on the first date—avoid the cheap trick of locking your customer into your platform. This strategy alienates potential customers and starts the relationship off on shaky ground. Instead, build freedom into your product, and then build it so well that they won’t want to leave. - Roland Hörmann, SIB Visions GmbH
12. Foster A Culture Of Innovation
The journey of a startup company is an exciting one filled with innovation and creativity. If there is one thing that a large tech corporation can learn or use as a valuable lesson from the startup journey, it would be showing agility and flexibility in decision making. Startups often excel at quickly adapting to changes, experimenting with new ideas and fostering a culture of innovation. - Margarita Rivera, Lowe’s Companies, Inc.
13. Give Teams The Space To Be Nimble
Large companies need to free their internal teams from the processes and heavyweight infrastructure that inhibit the kind of nimbleness seen at a small, innovative startup. What works is to cordon off a team in a sort of “skunkworks” where the members are free to move fast, make mistakes, try again and keep innovating. But they have to have independence and no interference—a state that is often anathema to a big firm. - Jothy Rosenberg, Dover Microsystems
14. Don’t Lose Sight Of Your Primary Goal
Culture, flexibility and focus are key. A large tech corporation should preserve the drive and flexibility to be bold and experiment with approaches without losing sight of its primary goal. “What problem are we solving?” Use this question as a guiding point, because focus is significant. All initiatives should be based on a strong culture—not on a nominal “corporate culture,” but on a real culture that’s based on values and action. - Yuriy Gnatyuk, Kindgeek
15. Foster Intrapreneurship
The one thing large tech corporations could learn from startups is the importance of listening very carefully to their customers and the market and fostering their own intrapreneurs to gain a business edge. Many times, great businesses are started by someone who has served at a big tech corporation and turned an idea into a startup—a startup that is later acquired by that same big tech corporation. - Alon Bender, BenderXpert
16. Combine Rapid Prototyping With Failing Fast
Combining rapid prototyping with the concept of failing fast is one of the best things a well-funded, large tech corporation can learn from a startup. You have the financial latitude to try a few things to see what will resonate best with the market; there’s no need to keep doing the same thing over and over again. - Bharath Vasudevan, Quest Software Inc.
17. Don’t Underspend On Market Adoption
A startup is about changing markets, whether it’s through a better product to win a market, a new product to expand an existing market, or a new category to create a market. Many startups fail because they spend too much capital on product innovation and not enough on market adoption. Large enterprises tend to do the same; they often allocate a lot of capex for innovation but don’t budget enough opex for adoption. - Richie Etwaru, Mobeus
18. Prioritize Ruthlessly
A common practice you’ll find at every successful startup is ruthless prioritization. As a startup, you will never have enough resources to do all the things you want to do. Using your resources to maximize efforts to reach a clear target is something that big corporations should learn from successful startups. - Prakash Raina, Subskribe Inc.
19. Earn Your Survival Every Day
Startups are faced with a constant and real existential threat, so they treat their ongoing survival as something that must be earned every day. This pressure instills a sense of real urgency, forces agility and compels the team to rally toward innovation in the pursuit of differentiation in the market. - Kent Keirsey, Invoke
20. Think Big, But Act Small
Successful businesses of all sizes have audacious goals, but their leaders know that methodical execution carried out in small steps enables progress. Execution is the difference between success and failure. - Roy Andrew Ng, Bond