Itai Green joins Yoel Israel to explain why corporations cannot depend entirely on internal R&D, how corporate-startup partnerships should work, and why speed is essential when adopting new technology.
Large corporations have customers, capital, infrastructure, and established distribution. Startups bring new ideas, focused execution, and the ability to move quickly.
According to Itai Green, author of Innovation or Elimination, both sides need one another. The challenge is getting organizations built for stability to work effectively with companies built for speed.
In his conversation with Yoel, Itai discussed the mistakes corporations make when pursuing outside innovation, the structure he uses to identify relevant startups, and why a successful pilot can become both a technology decision and an investment opportunity.
Why Corporations Need Startups
A large company can theoretically develop almost any technology internally. It can hire experienced employees, create an R&D team, and allocate a significant budget to the project.
What it cannot purchase is the time already spent by a startup developing that solution.
Corporate customers want answers quickly. If a startup has already completed most of the work, beginning again internally rarely makes sense. By the time the corporate team has built its version, the startup may have advanced even further.
“The only way for a corporate to provide a solution tomorrow is by engaging with someone that already invented the wheel,” Itai said.
Corporations contribute the elements startups often lack, including existing customers, budgets, operating platforms, networks, and distribution. Startups contribute speed and technology developed around a specific problem. When the relationship works, each side fills gaps for the other.
Why Corporate Innovation Moves Too Slowly
One of the biggest obstacles is the difference between the pace of technological development and the pace of corporate decision-making.
Technology can change significantly while an enterprise is still reviewing a proposal. Lengthy approval processes, internal gatekeepers, and multiple layers of management can turn an attractive opportunity into a missed one.
Itai believes change must begin with the board and C-level leadership. When senior decision-makers recognize that the surrounding market is moving faster than the organization, they can set a different expectation for the rest of the company.
This is especially difficult for successful companies. Strong revenue and profitability can create what Itai calls the “arrogance of success.” Leaders assume the methods that produced past results will continue working, even as competitors adopt new tools and operating models.
Previous success does not guarantee that the existing approach still fits the current environment.
A Process for Finding the Right Startups
Itai uses a structured process to help corporations identify technologies connected to their actual business problems.
The work begins department by department. Employees and managers define the challenges they are facing, after which Itai returns with 50 potential startup solutions. The corporate team ranks those companies and selects the 10 most relevant.
Those 10 startups participate in a one-day innovation workshop. The day begins with an explanation of why corporations should work with startups and how to manage the relationship. Each startup then receives 10 minutes to present and 20 minutes for questions.
At the end of the workshop, the corporate team decides which companies should receive a second meeting.
According to Itai, approximately seven of the 10 startups typically move forward. Those discussions generally lead to two or three pilots and, ultimately, one or two integrations.
Why the Workshop Happens in One Day
Concentrating the process into one day keeps participants focused on the company’s future. Relevant executives, managers, and employees are in the same room, without their regular meetings or daily responsibilities interrupting the discussion.
The people who defined the problems also review the solutions. That involvement gives them ownership of the process instead of making innovation feel like an initiative imposed by an outside consultant or isolated department.
As the process is repeated across the organization, employees become more comfortable evaluating startups and participating in pilots. Innovation moves from an occasional project toward an operating capability.
Why Technology Pilots Fail
Itai said pilots and integrations usually fail because of people and processes, not because of the underlying technology.
Employees need to understand why the company is adopting a new solution and how participating in the process affects their own relevance. Without that support, even a strong product can become trapped between departments, approval requirements, and competing priorities.
Corporate teams may also hesitate after discovering a promising startup. They request more information, extend the evaluation period, or wait an entire quarter before making a decision.
Startups cannot operate according to that schedule. They have limited cash and must make decisions based on their runway. If a corporation is interested, it must adapt to the startup’s timeline.
“If you’re not able to work fast, don’t waste your time, your resources, your money, and don’t waste the startup’s time,” Itai said.
Why Traditional Consulting Can Miss Early Innovation
Itai recognizes that major consulting firms employ highly intelligent people and can provide valuable work. However, he questions whether their usual research methods are suitable for finding the earliest innovation.
Traditional analysis often relies on published research, online sources, market reports, and other available information. An entrepreneur building a prototype may have no website, press coverage, or public company profile.
No amount of online research can identify a startup that has not yet established a visible presence.
For Itai, a corporation’s innovation leader must maintain direct relationships with the ecosystem. The goal is to become a trusted contact whom entrepreneurs approach while they are still developing the product.
At that stage, the corporation can provide feedback, become a design partner, and understand where its market may be heading before the information appears in a formal report.
What the Wix and Base44 Deal Shows
Itai pointed to Wix’s acquisition of Base44 as a public example of a corporation responding to technological change.
As Itai described it, Base44 enabled people to build applications or websites through prompts. He said even his eight-year-old child could use it to build a soccer game.
For Wix, a company with thousands of employees and an established website-building platform, acquiring Base44 provided immediate access to technology that could influence its market. Developing a comparable product internally would have taken time while Base44 continued progressing.
The decision illustrates the choice corporations face when a startup develops strategically important technology: partner with it, invest in it, acquire it, or risk allowing it to become a stronger competitor.
When a Corporate Should Invest
Itai believes the best moment for a corporation to invest in a startup may come after a successful pilot and before full integration.
At that point, the corporate team has tested the technology against a genuine business problem. Its employees understand the industry, the need, and whether the product delivers a useful result.
“A pilot that the corporate runs with a startup is by far the best due diligence an investor can have,” Itai said.
If the technology solves a problem for one major company, it may address the same need for similar organizations worldwide. An investment allows the corporation to benefit from the startup’s broader growth in addition to using its product internally.
How Startups Can Approach Corporations
Itai recommends that early-stage founders begin by requesting conversations with enterprise leaders.
The initial goal should be to understand the company’s pain, determine whether the proposed solution is relevant, and learn from the organization’s industry experience. This creates a relationship before the startup begins pushing for a pilot.
Founders should also evaluate the corporation’s seriousness. If the company repeatedly delays or cannot make decisions at the speed the startup requires, Itai recommends approaching another potential customer, including a competitor.
Corporate-startup collaboration can give enterprises faster access to technology and provide startups with customers, feedback, and distribution. But the relationship only works when both parties recognize that innovation operates on a limited clock.
