A colleague of mine goes to Wal-Mart for almost everything he needs. When I asked him why he doesn’t support mom and pop shops more often, he replied, “Wal-Mart is the most successful mom and pop shop that ever existed.”
In other words, big companies were once startups, too, and they got big by doing a lot of things right. I work for a big company, but I’ve always approached my job like an entrepreneur at a startup, which is how I created a business plan that enabled me to run our digital magazine business as a virtual “start-up” inside our traditional company walls.
Having been at a huge multi-national company while trying to launch a new company, I’ve learned how to apply the following practices inside a big company that will work for any new venture.
Create your own skunkworks.
Let’s say you’re working on perfecting a new consumer product. You get a few advisors, a few investors and a consulting firm. Before you know it, you’ve got 10 people to answer to - that’s even worse than at a typical bureaucratic company. While it’s always good to learn from previous mistakes rather than make them all yourself, you’ll move a lot faster if you minimize the number of people you’re beholden to.
There is a long and celebrated history of secretive, separate groups that can be more innovative and more risky than the rest of the companies that house them. The most interesting skunkworks today has to be Google X, which encourages a “shoot for the stars” approach to innovation, with projects from a space elevator to the self-driving car.
The value that entrepreneurs must take away from a skunkworks approach is the ability to take risks and move quickly while still working within a larger ecosystem. Of course you want your product to be relevant to the market, but before you take on the risk of a huge funding round or big expectations from high profile advisors, do as much work undercover as you can. You’ll get through the pitfalls and find the right way to position your ideas without the scrutiny of the big bosses. While this approach implies that you’re going to do some heavy lifting on your own with very little funding and no visibility, it also frees you to go for it before other people start holding you back.
Own your P&L, even if you need a process to do it.
At big companies, you’re usually judged by how successful you are at managing your bottom line. In the world of entrepreneurship, it can easily turn upside-down, with losses outweighing profits for years on end. It might seem like a good idea to spend big early to make a big impact, or pick up a big funding round based on high expectations of future success, but it can ultimately hurt you much more than taking the bootstrap approach.
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Think of Toyota and their radical Six Sigma approach to production. Literally every aspect of car making comes under scrutiny and every worker is empowered to make sure that there is no waste introduced into the system. Many big companies train their workers on the process, but not so much in startup land. Starting small and lean implies that it’s possible to actually be profitable, and that might win you entrance into the small percentage of ventures that make it big. Hiring people might be easier if they know they’ll have a direct stake in performance and see that you’re already profitable than if you give them free lunch and cool hardware.
Approach everything differently.
Being an entrepreneur means being creative about every aspect of your business. At big companies, the projects that often succeed are the ones that had a leader who stepped back and approached the entire problem from another angle. Approach your business with the same radical view.
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Starbucks CEO Howard Schultz was able to turn around an ailing empire by addressing a huge variety of issues. Nothing was too large or too small to fit the bill. From major changes such as closing hundreds of stores and creating a national rebranding campaign, to smaller fixes like making sure the food they served didn’t interfere with the famous coffee aroma, he made sure that every aspect of the company was improved as much as possible. Another way to think about taking a creative approach is in the form of pivots. Your vision should be as flexible as the signals you get from your customers. Some of the most successful products in the world are a result of a pivot taken at a big company. Wrigley started out as a soap company and gave gum away for free as an incentive. When owner William Wrigley, Jr. saw how popular the gum was, he quickly changed his focus.
No matter if you’re at a company of one, or at a huge brand, it always pays to ask if there’s a cheaper, faster, better way to do it, and to make sure you profit as you do.