The Corporate/Startup Gap: Who's at your BBQ?

Recently I’ve been working to evangelize the use of behavioral science in business, which often means working my network to get to the top levels of companies so I can do a bit of evangelism. And in doing so, I’ve learned something interesting: I don’t know corporate leaders. I don’t even know people who know corporate leaders.

You could argue that the first-degree gap isn’t surprising. After all, I came from academia and specialize in a field that is only newly being applied at scale in the corporate world. But it isn’t like I am generally unconnected: if you name a successful startup person, particularly in NYC, it is a fair bet that I either know them or am one degree away. I give about fifty talks a year, all across the world. I’ve got social media followers. Hell, you’re reading this!

And the gap isn’t unique to me. It isn’t only that I don’t know many people at the top of corporates, but due to the glory of LinkedIn, I know that I’m not even a hop or two away. There is something bigger going on here and I think it is at the root of a serious problem in increasing the efficiency of innovation.

If you look at who is running the top three levels (CEO, C-level direct reports, and their direct reports, the Baby C’s) of the Fortune 1000, a pattern emerges. Take my old boss, Satya Nadella of Microsoft, as a sort of archetype. Graduated from college in 1990, goes to work at Sun, joins Microsoft in 1992, finishes his MBA in 1997, appointed CEO in 2014.

Now admittedly, that’s cherry picking. But look at Nadella’s top level: minus the folks just acquired from LinkedIn, only one has ever worked at a startup (which was acquired by Microsoft in 1997). They all follow a fairly similar path: corporate, MBA, more corporate or consulting, then pick a company and spend 10+ years there. Along the way, you meet a bunch of other people doing the same and you all employ each other as you move around the companies.

Entrepreneurs have a template as well. You work at a startup, you found a startup, you fail or get acquired or get big…repeat. And just like the corporate folks, you meet a cohort of people who you value and they become the tribe that you recruit from and party with. They become your friends.

Neither of these two templates are bad on their own. But what this difference in path creates is a gap in social circle. And in a world where social circles create innovation because of creative collision, that’s a real problem.

Take recruiting as an example. I’m acutely aware of how limited my brain is. When a founder asks “Do you know a good X?”, I generally think back over the people I’ve talked to recently and who I have coming up, because that’s about all my puny memory can hold, a month’s worth of people.

I have to imagine that is probably how it works for corporate folks as well. When they see each other for drinks and ask those casual recruiting questions, I’m sure they suggest people who are top of mind for them. And because that social circle was formed over years in a corporate environment (and MBA programs; for entrepreneurs, there is probably an incubator cohort bias), they regurgitate other corporate people, just like I did for other startup people.

Again, this isn’t terrible on its own, except that we need crosspollination. Corporates need more innovation from entrepreneurs. Entrepreneurs need to do more business development deals with corporates. And as research points out over and over again (mostly because we continue to do nothing about it), diversity of viewpoint makes for stronger, more profitable companies.

I’m sure that at the very highest levels, this gap probably isn’t as real; Reid Hoffman probably knows plenty of CEOs and Satya likely knows plenty of founders. Although I do wonder how personal those connections are – at the backyard BBQ, is there really a mix? Does Indra Nooyi invited Matt Salzberg over for coffee?
And maybe that’s the challenge, the go forward action: we all take a second to find someone on the other side of the gap, in a similar role, and invite them to have a drink or a coffee and just talk about the areas of mutual overlap. Or the Yankees. I’m not sure it matters that we talk about business so much as we simply take the time to get to know each other.

And yes, I promise to do it as well: I just sent Mauro Porcini a note.

Side note: Because this was on my mind, I tried a quick Twitter question, asking my followers if anyone could think of an example where a Fortune 100 that wasn’t recently a startup hired a startup person into their C-suite, other than through acquisition. Grand answer? A massive blank. Nobody could think of one. And even if one or two trickle in after this post, it is telling that this isn’t on the tip of our tongue.
Shouldn’t it be common? Take a serial entrepreneur; if they have two or more exits, do we seriously think they can’t contribute meaningfully at the top levels of a company? If we want innovation, we better start hiring for it.