Break the Rules!

6Make the Future Winnings Yours!: Beg, Borrow, But Don't Steal

 

Among the most well developed of the practices that help large companies try to innovate is the way in which new initiatives are proposed, approved, and funded. As you saw in Chapter 4, there's typically a series of stages and gates though which proposed new products or other new initiatives pass on their way— their proponents hope—to market. There, we shone some light on how differently most large companies think about new products compared to some of their “think narrow, not broad” entrepreneurial brethren. Here in Chapter 6, we'll examine another key difference: how the necessary assets are acquired.

“Why should I invest in those assets before I know whether my new venture will pan out?”

In most large companies, there's an unstated rule that many, if not all, of the assets required to pursue something new—including a physical facility, like a factory or another retail store, for example—will have to be built, leased, or bought and paid for. Investment, they call it. But why, street‐smart entrepreneurs ask, in their counter‐conventional fashion, should I invest in those assets before I know whether my new venture will pan out? “Wouldn't it be better if I can borrow them?” at least until things are proven, they ask. “Why put money unnecessarily at risk if I don't have to? Let's break that rule!”

There are ...