Building ventures: what large enterprises can learn from a new generation of startups

Whether a bootstrapped startup or a corporate behemoth, starting a new business has always been a hit-and-miss endeavor. According to the decades-long formula, you design a business strategy, offer it to investors, assemble a team, launch a product, and begin selling aggressively. And somewhere along the way, you'll almost certainly experience a deadly setback. According to research, the chances are stacked against you; a whopping 90% of all start-ups fail.

However, to mitigate the odds that are definitely against new founders and certainly not for the faint of heart, we should consider a new way of doing things by emphasizing experimentation and iterative design over traditional "big design up front" development, and customer input over intuition or old rigid models. 

Where companies often tumble is their deep misunderstanding of the product/market fit. 

Coventures’ Riku Kokkonen explains.

“The problem is very often that founders jump straight from idea to solution, without validating the problem behind the solution. They go straight to building a Minimum Viable Product (MVP), without a proper validation process. It isn’t surprising that many end up building something people don't need, i.e. they don't have product/market fit.”

Go lean - scientifically?

In order to tackle challenges and to be able to devise a roadmap that allows for experimentation and scalability, you need a scientific plan for initiating a start-up that sources user feedback to lead and speed up the commodity's iterative growth. Eric Ries first used the term “lean startup” in his blog and later in his book "The Lean Startup," published in 2011. "An institution of people structured to develop a new product or service amid highly uncertain circumstances," he described it as.

Instead of established business standards, the strategy is drawing from a major discrepancy between start-ups and traditional business innovations. For example, if food kiosk owners are convinced that their business strategy will succeed because it has been proven multiple times before, start-ups come up with novel antidotes that they are not sure would work in the marketplace. Not to mention if they have created unique, category-creating solutions that did not exist before.

The Key to a Successful Lean Start-up

The lean start-up technique allows business owners to decide based on proper research instead of assumptions, increasing their chances of establishing long-lasting businesses.

Build, measure, and learn is like a circle; it goes around. Double-loop learning. However, it can be divided into the following three stages.

Here are the stages:

  1. Creating the least achievable version of the commodity and taking it to the consumers.
  2. The consumers examine the commodity and give feedback to the business.
  3. The business measures the feedback given and converts it into insights.

In the early days, this would have been done without a product, service or a solution. However, the earlier you are in the process, the more circles you need. Get out from the building stage and understand the market and customer pain points first. Then, develop a solution they actually need, and would be willing to pay for. 

Depending on the process, they learn about their potential consumers' demands and tell whether or not a feature is incredible or requires upgrading. This method saves resources and time for entrepreneurs. It also enables them to detect whether the product is okay, working with dedicated consumers or not.

What Large Enterprises Can Learn from Lean Start-up Strategy

Below are some tips established enterprises can learn from the lean start-up strategy to continue being relevant:

1. Adapting for Agility

By modifying its technology, a firm can mimic some of the startup world’s agility. Stefan Spang from McKinsey argues that even major organizations may implement new, more adaptable working methods. “So that smaller teams are able to develop a value proposition; they develop a product for a specific set of customers; they adapt it to meet the changing needs of their customers.”

2. Get the product/market fit right

According to Marc Andreessen, the father of this concept, "product/market fit means being in a good market with a product that can satisfy that market." 

In a nutshell, focus on the following:

  • You have a paying customer that comes back for more 
  • Your paying customers recommend you to others 
  • You can, with reasonable accuracy, predict your growth based on data

In the early days you should focus on the few: it is more important to get 100 people to love your product rather than millions who kind of like it. You also need to get into the trenches and be in direct contact with the customers, connecting and engaging with them.

3. Emphasize talent

Leading talent is not the same as perspectives and history. The principle of focusing on talent is one that major companies can and should implement. It's about letting go of your prejudices and views and hiring and growing a diverse group of people.

Encouraging talent can make a big difference in a company's agility journey. Many organizations have realized that using a lean start-up strategy and current models helps them compete more effectively for top personnel.

4. Adapting Your Leadership Style

To adapt, some established businesses may require a complete leadership style change. The only way for fruitful teams to work better is for their bosses to motivate them. The idea is that established company leaders should develop sensitive abilities to encourage adaptability and innovation in their organizations. Talk with founders you know and ask how they would do things in their companies.

Can enterprises do things differently?

Prescott Logan, the general manager of GE's Storage Division, used lean techniques. He started by researching a company strategy and then to consumer findings. He gathered dozens of potential clients, accompanied by his division, to explore novel markets and appeals. Members of the division set aside their PowerPoint presentations and instead listened to consumers' complaints about the current battery situation.

They wanted to know who bought industrial batteries, how often they used them, and their operating conditions. They made a significant change in their consumer priority due to the comments. They eliminated one of their initial objective segments, data centers, and replaced it with various one-utilities.

Furthermore, they restricted the enormous consumer portion of "telecom" to the cell phone dealers in developing nations with unpredictable electric grids. Finally, GE set aside $100 million to create an international battery-making factory in Schenectady, New York.

According to the reports published by the press, the need for the current batteries has greatly grown, and GE is already experiencing an orders backlog. Their initial one hundred years of administration training concentrated on establishing techniques and tools that normalized the prevailing businesses' undertaking and efficiency.

Currently, they have the initial set of tools used to look for modern business models as they initiate start-up investments. It also has come in handy to enable current businesses to handle continual disruption forces.


In this century, the forces of continual disruption are causing unexpected pressure on people in many organizations, especially in corporations. The lean start-up strategy enables them to combat it, innovate quickly, and enhance business.

At the start, you sought to know what large companies can learn from lean start-up strategy and how an established company could use the same methods for refreshing its strategy.