Written By Todd Stone
As the leadership of corporate America continues to recognize the value of startup methodology in preventing atrophy and inspiring innovation, CEOs of large companies continue to evaluate how best to incorporate entrepreneurship into their massive organizations.
Big Company Startup Strategies
Some companies have pursued the mergers and acquisitions path, acquiring successful startups, holding onto those teams and having them operate either independently or as part of the bigger company. Other large companies have created innovation labs, or incubators that operate like startups and exist as separate entities within the company. Both of these can work to bring innovation to a bureaucratic behemoth.
But there is another, and probably better, way.
Arshad Chowdhury is a successful serial entrepreneur who now works for a New York City-based company whose motto is “an army of entrepreneurs.” His title is Entrepreneur and the company is called Bionic. What the company does is bring lean startup methodologies to some of the world’s largest companies. That includes validating assumptions, being agile, celebrating failure as an educational tool, and failing fast. Not unlike a consultant, Chowdhury and his colleagues make trips to the offices of their Fortune1000 company clients. But instead of simply offering advice, they implement a system they call the Growth Operating System (OS) that mirrors a real startup ecosystem.
Growth OS includes the creation of what Bionic calls validation teams, which are essentially early stage startups. Bionic’s entrepreneurs assist these teams, composed of the client company’s employees, many of whom have expressed interest in the system. The teams generally have ideas about a new product or program and Bionic entrepreneurs like Chowdhury help them figure out if their assumptions are correct. If they’re not, then on to the next idea.
“What’s very important about these validation teams is that they’re doing very low cost, on the ground, gritty experiments that barely make a dent on a large company’s balance sheet,” Chowdhury said.
Finding the Great Potential
Chowdhury regularly sees great potential in the people he works with. “There’s a lot of untapped talent in large American companies,” he said, “And large companies have resources that are the envy of every startup – from cash to talent, experts, offices and reputation.”
Unlike other approaches to incorporating entrepreneurship into large companies, Bionic installs a governance body, called a Growth Board. This group is composed of the company’s senior leadership, and they are coached by Bionic to act as venture capitalists.
“We say no to work when we realize that there isn’t [commitment] from the CEO. If there’s noopportunity to have a meaningful relationship with the decision makers who can turn well-validated ideas into supported businesses, we don’t proceed,” Chowdhury said.
Venture capitalists are a crucial part of any startup ecosystem, and Bionic believes that they, too, must be replicated inside a large company in order for the system to work. Hence, the aforementioned Growth Board. In the real world, a startup will not continue to be funded unless it reaches certain benchmarks. Investors don’t want to lose money on companies that are clearly failing. So why should a large company sustain a project or product that is also clearly failing?
“We teach around the lean startup methodology, but we also coach around funding, starting with seed funding and followed by rounds,” said Christina Wallace, VP of Growth at Bionic.
Wallace explained that sometimes a large company will put millions of dollars behind a product that hasn’t even been validated – that doesn’t have a proven market or is based on incorrect assumptions. This is exactly what Bionic is trying to prevent. According to Wallace, helping to prevent massive time and financial waste on un-validated projects is just as important as creating new profitable products and businesses.
How Bionic Started
Started in 2013 by veteran entrepreneurs David Kidder and Anne Berkowitch, Bionic has operated largely under the radar. Its first client was General Electric, which they worked with to create FastWorks, the name of GE’s implementation of Growth OS, according to Wallace. Beth Comstock, then GE’s Chief Marketing Officer, was instrumental in developing FastWorks with Bionic, evidence that involvement with senior management from the outset is crucial.
Bionic is not the only company of its kind. There are a handful of others that are also capitalizing on the need of big business to innovate by operating more like a startup. But Bionic’s Growth OS is definitely thorough. And the caliber of its entrepreneurs is impressive. Wallace herself, who is even an “Entrepreneur” at Bionic, founded two companies prior joining to Bionic.
Why entrepreneurs work with Bionic
Now, why would a serial entrepreneur with successful businesses under his or her belt be interested in working for a company like Bionic? After all, don’t entrepreneurs want to be their own boss? Yes, that’s true. However, Bionic entrepreneurs get to build startups constantly – and they get a paycheck.
“I really thrive on focusing on the early stages of a company – trying to validate things that work and don’t work,” Chowdhury said. “So Bionic is perfect for me because it distills my skills down to those core attributes I think I’m best at.”
Plus, Wallace says that the organizational structure of Bionic is very decentralized. Inspired by a book written by U.S. General Stanley McChrystal about organizing army units in the war in Afghanistan, co-founder Kidder consciously chose to create highly independent workteams. As Wallace said, the teams “join together, and then disperse.”
Speaking of being inspired by books, Kidder is also the author of the acclaimed “The Startup Playbook.”