Startups vs. Corporations: Who Would Win the Race for the Future?
February 16, 2022
The modern world, and especially the electronics industry, needs startups. Startups are the key to progress in all aspects of society – in this article, we’ll tell you why.
This article has been updated in May 2023.
When we say “startup” our minds instantly travel to Silicon Valley, San Francisco, New York or Boston, where almost all of the world’s major innovations have originated in the last few decades. But Europe is now catching up very quickly, according to McKinsey: European B2B startups are outperforming their US counterparts as they generate more value per invested capital.
"There is a great opportunity for corporates to support start-ups from the beginning, shape the products to their needs through codevelopment, and thus create innovation pipelines that do not require building an expensive corporate VC infrastructure." – McKinsey
“Startups are rooted in innovation”, as Forbes puts it, and precisely for this reason they are often regarded as “disruptors” because of their role of disrupting traditional ways of thinking and operating. When we compare a startup to a regular company, on a high level we can argue that the latter replicates a tried and tested business model, whereas the former creates a new template that challenges the status quo and opens up a whole new range of opportunities.
For the electronics industry, this ability to rethink old processes is a game-changer.
A startup is able to disrupt existing operations across a whole value chain, transfer knowledge from manufacturing to design, reduce necessary iterations and increase the benefits for all players – all of this in a timely manner. Moreover, startups use the most recent technology for their products as they are not bound to any old legacy tools, hence guaranteeing that users will always have access to the latest innovations.
What’s the main difference between a tanker and a speedboat? Speed. We could compare big companies and corporations to the tanker and startups to the speedboat: the latter move fast and can change course more easily thanks to their agile and fast way of working. This allows them to come up with the cutting-edge tool needed to solve a specific problem and, at the same time, to grow very quickly, as they don’t have to follow standardised protocols to implement new ideas.
Startups owe their speed and growth to another key factor: independence. Their decision-making process is usually in their hands, with no need for approval of a whole board of advisors and other stakeholders, mainly thanks to flat hierarchies and a direct connection between senior management (i.e. founders) and all other departments – most importantly, engineering and finance. This translates into the freedom for startups to choose their own product development direction, as well as how and where to best spend their resources, both in terms of skills and funds.
The other side of the independence coin is that startups are so independent that they can choose to depend on their customers: listening to and learning from the exchange with users allows a startup to make truly fitting and valuable product development decisions that otherwise would probably come from intuition or experience, as it happens in large companies. Corporates, in fact, have long innovation agendas that are not agile and leave little room for suggestions coming directly from the users. Simply put, by choosing to work with a startup, you can have a direct impact on product features, which is a huge advantage for your business.
Our goal at Luminovo is to modernise the way in which the most modern innovations are produced. We depend on three factors only: technology, customers and ourselves. Our dedicated engineers constantly review and update our products to ensure new features and functionalities are developed; we are cloud-based, meaning we get you up and running in hours instead of weeks and always offer the most up-to-date data through the modern technology of APIs; and, finally, we strive to address our clients’ needs with custom features.
Now that you (hopefully!) see the startup advantage, are you curious to know exactly how and why Luminovo’s products are so innovative? Then go ahead and have a look at our product pages. We offer a holistic Software Suite that simplifies processes for the entire electronics value chain. We’re also always looking for exciting exchanges about our vision and the industry to learn and widen our perspective, so let’s talk!