What’s the real point of startups?

Photo by Dimitris Papazimorous via flickr.com

Photo by Dimitris Papazimorous via flickr.com

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I’ve been an admirer of Steve Blank for a long time and always liked and quoted his definition of a startup as “an organisation in search of a scaleable business model.” But I’ve started having a nagging doubt lately that this is not the right definition or the right focus.

I’ve been an admirer of Steve Blank for a long time and always liked and quoted his definition of a startup as “an organisation in search of a scaleable business model.” But I’ve started having a nagging doubt lately that this is not the right definition or the right focus.

 

I’m not doubting the undeniable fact that many startups are indeed organisations, nor that their purpose is to find a scaleable business model. I’ve just got two major problems with this definition: it’s too narrow, and the focus is at the wrong level.

 

We have massive unemployment at the moment. And before we had massive unemployment, we had massive underemployment because people were in jobs that underwhelmed them–as many still are. There are lots of reasons for this, but a major contributing factor is the lingering 20th century belief in ‘the organisation’ and ‘the job’ as the primary vehicle for economic contribution and sustenance. The problem is that there are a lot of signs that those jobs are not ever coming back. It strikes me that creating your own set of projects that feed you (in every sense of the word) is a much better way to go.

 

Now, I know there is a generation that thinks ‘getting funded is the new getting signed’. And that’s great in many ways insofar as it does inspire people to craft their own future. But it still creates a limited view of what entrepreneurship is about. It perpetuates the idea that it’s about hitting a home run and becoming a star. It perpetuates the idea that entrepreneurship is about creating companies, and not just any companies, but big investor backed ones. That’s counterproductive because it ends up putting off a lot of people who don’t see themselves as ‘star’ material or are uncomfortable with the perceived risk. I suspect it’s probably even counterproductive to building an ecosystem that creates those home runs.

 

I went to a great talk this Sunday by Jonah Lehrer which helped me crystallize my thinking. His new book ‘Imagine’ is about creativity and genius, but what he said applies to entrepreneurship. He pointed out that being creative or a ‘genius’ is not about having unusual talent or IQ, it’s about grit or persistence. The interesting thing is that he didn’t just describe grit in terms of moral character as people usually do. It is about persistence, but it’s mostly about finding the right goal. What’s the right goal? It’s the one that doesn’t get old, the one that keeps you motivated, because it’s the one that fits you. And everyone can be creative, as long as they are working on a value proposition which addresses an area that fits them.

 

Lehrer also quoted Geoffrey West’s comparison of cities with companies. The modern company (a.k.a “the scaleable business model”) has an average lifespan of only forty-five years, where as cities have survived hurricanes, fires–even nuclear bombs. Cities survive and thrive because of their ability to stimulate the creative results of serendipity. Or, from a complexity point of view, cities are the best breeding grounds for the emergent creativity which results from a diversity of individuals connecting with each other to build a series of creative projects. These are also ‘startups’. But they are the combination of new projects, restaurants, shops, festivals, etc. and routines which make up the never ending evolution of neighbourhoods and cities. And they are created by individuals making up their lives as they go along on a daily basis, bumping up and being influenced by others’ efforts to do the same. That’s the organisational model we need to imitate.

 

So a ‘startup’ is a search like Steve Blank has suggested, but I would suggest we need to redefine a startup as individuals in search of viable economic, social, and cultural niches that they can build with their neighbours. The more we can get everyone to see that and learn how to get better at it together, the more likely we will have successful enterprises of all types and sizes–including the rock star ones.