DISRUPTERS IN RESIDENCE
Marla Malcolm Beck, co-founder of Bluemercury. Millionaire. Macy’s employee.
can be unhappy BIG CORPORATIONS places these days. The new president is very publicly smacking them down— about the cost of Air Force One, about drug prices, about the car plants they have in Mexico. Activist investors harangue Fortune 500 CEOs about boosting returns even as the bosses struggle to increase sales. If the big companies seem bereft of breakthrough ideas, perhaps it’s because they are. Meanwhile, the Millennials they so crave as customers are hardly excited about working for them.
Fortunately for corporate America, where there has been zero job growth,
where products are often out of touch, where mindsets are sclerotic, there is one force that could save them: entrepreneurship—or, more specifically, the entrepreneurs whose companies they buy. American giants have begun to recognize that the well of innovation is still gushing among the Inc. 5000. And they are thirsting for it.
There’s a new, and favorable, twist in the tale for entrepreneurs, too. In the past, when a big company bought a small one, the founder got a big payday, but had to accept giving up control of a business built on years of love and grueling work, and that the acquirer, once in control, might have a slightly different plan for its new toy. Cultures clashed, cherished employees left, and all the excitement that went into creating the merger vanished. Even worse was the “acquihire,” in which a company got taken out primarily for its talent— without even a pretense of synergy.
In the trend that’s emerging, the founders of prominent startups are finding ways to sell their cake and have it, too. They can run their brands on their own terms inside larger corporations while at the same time providing spark and nimbleness to the parent company. “We needed some sort of outside catalyst to get our digital effort going at the speed I wanted it to,” says John Schlifske, CEO of Northwestern Mutual, which bought fintech startup LearnVest. “I didn’t feel we had the right speed and agility.”
We’re now at the point when entrepreneurship doesn’t have to end with a purchase. Even better, entrepreneurs like Alexa von Tobel at LearnVest and Marla Malcolm Beck at Bluemercury get to operate with resources they couldn’t imagine having as startups. Whether it’s Northwestern Mutual jump-starting its online financial planning, or Under Armour building a connected fitness initiative with a startup such as MyFitnessPal, this is how the smart 21stcentury acquisition gets done. “At some point, established companies have to adopt some startup thinking,” says Alexander Chernev, a professor of marketing at the Kellogg School of Management. “It’s not that startup thinking is the best thing ever. But it forces you to look at the world as a changing place.”