For decades large companies have gone shopping in Silicon Valley for startups. Lately the pressure of continuous disruption has forced them to step up the pace.
More often than not the results of these acquisitions are disappointing.
What can companies learn from others’ failed efforts to integrate startups into large companies? The answer – there are two types of integration strategies, and they depend on where the startup is in its lifecycle.
The Innovation Portfolio
Most large companies manage three types of innovation: process innovation (making existing products incrementally better), continuous innovation (building on the strength of the company’s current business model but creating new elements) and disruptive innovation (creating products or services that did not exist before.)
Companies manage these three types of innovation with an innovation portfolio – they build innovation internally, they buy it or they partner with resources outside their company.
Five Types of Innovation to Buy
If they decide to buy…