Four Ways A Startup Mentality Can Improve Your Next Project

The culture of startups is something of an urban legend in the business world, perpetuated by serial entrepreneurs who seem to have cracked the code for what makes a successful venture. While many startups do eventually fail, their fabled out-of-the-box thinking and energetic focus also drives innovation. What lessons does the fight for survival within these scrappy small businesses have to teach the stable but often stodgy corporate structure?

I’ve spent my career moving between the lean, agile adversity of startups and the more traditional environments of multimillion-dollar companies. Larger corporations enjoy the support of stable revenue streams that are better equipped to drive the investment innovation requires, but they often fall victim to infighting and become bogged down in a sense of complacency that plagues larger companies. I often think about Andy Grove’s book Only The Paranoid Survive as one of my favorite codices for staying agile within a larger company.

Here are four components of startup mentality corporations should leverage to ensure continued innovation in fast-paced industries, such as tech, where success hinges on the race to get products to market.

Keep the team small.

One mistake made when staffing for projects at the corporate level is believing bigger is better. Subscribe to Jeff Bezos’ “two-pizza rule”– never have a meeting where two pizzas couldn’t feed the attendees. You can apply this rule of small teams as it relates to business or project teams, too. Small validation and delivery teams of no more than seven people are the ticket to mimicking the flexibility and speed of startups.

Empower the team to make decisions in the day to day, but establish regular check-ins. Scheduled project reviews with one stakeholder can go a long way toward having your proverbial cake and eating it, too. You’ll enjoy the speed and agility of small teams but also deliver the control and reassurance corporate leadership requires.

Break the habit of top-down thinking.

A crutch of corporate culture that often gets in the way of innovation is top-down thinking. If your team is waiting for an executive to provide marching orders and manage each decision from strategy to product, you’ll end up stifling creativity and accountability. An executive’s role is to tell you what to do, not how to do it. While leadership may have invaluable insight, you should be relying on robust processes to validate those assumptions.

As a leader, think about how you want to drive innovation. A peer used to tell me to beware of the “heaven on a whiteboard” effect. It is much better to assert a null hypothesis and validate an idea before deploying time and capital. For instance, we recently launched a minimally viable product outside the U.S. in order to observe behaviors. What we learned enabled us to pivot the product and change things like onboarding to better map to actual learner data.

BHAGs are powerful incentives.

As lean, bootstrapped businesses fueled by vision, startups don’t usually have the cash flow to spend on superfluous cushions or cautious safety nets. Corporations can raise the stakes and narrow their own margins of safety by creating small, constrained budgets for product or engineering teams. You can also follow the advice of author and entrepreneur Jim Collins and use big, hairy, audacious goals (BHAGs) or create false milestones to inspire a sense of urgency to complete tasks.

In the formative stages of my career, I had the good fortune of working with Rich Barton, the founder of Expedia, who has hatched several successful companies like Zillow Group. Rich is a fan of business strategies that center around big ideas. These ideas become a guiding North Star to drive differential outcomes for the companies that he runs. As Rich likes to say, it creates a “Pygmalion effect” where “great expectations beget great results.”

Don’t be afraid to fail.

If you’re operating within a corporate safety net and are flush with capital, it may be hard to foster the necessary bravado that drives startups. To build a corporate culture that thrives on risk-taking, you may have to allocate a “tear away” effort or a distinct profit and loss (P&L) responsibility so that your development team isn’t tied to the P&L of a larger division. You can even separate teams physically, moving them to a different environment where a unique culture can be fostered, and they won’t be lulled by the siren song of other corporate cash cows.

As long as your project is based on sound business methodology, you should operate as if you are immune to failure. Pioneer Square Labs (PSL), a startup studio in Seattle where I previously served as an entrepreneur-in-residence, executes on this concept with a small team of creators spinning up ideas, validating them and then hiring experienced full-time management with new venture capital to run them.

The idea is to de-risk the world of company formation, and PSL has a massive list of failures they highlight to investors and employees. As long as your corporation has a standard, Agile-based validation process that clearly identifies the different stages ideas are in, you should feel comfortable proudly showcasing failures alongside wins as part of the development journey.

Corporations need to grow a culture of transparency and empowerment for innovation to thrive, and it starts at the top. I’d encourage you to take an honest look and evaluate the behaviors within your corporate structure that throw up roadblocks to progress.

Don’t rely on financial statements as signals of trouble — the bottom line is the ultimate lagging indicator. Instead, shift attention to emerging indicators like voluntary attrition of talent and rising customer dissatisfaction. Allocate capital appropriately, and spend capital judiciously through small teams to avoid over-investment in large initiatives with negative net present value. If you are a larger enterprise, you don’t need to act like one. Leverage a startup mentality to break down your corporate structure and propel your project to the next level.