Wednesday, August 25, 2010

Ah. . .the Start-up

When people ask what's it like to be at a startup, I give them a metaphore.

At my previous job, I was given a coloring book. It was my responsibility to draw between the lines. Everything between the lines was my responsibility. I could make it however I liked, but I had definite limits.  If I messed up on one page, we had the resources to turn the page.

At the startup, I have a blank canvas.  Should I mess up the canvas, we don't have the resources to purchase another.  But, should we not complete the canvas as to fulfill the market demand, we will be defeated by competition.

This week, John Mauldin wrote "The Importance of Start-ups."  He spoke about the statistics of job creation and innovation.  I am more interested in the "Why."  What are the motivational factors associated with startups?

Human Capital Input

At a corporation, my individual contribution was unseen because I was apart of a whole.  My role within the organization was largely unseen from the whole.  Or, my poor performance could be subsidized by a better employee.  At a corporation of 1000, I am 0.1% of the corporate human capital input.

At a start-up of 8 people I am 12.5% of the corporate human capital input.  Therefore, waste in that 12.5% is seen quickly.  One person failing at a start-up will cause a noticeable failure.


Ever seen Lord of the Rings?  Start-ups are Frodo, corporations are the Eye of Soromon (not in a good v. evil sense, but due to power and resources).  The start-up runs quickly gathering customers without attracting the gaze of the corporation.  However, certain actions a start-up takes runs the risk of attracting the attention of the larger corporation.  This hyper competition felt by start-up causes them to run fast and even at night.

Individual Urgency

Nothing motivates the individual like the statement "If I don't perform, I won't be here next year."  The company may be here, the technology may be here, but I won't.

Hyper Capitalism

A start-up is capitalism at it's core.  A new company must perform all business functions to the level required, no more, no less.  If the company wastes resources, it will be gone.  If the company doesn't attract customers, it's gone.

It is capitalism at it's finest.

1 comment:

Kelley said...

start ups are also a lot of time---we miss you on those loooong days, but love you even more!....and are so proud!