Why Big Companies That Act Like Startups Make Tremendous Profit

First thing first: take a look at the Fortune 500 companies in 1955 v. 2017: only 60 firms (12%) that made the list in 1955 are still on the list in 2017. 88% of the companies have either merged (or were acquired by) another organization, gone bankrupt, or still exist but have fallen from the top Fortune 500 companies.


Obviously, an unsuccessful digital transformation can play a huge part in the decline of a company. Other explanation than market disruption and churning: creative destruction over the last 60 years.

What is creative destruction? Joseph Schumpeter coined the term in “Capitalism, Socialism and Democracy” in 1942. It describes the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”


That said, the 60 companies still on the list are the ones that act like startups, constantly trying to reinvent themselves. Great example: General Electrics (125 years-old-company) under its famous banner: “Building, powering, moving and curing the world. Not just imagining. Doing.”

To understand how established companies keep up with an intense rhythm imposed by today’s world, we also took a look at huge companies that still act like startups: Google, Amazon, Apple, etc.


Why this handful of companies, still acting like startups, make an astonishing profit?

Buckle up, this one’s a doozy.


They apply an intrapreneurship mindset


Google is known for combining the entrepreneurial vision of startups internally within the R&D structure of the larger company. At Agorize, we are happy to see that the first premise (in Google’s nine principles of innovation) among one of the world’s most innovative firms is “innovation comes from anywhere”. Google truly believes that fostering a corporate culture of innovation and interaction can be done both within and outside the organization. And so do we.


9 principles of innovation by Google


They adopt lean startup techniques


We talked about it, General Electric is a 125-years-old company. If you say this to someone that does not know the firm (this person being someone who lived in a basement his/her entire life), he would say: “they could not be farther from a startup.”

However, in 2012, GE created FastWorks, a branded internal approach to translate lean startup principles and other disruptive strategies across its ecosystem. This is a perfect example of a company that understands that they need to combine speed and agility (as a startup would) with the scale and resources of a large structure.

According to Gartner: “By 2021, more than 50% of established corporations will be leveraging startup techniques”.

[clickToTweet tweet=”“By 2021, more than 50% of established corporations will be leveraging startup techniques” #leanstartup #agorize” quote=”“By 2021, more than 50% of established corporations will be leveraging startup techniques””]


They focus on the user (or consumer)


“Create a great user experience and the revenue will take care of itself”, says Gopi Kallayil, chief evangelist and brand marketer at Google.


Creating pain-free, easy to use products is relevant to every industry. If your main focus is the customer, the money will follow. Every single successful business would confirm the following: don’t try to be business-centric, be customer-centric. We used to produce things and push them down the throat of consumers via advertising and marketing techniques. Now, it is the survival of the smoothest: the one that will consider the people he is selling to, and respect them for their input.


Why Big Companies That Act Like Startups Make Tremendous Profit


They take risks and welcome failure


Iteration is king.

Two steps forward, one step back… Encouraging initiatives lead to take risks, and fail. Organizations that embrace failure extricate themselves from difficulties in changing markets.


Startups adopt lean techniques: they try, fail, learn and start again. Now more than ever, it is going to be difficult to be positive about anything. Hence the importance of iteration. Think about relationships: do you know lots of people who found the perfect person on their first try? I bet most of them failed again and again before finding the one.


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They create great working environments


Strong team spirit, recognition for hard work, work-life balance, etc.


If companies need to be customer-centric, they also need to be employee-centric. We are keen on employer branding at Agorize because we know how much it counts. We all spend a lot of time in our companies, we need to be delighted by our jobs. We will never say it enough, a happy employee is:

  • Two times less sick
  • Six times less off work
  • Nine times more faithful
  • 31% more productive
  • 55% more creative


Having cool offices is not just for advertising agencies. Take a look.


Why Big Companies That Act Like Startups Make Tremendous Profit


They embrace (and reward) weirdos


Eric Ries (who became a celebrity for his “Lean Startup” methodology) is devoted to making big companies understand that you can be a startup even if you have 10,000 employees.

Entrepreneurial spirits often integrate badly in corporate environments, that’s a fact. They tend to clash with conventional methods (and colleagues) and spend time on things that don’t pay out (except sometimes they do, way more than the usual stuff). Ries says “The personnel file of an entrepreneur and a bozo can look very similar”. Interesting.


They are transparent with their employees


Difficult, but necessary.


Successful companies always keep their people informed on big developments or major changes, even when it’s unpleasant. It can be difficult for major groups but they can start on a smaller scale: published meeting minutes, a weekly group discussion with top management, etc.


They don’t waste time


In the U.S only, 11 million meetings are held every day by companies. That’s quite an amount.

To make sure meetings are worth everyone’s time, Amazon CEO Jeff Bezos has implemented a very strict rule within its company: the two pizza rule. If the number of participants cannot be fed by two pizzas, there will be no meeting.


We have all been in endless meetings with way too many people in it for any problem to be solved. You know, the kind of meeting that when you get out of it, you say to yourself “An email would have sufficed.”

Sad thing though: the rule does not mandate that pizza be present at meetings.


Did someone say pizza?



Time to sum up 🚀


To put it in a nutshell (and let’s admit it, because we are nice people 😊), we made a list for you guys:

  • They apply an intrapreneurship mindset
  • They adopt lean startup techniques
  • They take risks and welcome failure
  • They create great working environments
  • They embrace (and reward) weirdos
  • They are transparent with their employees
  • They don’t waste time


We would love to have your input on this. What would you add to the list?


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