Why Startups Matter
We’ve all heard the rationale about the economic impact of startups. They create jobs. They employ new grads. They create exports. They distribute wealth (all of this assumes, of course, that they are successful startups!).
While I think these benefits are noteworthy, and a great benefit to our local economy, they are not the focus of this blog. Instead, I want to look at some of the intangible benefits that I would argue, affects our economy and its future growth in an even more profound way.
What do I know about startups? I’ve worked in two as a founder, two as a shareholder and numerous others as a growth consultant. I have seen the magic of rapid growth, the heartbreak of failure, and the many conflicts in getting there.
Creativity
One of the things I always found in a startup environment was a ‘can do’ attitude. “Give us a day, an all-nighter, a weekend – and we’ll crack it!”. I heard someone refer to this as the zeal of problem solving, and you get caught up in the sense that it is you against the world (sorry, world!). There’s nothing a pot of coffee, a Red Bull or a cold beer can’t do to motivate you to solve a problem.
Many of the problems that exist in the startup world are because of the shortage of resources - whether that be time, money or people. One has to get creative to spend as little as possible on getting as many results as possible. With limited budgets, startups have to depend on good old fashioned ingenuity to get through each work week.
In fact, the willingness to try things - and fail - is what makes them creative. The willingness to assume risk is what drives their curiosity and desire for experimentation. They tend to focus on the potential upside of success, more than the downside of failure. Entrepreneurial spirits thrive in these types of environments that present new challenges, opportunities, and possibilities. After all, necessity is the mother of invention.
Productivity
The first employees in the door of a new startup will be hard pressed to find a job description. I believe that no job description means there are no barriers or limitations. Early startup employees can exercise good judgment and keep things flexible. Processes are usually being developed on the fly, and refined and tested.
It’s not uncommon in a startup to be doing coding, product development and marketing – all in one weekend. CEOs are required to become polished salespersons, master the fine art of the slide deck, and the intricacies of the revenue forecast spreadsheet. Startups have many needs and are usually short-staffed, so you have to be ready to multi-task.
My point is, there are very few rules in the startup world, except for meeting your next milestone. Nobody asks how you got from 0-60. You learn, you experiment and you apply. Hopefully, you get a little smarter in the process. Life in a startup is just a series of problem solving exercises.
The deadlines and the pressures are immense in the start up world, so finding ways to do things faster is just accepted. In a fast-paced startup, you’re going to be needed everywhere, and no job description can capture all you’re going to have to do. You’ll need to know where and how to do it all. In short, a growing startup needs people who just know how to get things done.
Dexterity/ Versatility/ Adaptability
Every startup has a business plan. It’s researched, its polished and it’s crammed neatly into about 8-10 easily digestible pages. Then you go to the market to validate your ideas and get punched in the face by the customer. Welcome to the true reality.
I can recall once inventing something the world had never seen before – only to find the exact same thing in a Google search the next day. My heart sank. My brow beaded in sweat. Then, I had to call to see if they really had built it (not exactly).
The best startups are always willing to adapt to new technologies. Adapting to change can lead to major breakthroughs. During the early years, a startup will need to iterate the product plenty of times until they are able to get it right, to finally address the constantly evolving needs of their potential customers.
The key to making it in the entrepreneurial world isn’t just persistence. It’s versatility. How else do you explain the now ubiquitous startup terms, ‘pivot’ and ‘reboot’?
Whether a startup fails or is successful and exits, I’ve discovered that most of my partners and collaborators went on to found other startup companies, or fill management roles in others. Only a select few checked out on one of the best environments in the world. Most importantly, the ones who persevered, went on to infect others with the sense of creativity, productivity and adaptability that a startup truly needs in order to be successful.