We need to act like a startup.
Working with established, traditional organizations in transformation projects, we hear “we need to act like a startup” more than we expected. This requires more than a statement, but a new mindset and operating model. But it shouldn’t be overwhelming.
Over the last 15 years of my career, I’ve played an interesting role. I’ve created business units and departments within large agencies to leverage digital as a business driver for our clients. This role has allowed me to not only build relationships with Fortune 500 leaders, but also with startups disrupting the more traditional industries. Sometimes there is a collaborative relationship between the two, sometimes they become arch enemies. But the sentiment from Fortune 500 leaders has always been the same: “We need to act like a startup.”
I’ve always been interested in this statement and have always tried to find new ways to respond. It’s definitely a loaded comment, but one that has a bit of fear and anticipation wrapped up in it.
So what does it mean for a large organization to “act like a startup?”
Be obsessed with a problem
Most of the startups and startup founders I’ve met are completely obsessed with a specific problem. That problem is the thing they are trying to solve with each waking breath with a sense of purpose and conviction. The organization, products and services are built around solving that one problem. Startups rarely have the challenge of legacy processes, technologies or business units they have to work around. They can go straight to a solution and expand.
While you’re at it, be obsessed with the consumer
Building off the obsession with the problem, startups know the person they’re trying to solve problems for. They break down the mindset of a traditional industry and become laser focused on solving the right problem for the right person. They know they won’t be able to help everyone (yet) but they will be able to help the right person now. They use these relationships as opportunities to learn, gain valuable knowledge about their lives and how the problem effects them and their day.
Create the ability to pivot and learn
Setting out to solve problems can be done one of two ways. You can lock yourself in an office until you have a solution then launch, hoping it’ll work. Or, you can put small solutions into market as quickly as possible, test with your consumer, gather data, iterate and grow. The most successful startups in the Industry 4.0 world do the latter. They work within an agile methodology that allows them to gather information quickly, make changes to their strategy or approach and pivot based on what they learn. This process allows them to find the right product-market fit while building a fan base at the same time. It ensures success in the marketplace as the solution comes to life.
Know when to bet big (knowing there is deferred profitability)
The biggest challenge of a Fortune 500 company to “act like a startup” is the reality of deferred profitability. Many organizations have specific ROI measures they have to hit with any R&D or strategy investment. However, finding product market fit and pivoting may take some time to find scale. This doesn’t give the idea time to hit the moment of investable scale. That’s one thing that the startup ecosystem does really well - it knows when an idea is ready for growth and it invests heavily to make it a success as it scales.
At Chinatown Bureau, we have the processes and mindset to help our clients act like a startup. Reach out to learn more.