Small companies will disrupt the market of large companies by releasing a new version of an offering which is inferior in quality or performance to that of the large company and which appeals more to a subset of customers. But makes up for it in another way, like a lower price or convenience.

Management at the established companies often think, they’re making the right decision to let the new companies take over the low-end of the market. However, over time and iteration, the new technology will begin improving to handle more demanding uses.

Better integrate startups in your corporate culture; let them interact with your functional departments and business units. Provide them an environment of exchange and growth integration.