I've been hearing several discussions about the current state of corporate innovation. Many have faced layoffs, and those who remain are struggling to meet expectations. Some argue that focusing on short-term and metrics like ROI, revenue and market share will help these teams position themselves better and become self-financed exploration units. However, exploration is never self-financed.
In the world of startups, survival is everything. Founders wake up every morning with a singular mission: figure out how to stay alive and grow within their financial runway (the amount of time a company can operate before it runs out of cash, expressed in months). Their accountability is direct—to themselves, their teams, and their customers. Every decision is measured by one unforgiving metric: will this keep us in the game, or will we hit the end of the runway without attracting further investments, revenue streams or users?
Corporate startups operate in a completely different universe. These teams are charged with exploring new markets and creating disruptive opportunities, yet they’re held to the same standards as the core business. Metrics like revenue, ROI, EBIT and market share—perfect for mature businesses—become poison when applied to innovation. The result? Corporate startups are judged by their failure to deliver certainty, not their ability to uncover opportunities.
Explorative innovation, like research in R&D, relies on smart external funding—through budgets, grants or investments—since its value emerges over time, not instantly.
The starting metrics problem
Here’s the problem: corporate startups live in a world of uncertainty, but they’re measured by tools designed for predictability. Lagging indicators like revenue and profit assume that the market, product, and customer are already known. But innovation thrives on leading indicators: how many assumptions have been tested? How quickly is the team iterating? What early signs of customer demand are emerging?
Instead of fostering exploration, these companies force their innovation teams to chase results prematurely. Corporate startups, instead of operating like nimble explorers, become box-checking exercises—driven by fear of failure rather than a hunger for discovery.
Corporate startups, instead of operating like nimble explorers, become box-checking exercises—driven by fear of failure rather than a hunger for discovery.
Startups have "skin in the game"
Now compare this to a startup. Founders don’t have a safety net. They’ve poured their time, money, and reputation into their venture. Their accountability is absolute—if they fail, it’s game over. That singular focus drives everything: relentless customer discovery, rapid prototyping, and pivoting as needed.
Corporate startups? Not so much. Most innovation teams are salaried employees. Their personal risk is minimal, and their incentives are often misaligned. They aren’t fighting to survive—they’re navigating office politics and quarterly reviews. Without the pressure of skin in the game, the urgency to break through simply isn’t there.
Corporate innovation needs new metrics
If corporate startups want to succeed, they need to stop copying the core business’s playbook. Exploration requires different starting metrics and a different mindset. Instead of asking, “What’s the ROI?”, ask, “What did we learn this week?” Shift from lagging to leading indicators:
Hypotheses validated: Are we turning guesses into facts?
Customer discovery progress: Are we uncovering real demand?
Experiment velocity: How quickly are we testing and iterating?
Even more critically, give innovation teams the autonomy and protection to fail. Success in corporate innovation isn’t about avoiding mistakes—it’s about learning faster than the competition. This is the unfair advantage of every startup.
Why startups win
Startups succeed because their survival depends on it. They measure what matters: validated learning, customer traction, and then throughput/breakeven potential. Corporate startups, however, are forced to act like they’re running an established business before they’ve even proven their idea works. This mismatch in metrics and motivation is why most corporate innovation efforts fail. They’re set up to optimize what’s known, not to discover what’s possible.
Startups focus on fast learning and validation, not revenue, to build a thriving company. Measuring corporate startups by traditional lagging financial metrics before they have customers hinders innovation and growth.
Conclusion: Let corporate innovators become innopreneurs
Corporate startups will never succeed if individual projects are measured by metrics meant for the core business. Innovation is inherently messy, unpredictable, and slow to show results, but this is where breakthroughs happen.
The solution? Measure innovation portfolios by progress in learning and exploration in the desired field of transformation, not by immediate ROI, revenue, or market share. Hold innovation teams accountable for gated investments through autonomy and founder-like incentives. Most importantly, give them the freedom to experiment without the constant pressure of failure. Startups instinctively understand this. Corporate innovators must adopt this mindset—before their innovation efforts implode.
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