Startup Scaling

12 Reasons Your Startup Needs Disruptive Innovation Strategy: The Secrets of Corporate Venturing

Learn about disruptive innovation, how it impacts startups through corporate venturing initiatives, and how it drives long-term success for your startup success.
People working on a startup
Min Read
January 23, 2023

Disruptive innovation is a game-changer for companies looking to make their mark (think of success stories like Netflix, YouTube, and the first Apple iPhone). But what exactly is disruptive innovation and how can it benefit your startup?

Definition Disruptive Innovation

Originally described by Clayton Christensen, disruptive innovation (DI) has been called the most influential business idea of the past century. Disruptive innovation describes a new and innovative product or service that dramatically changes how we solve a particular problem.

This article will dive into the concept and explore why it's a powerful strategy. DI is a substantial force for your startup's success, so you can help people with great products and earn substantial profits along the way.

As well, when you disrupt current markets and innovate with new products, you really have a chance to change the world in a particular field.

We'll also discuss the role of corporate venturing in fostering innovation within a larger company. And we'll provide 12 reasons why your startup needs a DI strategy.

So by the end of this article, you'll have a good understanding of how you can propel your startup to new heights, and how to implement DI in your business model effectively.

What is Disruptive Innovation and How Does it Impact Business?

What do you need to know about disruptive innovation (DI)? Let's review the definition: Disruptive innovation describes a new and innovative product or service that dramatically changes how we solve a particular problem. These innovations often come from startups and entrepreneurial ventures that are looking to shake up the status quo.

Consider how Uber changed the taxi business, or how Apple's multi-touch touchscreen defined the modern smartphone.

Disruptive innovations, when well implemented, transform entire industries and dramatically change traditional market dynamics. They lead to new opportunities for the companies that implement them and the customers who benefit from them.

In the above examples, both Apple and Uber started with a relatively simply concept. Those concepts have been carefully implemented into great products with high customer satisfaction.

In this way, DI can threaten established companies that are slow to adapt. In order to stay ahead of the competition, it's vital for companies to seek out and implement new ideas continuously.

They can achieve this innovation through strategic approaches such as corporate venturing and incubation, which allow companies to access the creativity and expertise of startups and external partners.

Next, let's look at how corporate fits with DI and your startup.

What is Corporate's Role in Radical Innovation?

Large or small, radical innovation is crucial for a company's long-term success. While smaller startups may have the agility to adapt and implement new ideas quickly, larger corporations can struggle to keep up with the modern pace of innovation. This is where corporate venturing comes in.

Corporate venturing is a strategic approach big companies use to foster innovation and stay ahead of the competition. It involves a company investing in and collaborating with startups or external partners to access new technologies, ideas, and talent.

Corporate venturing allows companies to tap into the creativity and agility of startups while also providing resources and support to help these young companies grow.

Disruptive innovation in particular, can be a key focus of corporate venturing. A large company can stay ahead of the curve by investing in startups that are rethinking traditional industries or offering novel solutions to problems.

This will help the company stay relevant in the competitive marketplace and drive growth and profitability. The EY consulting firm emphasized the need for innovative startups in the business world:


Conditions that foster innovation include autonomy and freedom, insulation from the orthodox, small team size, a relentless focus on solving consumer problems, a lean startup approach that encourages experimentation, no failure stigma, and a bias toward non-conformity. These are not generally to be found flourishing in multi-billion dollar mature companies.

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Keep such partnerships in mind as you discover reasons why disruptive innovation is great for your startup.

12 Reasons Why Your Startup Needs a Disruptive Innovation Strategy

Your startup needs every advantage it can find in order to survive and thrive. Increase your impetus to innovate with these strategies:

  1. The Edge: Disruptive innovation will help your startup gain a competitive edge. By offering new and innovative solutions to a problem, your startup differentiates itself from the competition and attracts more customers.
  2. New Markets: DI enables your startup to enter new markets and expand your customer base. It can open up new opportunities for your business, allowing you to tap into more markets and reach a wider audience.
  3. Productive Power: Disruptive innovation can lead to increased efficiency and productivity. By implementing innovative ways to streamline processes and solve problems, your startup will save time and resources, resulting in increased efficiency.
  4. Drive Profits: It can drive growth and profitability. By offering a unique and valuable product or service, your startup will attract more customers and generate more revenue, leading to profitability.
  5. Company Culture: Disruptive innovation can foster a culture of innovation within your startup. By encouraging your team to think outside the box, you create a culture of innovation that will stand out (think of legacy innovators like Bell Labs who invented the computer transistor).
  6. Top Talent: A DI strategy can help your startup attract top talent. Companies known for their innovative culture attract top talent looking for an exciting and forward-looking work environment.
  7. Happy Customers: Disruptive innovation can lead to increased customer satisfaction. By offering a great solution to an annoying problem, your startup can create lots of happy customers.
  8. Stay Relevant: It can help your startup stay relevant in a competitive market. Your startup can attract more customers with groundbreaking innovations which are ahead of current trends.
  9. Boost Your Brand: Disruptive innovation can lead to increased brand awareness. By offering an amazing product or service, your startup can generate buzz and attract eyeballs, leading to better brand awareness.
  10. Stand Out: DI can help your startup stand out in a crowded market. By offering something truly innovative, your business can differentiate itself from the competition and become a segment leader.
  11. Partner Up: Disruptive innovation can lead to new partnerships and collaborations. By offering a trailblazing solution, your startup will attract the attention of other companies looking to collaborate on your impressive tech.
  12. Speed: It can help your startup move fast and stay ahead of the curve. By actively applying new technologies, your startup keeps moving rapidly and can stay ahead of whatever comes.

Consider as well your startup's partnership and exit strategy: Would you like to partner with a large corporation regarding your innovative solution? Or just sell your products and services to them?

Now let's look at the power and influence your disruption brings to the market.

Business ideas and process doodles

The Impact of Radical Innovation on Business

DI transforms entire industries and reshapes the way we do business. In modern times, it does this every few years. Consider the ice box versus the refrigerator, the horse & buggy versus the car, and the solo camera versus the smartphone.

One company dies, and another company is born. How do you stay ahead? Your startup disrupts traditional markets by offering a fresh solution to a problem. And depending on how big the problem is, which you are solving, the potential is vast.

Household names like Apple, Nike, and BMW are always doing this, buying lots of interesting startups that haven't yet made the news.

Remember Blockbuster or local video rental shops? They effectively got eaten by Netflix.  This trend will continue as the modern economy keeps moving faster.

So who is doing the disrupting? In many cases, disruptive innovation comes from startups that are looking to shake things up. These young companies often have the agility and creativity build the new thing. However, disruptive innovation is not limited to startups.

Large corporations also drive DI through strategic approaches such as corporate venturing. Investing in and collaborating with startups and external partners allows a company to access new ideas and technologies, so they have the best chance to survive and thrive.

In this way, big corporates launch amazing new products and services faster than otherwise possible, with the help of innovative startups.

The Role of Corporate Ventures in Your DI Strategy

Ready for an adventure? Venture refers to the act of taking a risk in the hopes of achieving a desired outcome, such as financial gain or growth.

In the business world, venture often involves investing in and supporting growth companies, particularly startups which create new tech that be part of an ingenious product.

Corporate venture is a type of venture in which a large company invests in and collaborates with startups, subsidiaries, or other external partners in order to foster innovation & growth. This is a strategic approach for big companies looking to access new technologies, ideas, and talent and stay ahead of the competition.

By investing in growth companies, a larger company can tap into the creativity of your startup and drive disruptive innovation within its own business. This leads to new opportunities for profitability.

Why do they do it? Via calculated risks and trying the next big thing, even the biggest multinational is able to market new tech that breaks ground and amazes customers.

The Role of Incubators in Fostering Disruptive Innovation

Incubators are organizations that support the growth of early-stage companies. Incubators also provide startups with resources such as office space, mentorship, and access to networks and funding in order to help them succeed.

Corporate incubators, in particular, are incubators that are owned or supported by large companies. These incubators provide startups with access to the resources and expertise of the parent company and the opportunity to collaborate and partner with the parent.

The Company Role in True Innovation

There are several ways a company can drive DI within its own business. One approach is through strategic financial investment, such as corporate venturing. By investing in and collaborating with startups and external partners, new ideas have a chance to succeed despite the risk.

Another way a company can drive radical innovation is through internal transformation efforts. This can involve fostering a culture of newness within the company.

What is the culture at your corporation? Are there departments that encourage employees to think outside the box and develop new ideas and approaches? This can be in an R&D division, an innovation lab, or a corporate venturing division.

The Importance of Reinvention in Business

Reinvention is a crucial component of success in the business world. It means rethinking and refreshing old ideas into the current world context.

And DI in particular, refers to truly innovative products that significantly change how we think about a particular problem or industry.

These are good opportunities for your business. They expose chances for change in every market, no matter how "boring" it might sound at first. The razor blade, the taxi, and the hotel have all been reinvented in the last decade (Dollar Shave Club, Uber, Airbnb).

Consider several different types of reinvention and innovation, ranging from incremental improvements to game-changing market disruptions. Which one aligns with your firm?

Think about radical reinventions which have challenged old norms and made big profits along the way. Then, take a strategic approach:

  • Invest in research and development (R&D)
  • Make a day, department, or team for people to think outside the box and come up with new ideas
  • Collaborate with external partners through approaches such as corporate venturing

In this way, you stay ahead of static ideas and drive your growth and profitability.

How to Drive Innovation in Corporate Venturing

Effective management plays a key role in driving innovation within a company. This includes smart product development, which refers to the process of creating, improving, and bringing a new product or service to market.

Product development involves a wide range of activities, including research and development, market analysis, and product design and testing.

Creating a systematic and structured approach to innovation means having a system. This system is part of the culture and part of the operations and is, therefore, able to generate meaningful results at a consistent rate.

This can also involve establishing a clear process for finding and pursuing new ideas and providing the budget, resources, and support needed to bring those ideas to fruition.

Creative development also involves setting goals and metrics to measure the success of your development efforts and continuously reviewing and adjusting the process as needed.

Development management is essential for driving innovation. By establishing a clear and structured approach, you effectively identify and test new ideas, bring those ideas to market, and earn more profits.

The Role of Strategy in Driving & Maintaining Innovation

Your strategy is a system that ensures your success. This shapes your focus and actions every day: your team and company habits that provide reliable results.

Your strategy determines where you invest your time and efforts. And innovation is a key component of success. So having a clear and effective strategy, which finds fresh ideas, is the tool that gives you amazing results.

Your strategy for innovation must also include long-term plans with steps and actions needed to achieve your objectives. Brainstorm, list those ideas out, and revise and update as needed.

For a corporation, it involves leadership approaches such as corporate venturing and incubation, which allow access to new technologies from startups and various partners.

Keep talking to people and get ideas. Make every effort to connect with others as you explore ways to upend your industry segment.

Your Startup Can Partner with Corporate Venturing

It's clear that innovation is vital for the success of startups and corporations alike. And just like people, companies enjoy and benefit from helping each other.

Of course, companies benefit from fresh ideas. So when you think about your startup, consider DI as one key differentiator. It can help you find your competitive edge.

As well, your startup might benefit from corporate venture capital. If your startup offers something new, innovative, and disruptive to the current market, corporate venturing may be the answer to skyrocketing your success.

At Wayra, we're here to help you innovate and bring your new idea to market. Take a look around and get in touch with us today.

*Images by vectorjuice and rawpixel on Freepik

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Wayra Germany
Written by
Wayra Germany

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