The Lean Enterprise: How Corporations Can Innovate Like Startups

Introduction

Google has a stratospheric market capitalization, but the company that organizes the world's information could easily have been tens of billions of dollars richer. In October 2004, Ev Williams, who had joined the company when it acquired his startup, Blogger, left after a year of chafing under corporate bureaucracy. Blogger product manager Biz Stone departed 11 months later. The pair went on to found Twitter. The new venture went public in November 2013, and was worth $36.7 billion as the new year began.

Losing Williams and Stone was an expensive mistake, but Google didn't learn the lesson. Ben Silbermann joined the company in 2006 after a stint as an IT consultant. He spent nearly two years working on display advertising products but felt out of place as a nonengineer in an engineering-centric culture. He resigned and cofounded Pinterest, the online pinboard service that was valued at $3.8 billion as of January 2014.

Google still didn't get the message, and Kevin Systrom left the company in 2009 after two years of feeling stifled by organizational politics. Not long afterward, he cofounded Instagram, which he sold to Facebook for $1 billion in April 2012.

Williams, Stone, Silbermann, and Systrom—not to mention founders of Asana, Cloudera, Foursquare, Ooyala, and dozens of other young companies—quit because they were unable to exercise their entrepreneurial talents within a large enterprise. We're huge fans of Google. Still, if the iconic Silicon Valley success story, ...