This is the ninth essay in our series of 10 Lessons From 10 Years Of The World’s Most Innovative Companies.
If you’ve had a chance to watch the HBO series Silicon Valley, you’ve had a taste of the newfangled business-building apparatus known as the incubator: Jam a group of misfit techies into an awkward locale, and see what genius (and absurdity) emerges.
It’s easy to underestimate incubators. To make a joke out of hackathons. To see accelerators and coworking spaces as passing fads. But to do so misses a larger point: These formats and processes, which have emerged out of tech culture over the past decade, offer a glimpse into the future of businesses–and only the foolhardy would ignore them.
Take hackathons. These group-sprint efforts by software engineers began as a way to attack difficult problems on tight deadlines. (“Okay team, we have 24 hours to get a prototype of this product up and running: Go!”) The term hackathon has been stretched, and even satirized, to apply to other types of groups and projects. (Creative agency Cultivated Wit even produces “comedy hackathons.”) What hackathons really represent, though, is a philosophy of execution: A small group of people, working in a concerted way, can get a tremendous amount done, provided they are willing to accept a less-than-perfect “minimum viable product.” Suddenly, speed takes precedence over perfection. Suddenly, continual iteration becomes not only acceptable but required. Constant change becomes part of the equation.
Incubators and accelerators like Y Combinator have demonstrated how powerful these approaches can be. The list of companies that have come out of Y Combinator include Airbnb, Reddit, Stripe, Dropbox, Twitch, Cruise, and hundreds more.
As for coworking spaces, they are a reflection of both changing career definitions—are we really going to work for the same company for 40 years?—and a recognition that interaction with people engaged in diverse and often unrelated fields can stimulate creativity and help problem solving. Plus, people of all stripes and persuasions, in locations all around the world, seem to like them (as represented by WeWork‘s quickly expanding global footprint). The concept is a hit.
All of this wraps into an even larger business conundrum. As enterprises scale, as cultures become entrenched, it’s harder and harder for innovation and creativity to flourish. This is why big companies like GE will put some of their people into a coworking space, or why a growing ad agency like R/GA regularly launches accelerator programs (often in partnership with even larger institutions). Can an enterprise be big and also agile? This is the ultimate unanswered question of 21st-century business.
Hackathons, accelerators, and incubators have become part of the toolkit for companies, as leaders experiment with the right formula for systematically building agility into their operations. The other tactic, of course, is to buy up smaller startup businesses and inject them into an organization, using that energy and ethos to counteract bureaucratic impulses. Facebook’s acquisitions of Instagram and WhatsApp can be seen as both shrewd portfolio-building and shrewd culture-building. Plus it creates a real-life storyline for Silicon Valley to parody.
This article is part of our coverage of the World’s Most Innovative Companies of 2017.