From Start-Ups to End-Ups

03/01/2017 06:57 pm ET

Start-Up Fatigue

Maybe I’m showing my age but I’ve got a serious case of start-up fatigue. One more hackathon, incubator, accelerator, pitch contest, one more meetup group and I turn into an Edvard Munch scream. The start-up economy has changed the nature and future of work. It’s screwed up our values about work. It underplays the importance of persistent, well executed innovation in favor of half baked ideas shot in the dark as gladiator spectacle.

Those Who Can’t Teach

Like teachers, people are told “those who can’t do” work as paid employees at a company. In the start-up economy, working for a company rather than your own self, is seen as some sort of character (or anatomical) deficiency.

As someone who’s done both, multiple times, I find that, like classical painters turned abstract artists, a well-run mature company can give you the foundation (classical) you need to innovate (abstract). Many start-ups I know would do well if they had the structure of companies like Ford Motor, Intel, Disney or MasterCard. Creativity can flourish when you’re not spending half of your time selling your ideas to the highest bidder, for the quickest profit.

Resources and a secure infrastructure can help innovators foster faster. Tech companies like Amazon, Netflix and IBM are routinely featured on most lists of highly innovative companies becuase they provide a disciplined approach plus an ability to establish relationships outside of their expertise: healthcare and Hollywood to name a few.

Built to Sell

According to the Silicon Valley Bank (SVB), the majority of leaders of tech start-ups are fueled by one word: acquisition. Some 53% said they expected to be acquired, 16% said they expected to go public, 18% want to remain private. The question? How vested can you be in your product when it’s built with a “for sale” sign at birth? SVB, the grandfather of the start-up economy, in its recent survey on start-ups, paints a cautious picture tempered by the realism of the new political clime. Access to talent and other important public policy issues are high on the “what keeps them up at night” list for a startup. But healthcare costs, cybersecurity, corporate taxes and patent litigation— all better handled by in house legal staff— are also high on the list of start-up worries. An acquisition, rather than an IPO or becoming a long lasting company seems like the most prudent endgame for most.

Built to Scale

At their worst, start-ups are half baked ideas from the mind of an MBA with little attention paid to the fundamental structure for success. Incubators and accelerators egg them on with golden goose promises that “they could be the special one.” This is like the basing economy of a TV reality show.

In fairness, accelerators and incubators do set an important tone for getting an idea out the door and then reiterating until it's right. Fast Company’s recent article on innovation urges us not to ignore hackathons, incubators and accelerators. “These formats and processes, which have emerged out of tech culture over the past decade, offer a glimpse into the future of businesses—and only the foolhardy would ignore them… The list of companies that have come out of Y Combinator alone include Airbnb, Reddit, Stripe, Dropbox, Twitch, Cruise, and hundreds more.”

But nine out of ten start-ups don’t make it. The two most popular reasons cited: the market didn’t need their product or they ran out of cash. Both reasons might be tempered by having a mature company’s cash or understanding of market needs. CB Insights has a great list of start-ups that failed and why. It gets you wondering how many of them would have had better outcomes if they had more time to focus on the product and less time spent on “doing deals” that fell through or trying to structure management.

Let’s Hear It for Keep-Ups and End-Ups

What’s the opposite of a start-up? What can we learn from them? I’m thinking it’s time we use a little reverse logic and started thinking about rewarding long-time businesses that continually foster the spirit of innovation and adopt start-up mentalities to skunk works projects within their walls.

There’s a lot to be said for being able to innovate unencumbered by rent, office space and day to day management. I’m not sure we give enough credit to companies that allow the luxury of thinking like a start-up, but offer the experience of a well oiled organization.

I asked some industry friends for their thoughts on what the opposite of a start-up culture is. They coined names like “keep-ups” -- business that are constantly innovating to stay on top or “end-ups” -- companies you’d be thrilled to be part of for the rest of your working days. A start-up is more a mentality than a business model. “IBM,” said Doug Boling, now a Windows consultant, “was still a "start-up" into the 70s because TJ Watson Jr. was the embodiment of TJ Sr. and kept the company young.” Conversely, companies such as Apple who might throw out their start-up management can quickly become "old.” And yes, old can become young again, as in the very same Apple. It’s the visionary leader that keeps the company young.

“End-ups” are what Amanda Parkes, a fashion tech entrepreneur, calls them. “These companies embody a set of values not one single product.”

Maybe it’s time we have an end-up or keep-up competition shining the light on creative companies that continually get it right? Maybe the start-up scene has reached a tipping point.

Anyone out there brave enough to acknowledge that the start-up culture needs a makeover?

Robin Raskin is founder of Living in Digital Times (LIDT), a team of technophiles who bring together top experts and the latest innovations that intersect lifestyle and technology. LIDT produces conferences and expos at CES and throughout the year focusing on how technology enhances every aspect of our lives through the eyes of today’s digital consumer.

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