Based on a QR_ study of global automotive OEMs, EV start-ups are typically 1-2 years late to market relative to their originally stated launch date. The study highlighted one of the key reasons: the transition from digital to physical, and the impact of physical debt. This shows up most clearly in the extensive time it takes to fix physical issues discovered in late-stage development or prototype builds.
Interestingly, the study also highlights that once start-ups finalise a concept and have funding, they move faster than established OEMs at making decisions and progressing the concept and design. But transitioning from digital to physical too early can have outsized impacts on validation and launch. Start-ups are likely to lose their up-front agility edge — and the bold thinking that goes with it — if they can't scale on time, expand, and adapt their operations to meet flawless manufacturing, supply chain, and production-quality requirements.
This article covers lessons learned from several engagements with start-ups — and the importance of talent and digital solutions in scalability readiness.
Businesses are always looking for the novel idea that will accelerate and sustain their competitive advantage. Established OEMs pursue it in the context of their existing portfolio and operations. Start-ups have to craft and tune an entirely new operating model to make it happen.
Making it real: starting off on the right foot
Beyond the ability to craft and market novel ideas, the key elements of successful start-ups:
- 1. Getting the right founding team — People are core to getting things started — usually a few individuals driving things forward, especially when starting from scratch.
- 2. Marketing the idea — Being able to build a business case — and secure early funding — off the back of it.
- 3. Preparing to scale — The ability to transition to stable operations and grow is often what makes or breaks a start-up.
- 4. Getting things done — The need to be hands-on is probably the most valuable ability at a start-up.
These four factors are central to developing a learning and rapid-decision-making culture — and vice versa. They're also essential when transitioning from product concept to industrialisation (production and commercialisation), and to making things happen with limited resources.
For start-ups
Start-ups are about sharp product vision, execution, and intense teamwork. Flat structures provide agility, yet they rely on a few individuals to set direction and bring things forward. New talent brings new perspectives, combining expertise and experience. Ideally, management blends a mix of experienced veterans with new talent for a fresh perspective — avoiding being constrained by established knowledge or thinking patterns, while retaining the lessons those employees have learned from past challenges. Finding resourceful, self-motivated talent is mandatory — but not sufficient. They must also align to company values and demonstrate their ability to "do extraordinary things" (Gulati and DeSantola, 2016).
That can be triggered by bringing domain expertise from other industries, extending someone's existing role to a new discipline, or combining several complementary skills into a single team to foster experimentation.
In other words: it means finding the balance between a set of competing tensions.
- Leveraging existing expertise versus the ability to learn new things.
- Adding new talent to the existing organisational structure versus realigning activities across existing teams, creating a new team, or developing new functionality to align with a new operating model.
- Capitalising on industry knowledge versus building new knowledge — and combining the two in a new context (cross-learning).
- Generating new ideas versus effectively implementing them.
- Solving problems versus mitigating risks.
- Adopting good practice from the industry or solution platform versus defining a bespoke way of operating. So-called "best practices" can often be of limited relevance — success is organisation-dependent.
Thinking "outside the box" implies learning from others across disciplines or industries — trying new things, experimenting, and doing things using unconventional approaches or techniques. It's about trying different perspectives, not being afraid of failure, breaking existing codes or habits, and embracing new challenges. To bring a new product or service to life, start-ups must be ambitious, iterate quickly, fail fast, and renew their approach.
The same principles apply to operational delivery and enterprise digitalisation. They aren't just a means to an end — they're the foundation of a progressive, mature operating culture.
Building a culture of empowerment and agility
Building investor relationships while developing a credible, attractive product or service is another critical factor for start-up longevity. Achieving that requires the right information visible at the right time — empowering individuals to make the best possible decisions and, effectively, run the business. Not every decision is data-driven, but complex engineering and manufacturing deliverables certainly require informed decision-making at every level.
When it comes to developing and running a start-up, this is about product and data confidence — and credibility across core functions:
- Creating a culture of empowerment — Enabling high-performing engineering teams to focus on creativity and problem-solving — in other words, focusing on value-added rather than non-value-added activities (ENVA).
- Building the relevant information system — Defining a holistic master-data strategy across the digital thread, combined with robust integration architecture and connectivity — ensuring the right data is available to the right people at the right time.
Empowered engineers can actively contribute to new-idea experimentation and be made accountable for their development, together with the management of associated risks and mitigations. Transparent, timely data management is an essential aspect of that.
What are your thoughts?
