Big company executives live in the present and near future, while entrepreneurs live in the far future. Both do so because they don't have a choice.
Big Company People must figure out every way possible to exploit past innovations that they and (increasingly) others created to service their needs of today. Some Big Company People will think and talk thoughtfully about innovation, but make no mistake: almost all of the human and material machinery in big companies is exquisitely organized to squeeze every nickel possible out of the innovations of yesterday and not what they hope to have, might have or could have one day.
This truth can make life difficult for preternatural innovators in big companies, which is why these same people sometimes leave and become Startup People. Startup People must daily inhabit a world that doesn’t yet exist, at least outside of their mind. They must do what F. Scott Fitzgerald said is the test of a first-rate mind, which “...is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”
They spend their time figuring out every way possible how to impose the “reality” in their mind on the real world you and I live in. This is very, very hard to do. So much so that a whole lot of Startup People give up and become Big Company People.
Make no mistake, Big Company People and Startup People both work and make choices in the present, but the different perceptions of time make it very hard for them to work together – at least for any meaningful length of time. Big companies and startups successfully sell to each other for sure, but full-on, day-in and day-out collaboration is another story. That is why Big Company People and Startup People working together is at best a temporary state of affairs.
Yet it seems Big Company People and Startup People can’t live with or without one another, which is why startups either become big companies (very, very rarely), get bought by big companies (rarely) or eventually disappear (often). Maybe if both parties knew the existential character of their collaborations and built this into their respective thinking and planning, then both might get much, much more from it.
The savviest executives and entrepreneurs know all about this inherent conflict, which is why they’re always inventing and reinventing new and old ways to bridge the gulf between one another. According to a number of recent studies at MIT, the Boston Consulting Group and others, the number and variety of corporate-run or sponsored accelerators, incubators and venture funds globally has
exploded 10-fold in the last 10 years and includes companies as varied as Amazon, Intel, Coca Cola, BMW, Walmart and Disney.
These same studies show some evidence that big companies with innovation programs such as these do sometimes get a boost in things like share price, but the evidence is not strong.
On the surface, there is something counter-intuitive about big companies, some with the largest R&D budgets in the world, building accelerators and incubators creating venture funds in order to innovate. It may also seem odd that big companies create whole innovation teams led, no less, by Chief Innovation Officers. They spend their days looking outside their own company for ideas, concepts, technology or whole products when an elemental aspect of every well-run company is the notion that it is internally organized to successfully change and adapt.
In fact, one would think that all of the most important innovations would come from Big Company People in that company. For example, the top five U.S. tech companies spent more than $76B on R&D in 2017 alone. And these same companies have found it necessary to make some of the largest acquisitions of small companies in history, with, for example, Intel spending $15B to acquire Mobileye, a (relatively) small self-driving car company.
Big Company People becoming Startup People and visa versa is an eternal truth in business today because innovation is much, much harder and far more complex than most of us know. It is so because of another truth about innovation: it often comes in small packages. Sometimes Big Company People forget this fact, which is yet another odd fact of life in business, because those same big companies were once little companies creating things that in an earlier time the long- gone big companies were not able to create, at least on their own.