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What Legacy Companies Can Teach Start-Ups
We talk so much about what start-ups in Silicon Valley can teach legacy companies — but what about the reverse?
I’ve realized this while working with company incubators and mentoring at 1871, the tech incubator here in Chicago. When I met with new founders, they often seemed so attached to their ideas yet were so isolated that they couldn’t see the issues immediately apparent to someone who works with legacy companies.
I’d implore that start-ups should take a page out of the legacy company playbook. Here’s a starter list of what legacy companies can teach start-ups.
“What will the investors think of this idea?” is a good filter to use for every potential offering. When you’re beholden to investors, as most large companies are, they’re going to think every new idea is terrible unless it makes them money. If you have just five weeks of runway left and think you could make your brilliant idea work, think critically of what investors will think and use your remaining resources wisely.
Be honest about your team’s skills so you can actually scale. Legacy companies have structures to get all the jobs done needed to grow. Your founder probably can’t be the CEO forever, you’ll probably need a COO, and you’re going to need to start hiring specialists to take over for the generalists who launched your company.
Don’t be afraid to reach out to people and say, “Hey, I really admire XYZ. Can I talk to you about that?” Even though start-ups are often very guarded and in competition with each other, legacy companies don’t work that way. Executives all the time are like, “Hey, I’m at HP, and I want to talk to someone over at Disney about how they do this thing” — and they talk. No one hesitates to talk shop among legacy companies; it’s encouraged and expected.
You don’t always have to reinvent the wheel — use things others have done. Big companies love processes, and they thrive on them. Why? Because process can equal efficiency, which equals money, which equals happy investors. If you read a book that has processes you think you can use, adopt some of it. Do you see principles that companies that you admire use? Great, pull those. Don’t feel you have to do everything from scratch!
That’s my take. What do you think start-ups can learn from legacy companies?