Compared with start-ups, established corporations have many resources and capabilities that ought to give them a head start: customers, products, operations, licenses, distribution, marketing, and capital. But corporations lack one critical capability: the entrepreneurial muscle to take an idea from small to big, from zero to one.
The authors describe a new model—the hybrid start-up—which differs from typical internal cor­porate ventures. It combines the best of people, processes, and resources from both inside and outside the company. They show how many big companies are creating their own hybrid start-ups to unlock the value of their assets and defend their markets while becoming digital leaders. They draw on lessons from more than 190 such ventures launched over the past eight years with the help of BCG Digital Ventures, including those created by companies such as UPS (Ware2Go), Mercedes-Benz (RepairSmith), Volkswagen (Heycar), First American (Endpoint), AIA (Snackbox), Airbus (UP42), and others. The data provides strong evidence both that the model works and that hybrid start-ups are two or three times as likely to succeed as independent start-ups.
Established corporations have many resources and capabilities that ought to give them an advantage over start-ups. But every so often a couple of misfits with a laptop manage to steal a corporation’s lunch.
Incumbents lack the entrepreneurial muscle to take an idea from small to big. If an idea is radical enough and sound enough, a nimble start-up can disrupt an incumbent’s value chain.
Create a hybrid start-up—a new model that combines the best of people, processes, and resources from both inside and outside the company. Evidence suggests that it is two or three times as likely as an independent start-up to succeed.
Compared with start-ups, established corporations have many resources and capabilities that ought to give them a substantial lead: products, customers, operations, licenses, distribution, marketing, and capital. But too often a couple of misfits with a laptop manage to steal a corporation’s lunch. Why? Because corporations lack one critical ability: the entrepreneurial muscle to take an idea from small to big, from zero to one. If its idea is radical enough and sound enough, a start-up can disrupt an incumbent’s value chain.

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