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See how Xinova partners with PepsiCo and Innit to launch the new Seattle restaurant tech startup, SousZen, that aims to digitize ‘back of house’.

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The IRI conference attracts Leaders in Innovation from all over the globe to talk about everything R&D. While these companies span a wide variety of industries, many innovators were seeking solutions to similar problems. We chatted with Jim Euchner, the Editor-in-Chief of Research-Technology Management at the 2019 IRI Annual Conference in Pittsburgh about how big businesses can navigate a lean startup model.

Startups are different than large companies because their context is different.”

Jim Euchner, editor-in-chief, Research-Technology Management 

That context really speaks to where the business is in its lifecycle. A startup can take far more risks and is not beholden to customers, shareholders, and a staff to maintain a certain solvency at its earliest stages.

Established businesses are attracted to the lean startup model. They wish they could have the same flexibility, but there are many concerns about creating a new startup within an existing enterprise, explained Euchner.

  • It could cannibalize the business.
  • It could lead the business in directions that are not profitable.
  • It can threaten the functions inside an organization.
  • How do you evaluate the risks a new business presents?
  • Other departments confused as to how this affects their job function.
  • Being involved in a startup can affect an individual’s career path. If I’m associated with it and it fails how am I perceived?

When the startup concept is introduced into an enterprise, it’s often manifested as political resistance. But, as Euchner notes, it is possible to isolate the aforementioned issues. Don’t negate the concerns. They are legitimate and need to be addressed. For example, as he explains, “If people are concerned about cannibalization, be explicit about the business model you’re pursuing, and the risks associated with it.”

You can present the business model and figure out the risks by conducting some experiments. Once you have that, you can negotiate from a position of fact. There are reasons you want to grow a startup within an enterprise. Large companies have assets such as customers, staff, technical expertise, and channels.

“If you can leverage those capabilities, then you can create a competitive advantage with your startup,” said Euchner. “If you try to leverage them, without caring for those risks and concerns, it’ll crash and burn and I think that’s what most often happens.”

Read about more R&D insights from the 2019 IRI Conference

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