Why did spin-off startups easily fail?
As you may know, startup is one of the most attractive workplaces for all talents in this era.
Google, Facebook and other silicon valley venture companies are the top market value campanies in the world.
They can easily disrupt existing rules or regulations with their technology and their growth is unbelievably fast.
On the other hand, many established companies has tried to change themselves and innovate their industry.
One of the typical methods is launching a startup with massive assets, budgets and network which parent company has.
In theory, they have an advantage compared to an usual startup which founded 'from scratch' .
However, it's not easy to remember the name of a famous spin-off startup which successfully drives their business and overcame their parent company.
Why?
In my opinion, the main reasons are as follows.
1.Motivation
2.The past success as the current debt
3.Speed
Firstly, I know the employees in spin-off startups have high motivation and sense of responsibilities however it's totally far from the ones which true entrepreneurs have. The risk of running a startup is massive. It's like gambling with all your money and time. So I guess the difference of motivation between pure startups and spin-off startups makes a critical gap to business.
Secondly, the famous book, 'The Innovator's Dilemma', says a successful company has strong discipline.
It often puts the skids under their new business because new business needs some break-through idea which ignores the existing regulations.However, most established companies have achieved their bright successes on the existing rules. Or they created these rules in order to enhance their position.
Thirdly, it's the most different one, speed to make a decision.
Can you imagine how the established company works?
There are so many people only for tiny and small decision. Also they potentially have some conflicts if all decisions are not necessarily beneficial for all departments and divisions. So you need to overcome some politics in spin-off start-ups.
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Why did do spin-off startups easily fail?
As you may know, startups is are one of the most attractive workplaces for all talents in this era.Google, Facebook and other Silicon Valley venture companies are the top market value campanies in the world.
They can easily disrupt existing rules or regulations with their technology and their growth is unbelievably fast.
On the other hand, many established companies have tried to change themselves and innovate their industry.
One of the typical methods is launching a startup with the massive assets, budgets and networking which the parent company has.
In theory, they have an advantage compared to an the usual startup which founded 'from scratch' .
However, it's not easy to remember the name of a famous spin-off startup which successfully drives their business and overcame their parent company.
Why?
In my opinion, the main reasons are as follows:
1. Motivation
2. The pPast successes as the current debt obstacles to innovation
3. Speed
Firstly, I know the employees in spin-off startups have high motivation and a sense of responsibility, however, it's totally far removed from the ones which true entrepreneurs have. The risk of running a startup is massive. It's like gambling with all of your money and time. So I guess the difference of in motivation between pure startups and spin-off startups makes is a critical difference gap between them. to business.
Secondly, the famous book, 'The Innovator's Dilemma', says a successful company has strong discipline.
ItThey often puts the skids under their new business because new businesses needs some break-through idea which ignores the existing regulations. However, most established companies have achieved their bright successes on the existing rules. Or they created these rules in order to enhance their position.
Thirdly, it's the most different one, speed to make a decision.
Can you imagine how the established company works?
There are so many people involved with even only for tiny and small decisions. Also they potentially have some conflicts of interest if all decisions are not necessarily beneficial for all departments and divisions. So you need to overcome some politics in spin-off start-ups.
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