Idea in Brief

The Problem

Established corporations have many resources and capabilities that ought to give them an advantage over start-ups. But every so often a couple of misfits with a laptop manage to steal a corporation’s lunch.

Why It Happens

Incumbents lack the entrepreneurial muscle to take an idea from small to big. If an idea is radical enough and sound enough, a nimble start-up can disrupt an incumbent’s value chain.

The Solution

Create a hybrid start-up—a new model that combines the best of people, processes, and resources from both inside and outside the company. Evidence suggests that it is two or three times as likely as an independent start-up to succeed.

Compared with start-ups, established corporations have many resources and capabilities that ought to give them a substantial lead: products, customers, operations, licenses, distribution, marketing, and capital. But too often a couple of misfits with a laptop manage to steal a corporation’s lunch. Why? Because corporations lack one critical ability: the entrepreneurial muscle to take an idea from small to big, from zero to one. If its idea is radical enough and sound enough, a start-up can disrupt an incumbent’s value chain.
A version of this article appeared in the March–April 2023 issue of Harvard Business Review.
Read more on Entrepreneurship or related topics Start-ups and Scaling entrepreneurial ventures