Intro
Recently, I read this article: https://worksinprogress.co/issue/the-rise-and-fall-of-the-american-rd-lab/ There’s a lot of nostalgia for the glory days of Bell Labs and other corporate giants that poured money into pure research. They gave us amazing breakthroughs, but that model is largely dead. As a founder, you might feel a twinge of envy…but the truth is, their decline has created huge opportunities for startups willing to approach innovation in a leaner, more targeted way.
Why the Old Model Crumbled
- Bureaucracy Stifled Breakthroughs: Big companies, even with good intentions, get bogged down in process. Bold ideas wither on the vine while awaiting endless rounds of approvals, or lose their edge to more nimble competitors.
- The “Sure Bet” Fallacy: Corporate R&D felt pressured to focus on incremental improvements to existing products, not the moonshots that require patient capital and tolerance for high failure rates. This leads to stagnation in the long run.
- Talent Got Frustrated: The best scientists and engineers want autonomy and the ability to see their work have an impact on the world. The rigid hierarchies and slow pace of traditional R&D labs drove them to startups…or to start their own companies.
The Startup Advantage (If You Do It Right)
- Focus Is Your Weapon: You can’t be everything to everyone. Pick a very specific problem, go deep on understanding it, and iterate rapidly on potential solutions. Big companies struggle with this kind of laser focus.
- Customer Feedback Is Fuel, Not Feedback Loops: Stay in constant conversation with early adopters. Their pain points and usage patterns reveal the path to true innovation, often in unexpected directions.
- Embrace “Productive Failure”: Celebrate ambitious experiments that don’t pan out. The key is extracting insights that make your next attempt smarter, which is something big companies are often terrible at.
- Your Team IS Your Secret Sauce: Attract passionate people who thrive on problem-solving, not those seeking the stability of a cushy corporate gig. Give them ownership and room to experiment, and they’ll reward that trust with breakthroughs.
Lessons for the Venture Building Era
- Think Like a Disruptor, Even If You’re Partnering: Can you co-develop a solution with a big, slow incumbent, bringing your agility to the table? These collaborations can be lucrative if you play your cards right.
- The “Talent Poaching” Opportunity: Frustrated engineers at big tech firms are increasingly open to joining ventures at the right stage. Highlight the chance to solve meatier problems and have greater impact.
- Exit Isn’t the Only Endgame: Thanks to shifts in how the public markets value innovation, building a long-term independent company that does meaningful R&D is possible again. Think beyond just getting acquired.
The end of the big corporate R&D lab isn’t something to mourn – it’s the dawn of a new era where ventures that embrace risk and harness the power of focus can achieve breakthroughs that change the world.
