Startups tell attractive and compelling stories that inspire a sense of endeavour and individual pursuit. They represent the unlikely hero that wins the day, the computer geek who builds a multimillion dollar empire from his parent’s garage.
But more than that, startups have brought us some of the most transformative new products and services; some of these products and services have disrupted entire industries, changing them forever. We have seen this in transportation (Uber), in retail (Alibaba), and in media (Buzzfeed). These are just a few of the successful startups that have become household brands not only in our immediate region, but also globally.
But are business leaders too easily seduced by these stories of success? It is common knowledge — if sometimes selectively ignored — that the majority of startups fail. The Silicon Valley mantra of “fail fast, fail often” is testament to just how prevalent failure really is in this ecosystem.
“Fail fast, fail often” is regularly derided by old guard leadership opinion writers who argue that companies, startups included, simply cannot afford to fail. Indeed, established business with existing staff, customers and stakeholders cannot simply copy the behavior and practices of startups, and to fail for the sake of failing.
However, many commentators fail to acknowledge that the “fail fast” concept was borne from software development, where failure is a virtual given. It developed as part of a larger process management methodology known as Agile or Lean. These methodologies propose iterative, incremental methods of managing the design, build and engineering of projects.
Instead of focusing on the failure aspect, the emphasis should rather be on the second word — fast. Agile is actually about reducing delays, and picking up failure as early as possible and learning from this failure, rectifying the issue and continuing to move forward. In this sense, this methodology makes sense for project management and for business in general.
Most startups fail, but big established organisations cannot. Rather, businesses must widen their perspective and model themselves on the startup ecosystem. The real value of the startup world is actually the ecosystem in which they exist. As a whole, the startup ecosystem is set up to thrive, and they contain more than the startups alone.
These ecosystems comprise venture capital funds, providing not only investment dollars but also expertise and governance; universities contribute skilled people and emerging technologies; as well other organisations, both large and small, which are willing partners, investors and collaborators. But perhaps most importantly, the startup ecosystem also encourages innovation.
Established companies need to ensure that innovation is driving it forward, pushing it further. Rather than trying to forcefully squeeze into a startup mold, companies need to invest in producing the systemic conditions for innovation to flourish, creating the processes that encourage a collaborative spirit and open, progressive mindset within the organisation.
That means interaction and collaboration within teams and across teams, and a willingness toward partnering, combining the company’s unique capabilities or intellectual property with external parties to achieve greater goals.
Another equally important element to any startup ecosystem is its people. It is important for management to develop the “people pipeline”, create a desirable work environment, then identify and recruit the best talent and upskill existing employees. The BT Infinity Lab was developed with these objectives in mind. The program aims to nurture and encourage open innovation by engaging with startups and their founders. By working across teams and with external parties, BT aims to grow these startups, while also growing as a business itself.
Putting maximum effort into developing the traits of a start-up ecosystem will naturally nurture innovation opportunities.
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