Gorillas Can Dance

CHAPTER TWOWHY PARTNERING WITH STARTUPS ISN'T EASY

It's very difficult for a large organization to stimulate the same sort of incentives and flexibility that exist for an entrepreneur. We come from this background of “plan and perfect.” We research things very well. When we launch things we really invest in them… . This is the antithesis of what is needed in an entrepreneurial environment.

– Jeremy Basset, Founder, Unilever Foundry¹

SCOPE FOR WIN-WIN …BUT ASYMMETRIES TO OVERCOME

While on paper there is excellent scope for a division of entrepreneurial labor between large corporations and startups, there is also a challenge.

Asymmetries pertain to the very basis for potential win-win collaboration, stemming from large corporations' well-oiled exploitation of existing capabilities at scale while startups are well placed to pursue exploration with agility. As Professor James March argued three decades ago, established organizations tend to incrementally improve the capabilities that have served them well (exploitation), while younger firms build new ones to be able to be competitive (exploration).²

Ironically, these differences give rise both to the potential for mutually beneficial relationships and to considerable asymmetries between corporations and startups that impede the prospect of collaborating with each other. Even if there is enthusiasm to dialog with startups precisely because large corporations are more adept at exploitation and startups at exploration, there ...