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It's time to re-boot the start-up mentality

Opinion

Published by:

26 June 2019

Author: Aran Potkin

Image: Photography by Kristopher Roller

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Fundamental change is needed within the heart of any business to truly live and breathe start-up thinking, making and doing.

For all the talk of ‘start-up thinking’ and ‘whitespace innovation’ within the corridors of businesses across the world, few companies are really walking the walk. To deliver successful innovation in-market requires businesses to implement so much more than ‘agile’ processes, ‘lean’ and ‘flexible’ teams, and allocating time within the day to ‘explore and experiment’. To really live and breathe start-up thinking, making and doing requires much larger fundamental change within the heart of any business.

Start-ups’ greatest weapon is their ability to spot opportunities and quickly get products to market, then adapt and evolve them once live. But for many corporates, large-scale quantitative concept test research is still the lifeblood of the go/no-go decision. This approach not only leads to a huge waste of money, time and resources for ideas killed by research, it also restricts how the business tracks and responds to changing consumer behaviour.

Disruptive innovation can be achieved – and fast – by shifting the mindset away from IP and in-house capabilities in terms of R&D, to embrace partnerships, joint ventures, and licence deals. Confectionary company Hershey’s had great success in the past embracing licence and merchandise deals to crack Asia using local manufacturers to prototype, build and launch new products relevant to the market beyond its core business.

Meanwhile, Disney recently came to us with the question: ‘how can we better leverage our brand equity to achieve new innovation?’ We started by looking at its existing retail and licensing partnerships to spot gaps and opportunities where it could drive innovation. It led to us creating a new sub-brand and product suite for Disney in partnership with a large specialist retailer that opens Disney up to whole new high-growth marketplace.

'Disruptive innovation can be achieved – and fast – by shifting the mindset away from IP and in-house capabilities in terms of R&D'

Photography by Patrick Perkins
'Start-ups’ greatest weapon is their ability to spot opportunities and quickly get products to market. Yet for corporates, large-scale quantitative concept tests can see ideas killed by research'

Going after the smallest addressable market still feels counterintuitive to most corporations where the natural instinct is to target the biggest audience possible. But chasing mass-markets can often inhabit the ability to uncover a genuine un-met customer need and build a product and proposition that can truly connect.

The Fintech start-up Pleo, which offers smart payment cards to help streamline business expenses, started in 2015 with a laser focus on its target customer: progressive SMEs with less than 100 employees. Four years on, Pleo has signed up over 3,500 companies in Denmark and the UK.

Then there’s the opportunity to unleash brand evangelists. Focusing on those who care most about your brand and finding ways to enable them to spread the word is the strongest and most cost-effective way to grow. Monzo’s commitment to being open and transparent about what it is doing has seen the company build an active and engaged community, resulting in more than two million customers in the UK and hundreds more signing up each day.

The power of this group was clearly shown when Monzo asked its customers to fund its next stage of growth, with Monzo managing to raise £20m ($25m, €22m) in less than three days – one of the biggest and fastest rounds of fintech crowdfunding in the UK ever – all down to its evangelical superusers, and bringing them even closer to the heart of the business.

Aran Potkin is managing partner at Zag, an independent consultancy focused on growth strategy and brand experience.

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