Article by Michael Gorton: Keynote Speaker, Serial Entrepreneur and Founder of Teladoc
When I was building Internet Global, the naysayers constantly told me: “If the Internet was such a great idea, the large phone companies would be building it.” When I was starting Teladoc, the pundits said: “If telemedicine could bring value to healthcare, Aetna or United would do it.”
In both cases, it was the entrepreneurs who created those industries. The task was not an easy one. Almost every time a large company tries to innovate and create an in-house unicorn, they fail. The fact is, if large established corporations and entrepreneurs could come together, things would go a lot easier.
So, then, why don’t they? Because corporations don’t think like an entrepreneur.
In my experience, there are three keys to success when it comes to creating a corporate unicorn that disrupts an industry.
Success in entrepreneurial endeavors requires risk taking
When I first started Teladoc, I went to the Texas Board of Medical Examiners to (excitedly) tell them how telemedicine would change the world. They listened, then informed me that if I was to build that company, I would go to prison. As an entrepreneur, I accept the fact that I’m risking a regular paycheck, reputation, and leisure time. I never thought I would potentially be adding “prison” to that list! What I know is that as an entrepreneur, I was able to think my way through even this problem. Ultimately, my team and I at Teladoc found a solution, and as a result, we now have a half trillion-dollar telemedicine industry.
Imagine that the Texas Board had said that to the CEO of one of the major healthcare companies. A telemedicine company certainly could have been incubated inside a company like Aetna or United Healthcare, with a firewall between the corporate and entrepreneurial entities. But ultimately, they would not have taken that risk, and the world today would not have the convenience of telemedicine.
Corporate America is largely risk-averse by its nature. Whether answering to shareholders or consumers, they tend to shy away from risk and prefer predicted, expected outcomes. By comparison, entrepreneurs accept that risk is inherent in disrupting an industry. They have learned how to respond to huge challenges, move fast and ultimately create transformational innovation.
Great entrepreneurs are built from adversity
When my friends from corporate America tell me they are considering starting their own company, I am generally skeptical. The skills required to achieve success in a large corporation are very different from that in a startup. The easiest way to describe life as an entrepreneur is to say we have higher highs and lower lows – often on the same day.
Entrepreneurs clean the toilets in the morning and negotiate the million-dollar deals in the afternoon. More problems come in the door every day than we have the resources to handle. Adversity is a daily (and sometimes constant) occurrence. Ultimately, it is the ability to take on any task necessary to be successful and to continue to move forward despite obstacles that distinguishes between success in the corporate world and that of a great entrepreneur. Accepting that adversity is a necessary part of the journey is the key.
Learn from entrepreneurs who have been successful
If building a unicorn is your goal, the importance of learning can not be overstated. It naturally aligns with risk taking and facing adversity. For an organization that wants to grow a unicorn, I believe there are two key ways a corporation could develop an entrepreneurial mindset to do this successfully.
Form strategic partnerships with successful entrepreneurs: Because the skillsets are so different between internal talent and successful entrepreneurs, corporations can seek out strategic partnerships with external entrepreneurs who possess the necessary drive, persistence, and risk tolerance to drive innovation. Consider collaborating with seasoned entrepreneurs who have a track record of navigating adversity and creating transformative innovations. In this way, corporations can leverage their abundant resources to add entrepreneurial skills to the mix, to then accelerate the development of in-house unicorns.
Establish an entrepreneurial incubator within corporate structures: Using a model like The Capital Factory, or Y Combinator, larger corporations could bring innovation in-house, running several projects with different objectives simultaneously. However, as mentioned earlier, it’s important to have the entrepreneurial mindset involved. Most great entrepreneurs would fail in a corporate structure, and the same is true for seasoned corporate executives in the high-pressure cooker environment of startups. In this scenario, it takes having both corporate structure and resources, paired with an entrepreneurial team of risk takers to be successful.
The bottom line is this. Large corporations who consider building an entrepreneurial endeavor in-house often go to who they know – some of their own stellar executives – to build their next corporate unicorn. That is a mistake. It doesn’t matter how smart that executive is, the skillset is very different. In the end, success is always about the caliber of the team, but a World Cup soccer team could never play on the same football field as a Superbowl team. The same is true in business – the skills are simply different.
Accepting risk, facing adversity, and learning are daily tasks for an entrepreneur. There’s no guarantee of success either. The difference here is that entrepreneurs and unicorns know that failure is key part of the process.
What’s an organization who wants to disrupt an industry by creating a corporate unicorn to do? I think it’s a simple answer. Bring together the skills, persistence and risk tolerance of entrepreneurs with the resources and access of large corporations. In this way, a unicorn has the greatest chance of success and growth.
About Michael Gorton
Michael Gorton is a keynote speaker on the topics of innovation and entrepreneurial disruption. With degrees in Physics, Engineering and Law, there is no limit to his curiosity. After working ten years as an engineer in corporate America, he founded 15 different companies including Internet Global, Palo Duro Records and Teladoc, now one of the world’s largest telemedicine companies. His forward-facing vision and expertise led him to being one of the pioneers of telemedicine and digital health, which is becoming a half-trillion dollar industry. To learn more or to book Michael Gorton for your next event, click here.