In the last couple of years, more and more studies have shown that startups tend to become far better innovators than the large companies.

This is simply because, with the development of disruptive technologies growing in a fast manner, it's become extremely difficult for these large organizations to keep up, thus, moving them to outsource the innovative ideas and processes to startups.

Let's start with the basics. Startups are businesses that were recently established. However, in the tech world, the word startup has become synonymous with companies that haven't gone public or been acquired as of yet.

Unlike the large business corporations, startups accommodate a lesser number of employees and don't generally contain hard-line rules or stringent amounts of red-tape. (Think: Hoodies versus Suits).

But, just like most new businesses, startups are prone to failure.

In a report that was published by the Wall Street Journal (WSJ), it was revealed that about 3 to 4 startups in 10 would lose everything, while another 3 may return investment and only about 3 or 4 will get to the point of bringing substantial profit to the investors.

Although this statistics clearly shows that not all startups succeed, it has been revealed that they are still better innovators than the large companies or corporations.

But why?

The reasons for this claim include, but are definitely not limited to, the two following reasons;

Out of the box thinking;

Generally, startups tend to pay attention to the smaller details that most large companies may have not noticed or may have deliberately ignored. Startups come up with innovative ideas, unlike large corporations that tend to simplify already existing processes that their consumers may not actually need.

To explain better, in the early days, most of the large corporations did not see or envisage that the search advertising industry would be a big boom today.

Focus and motivation;

This is one of the secrets of startups. Team members are able to motivate each other to become better. Startups are not scared of disrupting existing processes; they are always keen on offering better efficient and credible models that would change the world.

Let's start with a more well-known story.

In 2009, developers Garrett Camp and Travis Kalanick founded Uber, and since then it has gone on to become one of the most popular applications in the world.

Worth over $40 billion, consider for a moment what corporation in their right mind would have ventured out into this space when the Uber founders did. Someone would have been shot in the boardroom.

It arguably wouldn't have been considered a market opportunity until once the self-driving car boom moved into the mainstream.

Meanwhile, because of their risk profile, innovations and approach, Uber has transformed not only the transportation-on-demand industry but also the entire automotive landscape as a whole.

Another well known website, Airbnb is a place where people can find rented homes when they travel.

Founded in 2008, Airbnb has been connected with over 65,000 cities in a record 191 countries of the world. This startup had an amazing growth appeal because of the number of tourists that would love to have an unforgettable experience when they travel.

Their model challenged the entire hotel industry -- and what's more, Airbnb didn't ever have the need to employ staff, buy properties or construct massive buildings with enormous overhead. That's innovation!

Again, here we see innovation coming from nowhere. Out of the largest hotel companies in the world (Marriott, Choice Hotels International, Wyndham, Hilton, etc.), none of them saw it coming or had the foresight to even consider building this.

Now Airbnb is a challenger to their entire livelihood and yearly returns.

Valued at $30 billion, it is the third most valuable private business in the world, after Chinese electronics company Xiaomi and Uber.

This innovative American startup simply uses its proprietary technology "zeroXess" to connect and deliver power the unconnected.

Kumbaya's zeroXess happens to be the colorful solar energy powered home and communication project that seeks to bring electricity and also connectivity to distant corners of the world.

According to the team behind this startup, ZeroXess has been developed to be an all-in-one platform for houses or homes that are off the grid.

Interestingly, this device is a 10-inch display system that allows users to control power, lights, connectivity, and also communication.

The connectivity aspect of the device is made up of 3G, 2G, Bluetooth, a satellite, and WiFi.

The solar power once it has been fully charged is capable of powering over 4 light fixtures at the same time charging about 6 additional devices via the USB port.

Also, this startup has designed the zeroXess to include a content library which is made up of childhood instructions, literacy programs, nutrition and health information, entrepreneurship courses, and agricultural data.

White Raven is an Isreali based startup that has created Artificial Intelligence (AI) software for self-driving cars.

This startup seeks to totally redefine how we interact with smart vehicles today. Their innovative application has been developed in such a way that it is able to carry out city-by-city indexing with the help of a public mapping data which trains its AI model.

This project is able to surface vital information such as; the navigation and address, tourism and commercial information, as well as identifies where a building starts and ends once you drive past it.

Interestingly, in the next couple of years, carmakers would Integrate the system into their vehicles. Currently, White Raven is seeking to Integrate this innovative development into public buses, trains, and taxis to enable them surface real-time data.

This Finland based startup that has created an Artificial Intelligence (AI) engine specifically for the processing of videos.

This startup combines audio recognition algorithms and computer vision in order to recognize things in videos just as human do. Their innovative platform was developed for multimedia companies to use both on real-time as well as on batch processed videos.

Valossa is capable of running facial recognition instantaneously with sentiment analysis and is also able to create a database for each video that will help you ascertain who said what at a certain period of time in the video.

Agrosmart makes use of sensors, image processing, and meteorological data to provide farmers with real-time crop monitoring and management application.

This Brazilian startup seeks to enable farmers to gain total control of their agribusiness.

They seek to revolutionize how farmers grow and monitor their crops, thus, making the entire process more efficient, credible, and stress-free.

This is an American based startup that has developed an edible coating that ensures that fresh and produced foods are able to last longer.

Apeel Science has been backed and fully supported by Bill Gates and one of the famous firms in Silicon Valley Andreessen Horowitz.

Interestingly, the team has gone ahead to introduce its long-lasting avocados at the Harps and Costco Food Stores.

Apeel seeks to ensure that more people are able to eat fresh food without having to worry about how long it stays fresh.

In conclusion, we can see here that many innovations would be ridiculous to suggest in a board room -- but nonetheless, still challenge the annual profit margins to large, legacy corporations.

Because of this, corporations need to tap into these kinds of innovations as they happen in order to stay relevant, defensive and agile.

About the Author: Simon Hitchens is a startup enthusiast, columnist, researcher and educator living in Chicago, IL. He dreams of someday living somewhere warm and writing a novel -- in ink.

About Gearbox: Gearbox.AI provides the leading corporate-startup engagement solutions designed to help open innovation leaders, corporate development professionals, and strategic partnership executives master the art and science identifying and aligning with what's next.

Through a unique combination of a membership community, AI-driven software, and cutting-edge expertise, Gearbox is focused on helping corporations keep pace in an ever-changing digital world and providing startups with new avenues for growth.

The result for modern innovators is unprecedented agility, risk management, and superior results. Headquartered in St. Louis, MO with offices in Denver, Chicago, and Los Angeles, Gearbox serves as a pivotal partner to large corporations, government organizations and a champion to innovative startups.

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