Success requires a blend of old and new organizational traits. New Business present three challenges:
1. lack of hard data
2. new businesses requires innovation, innovation requires fresh ideas and fresh ideas requires mavericks
3. corporate budgeting systems favor established businesses.
To counter act corporations need to:
1. develop strategy by trail and error--experimentation is essential. Managers begin with hypotheses about what will work and what won't work then search for ways to validate and invalidate.
2. narrow the playing field by scoping out certain areas of promise; the most effective companies combine brainstorming, usually at the division level, with corporate criteria for reducing the list of ideas.
3. the deepest learning comes from interaction with a small number of customers not surveys of many potential users
4. use prototypes to test business models as they give life to emerging products and provide a basis for informed responses from potential users.
5. trail and error strategy formulation shouldn't be entirely unguided. Concrete goals are essential and goals must take the form of project based milestones. Trial and error process must be bounded upfront.
6. existing companies will enjoy an advantage in a new business creation only if they build on their strengths otherwise they will be no better off than start ups that must begin with a clean slate.
7. Staff new ventures with staff that have credibility to draw upon using managers who are already successful at running larger business but are known for their willingness to challenge convention.
8. not all skills are best developed from scratch; some can be purchased depending upon the availability of skills in the market and time needed for internal development.
Meeting the challenge of entrepreneurship, HBR