90% of startups don’t end well.
Startups are often not much more than stories. Sadly, many of these stories have painful endings. Of the 650,000 startups cooked up in the UK last year, 9 out of 10 will invariably fail. With those failures will come broken dreams, loss of money, anguish or even mental illness. All startups come with risk. And if fledgling businesses get over the first hurdles and start to gain traction, their next task is to chase down more capital and the proven wisdom of some expert mentors.
Founders give 200% but may not get it back.
The accelerators and VCs, that stand ready to speed the best companies on the road to success aren’t always ideal partners. Some accelerators don’t bring more than office space and a route to market - which hardly makes up for the distraction of being in one. VCs are professional investors so you can expect them to push for harsh valuations and one-sided Ts & Cs. As a result, founders are often cut out of what they deserve for the time and commitment spent birthing their commercial babies. UK VC funds are pretty small too. I’ve heard it argued that if you add up all the funding delivered to the entire UK startup community last year it is slightly less than Uber raised in a single incremental round over the same period, last year, in the US.
“We called it Virgin because we were”.
Despite all these challenges, everyone is still drawn to startups. They’re cool. They’re modern. They’re the future. We love the startup ecosystem for its infectious, can-do attitude, its enthusiasm to try new ideas and new technology. We marvel at the unrelenting passion and positivity of startup founders. In contrast, let’s turn our attention to the big, lumbering, blue chip businesses that find themselves wrestling with relevance. The same ones that are staffed by masses of people who have pretty much disengaged from the workplace. It’s hardly surprising that these companies are frequently found staring over the wall at the shiny delights and sparkling possibilities to be found in startup land. What we often fail to appreciate is that big corporations have everything that startups don’t. Things like customers, brands, money, distribution, stakeholders, reputation, marketing skills... Need I go on?
NailIng the future to a mast of conviction.
Business thinking in Britain and America favours the fresh ideas and unmeasured potential of the disrupter. We forget that businesses which endure, do so for a reason. They too, were once fresh and new but were smart enough to build rules and systems that let them expand. Let them cross borders. Launch new products. Take on competitors. Even pay tax - rather than be subsidised by it. Big companies shouldn’t be seen as the enemy. (OK, maybe some). What separates big companies from start-ups is the art of the possible, the self-belief, the joyful enthusiasm and the terrifying fear that comes with nailing your whole future to the mast of your conviction. If you’re running your own business, the decisions you make only impact you and the small team that you probably hired. If you’re running a corporate your decisions impact stakeholders all over the place. There’s so much at risk. It’s no wonder that CEOs of big firms find it so much harder being agile and decisive.
Married couples live longer.
The ideal situation would be a trusting partnership between startups and corporates. A partnership of mutual respect and intellectual equality. One that allows startups to perform the role of innovator, developer and tester like an R&D department that’s culturally more nimble than the corporate it works with. Once a viable product emerges from a startup, what better to put it into a corporate machine that has the muscle, the gravitas and the firepower to deliver success in the shortest time possible.
If you’ve been living on a diet of startups, you’ll be familiar with their agility, purpose and enthusiastic fervour. Now imagine the addition of strategic intelligence, scaling skills, manufacturing experience and the relatively vast financial resources of the corporate. These two business factions fit together so perfectly if only it were possible for both parties to appreciate and learn from the contrasts in attitude and culture. And for both parties to smash through all of the patronising behaviour and mutual snobbery.
A better, safer, future. With no boundaries.
Germany has regenerated Berlin by removing the wall that divided two diverse cultures. The city is richer and stronger as a result of diversity. Companies, of all sizes, can learn from this experience. I encourage the birth of a piece of new business jargon. The matching of the hard working, precarious startup and the conservative, process-rich corporate. What would it take to build an ecosystem designed to produce Pairups?