The Advantage of Being a Startup
The term “startup” can arouse different kinds of emotions depending on the individual, but for the most part they associate with high-energy words like “risky”, “fast-moving”, and “chaotic”. As a result they often get portrayed as a room full of underdogs, risking it all, and looking to take down the IBM’s and Microsoft’s of the world through large doses of sleepless nights and creative problem solving techniques. As romantic as that may sound it only allows them to keep up with the corporate titans.
Working late hours and attempting to think outside the box is not what distinguishes a startup from a Fortune 500 company, because they do both of those with significantly more resources. Do you think every Google and Apple engineer are leaving the office at five and getting hour long lunch breaks? Or that Gillette’s marketing team is not pulling out all of the stops to counter Dollar Shave Club’s campaign to distinguish their identical products? Well they aren’t, but startups still hold an advantage over their head.
Startups gain strength from their ability to act quickly. You can read more in depth on this in The Innovator’s Dilemma by Clayton Christensen, but for now the important part is to understand the decision making process in both scenarios.
Fortune 500 Company
Bob, the prodigy engineer working at Fortune Company X with 30,000 employees might have a breakthrough project to compress all of the company’s data via a revolutionary middle-out platform, saving them millions if done successfully. Fred shows his project to his boss who understands and believes in the new technology, but needs to get it approved from his superior before moving forward. This continues for several levels of management until an executive is finally forced to make a decision. In his eyes he is facing the decision to risk what has been working, and more importantly keeping his paycheck, so it’s an easy decision to disregard the “solution” from a two-year software engineer employee. He rejects the idea via a one paragraph email on his way out the office to make his 1pm tee time.
Richard, the prodigy engineer working at the newest startup on Poplar St, just figured out how to compress the company’s data ironically similar to that of Fred at Fortune Company X. He came up with the idea after reading several yelp reviews complaining about the speed of their website. Instead of working on it during his spare time he went straight to the co-founder with an explanation of the situation and a plan of action. Since the co-founder does not have to worry about retraining thousands of employees, and has personally witnessed Richard’s talent and identical vision for the company, he blesses the endeavor. Months of trial and error later the speed problem is nonexistent and clients are happier.
In short, the larger that a company is the more factors and risk that go into every decision made, resulting in reduced progress. You might be thinking that the ability to change quickly does not directly translate to changing for the better. You’re only partially correct.
They might not change for the better the first time. But they have the ability to change again after that. And again. And again. However, startups do not have an advantage over larger companies solely on their ability to act quicker. The full advantage is realized when clients know of their ability to change, and hold them accountable to do just that. That is what sparks the trial and error process, and ultimately how we create the world in which we want to live.
A lot of companies claim to be transparent these days, but transparency means nothing if the customer cannot actively change what they see is weakening their experience. Some might label this higher accountability as a disadvantage…and it can be to those entrepreneurs only looking to make a quick buck. But to the innovators genuinely looking to make life better for others, it is an invaluable asset.