THE BLOG

How Every Business Can Benefit by Thinking Like a Start-Up

02/05/2015 02:39 pm ET | Updated Apr 07, 2015
Cultura/Marcel Weber via Getty Images

I had the great pleasure of running three small start-ups in the first half of my career, and have spent the second half of my career (so far) in large corporations. Many people say I have run my career backwards, that the typical pattern is to learn your chops at the big companies before striking out on your own. Well, I have recently heard that the trend is moving my direction and that, increasingly, students right out of school are starting up new businesses, and later moving to larger firms. I actually thinks this make sense, since you learn skills and attitudes in a start-up that are invaluable to you in a larger firm. Start-ups are often envied for their sense of freedom and possibility, their focus on innovation, tight esprit de corps, and hip cultures.

So what is it about a start-up that leads to those admirable characteristics? I believe it is fundamentally two things: newness and smallness. A start-up by definition came into being recently, its newness means it doesn't have expectations of what it already is, where it came from, and so a sense of endless possibility is natural in a start-up.

I think of the smallness element this way: you can easily see the edges. Your company is like a group of people (because business is always all about the people) inside a nice picket white fence. Outside the fence is the rest of the world: customers, competitors, economic forces, etc. Because you can see the fence, in a start-up your sense of the business is much more in focus. You feel that outside world right there and you are engaged with it all the time. People think of start-ups as being super focused on their products, but in my experience they are super focused on their business, and people who work in start-ups are likely going to become real businesspeople. It's the closeness of the edge, of the outside world, that does it.

You can also see all of your colleagues. You are a small team, you see everyone, and thus you have a close-knit culture and sense of common destiny. That sense of common destiny instinctively leads to shared accountability. That drives effective teamwork and deep passion. Lastly, as a small company, you are highly constrained. You just don't have endless resources. Again: you can see the edges clearly. And that constraint is in fact the mother of innovation -- you need creative solutions to get things done without a lot of investment. You have to be agile or you won't make it.

In a big company, you can easily lose sight of the edges. It can feel like resources are boundless, like you are lost in a huge anonymous crowd instead of part of a small familiar team. You can work for years with no direct sense of the customer or the competition. In a big company, the sheer volume of activity requires more organization and process to prevent chaos, but that very organization and process can get people operating in their own little boxes, with little to no sense of shared accountability.

So ... what can you do, in a big company, to retain the good aspects of a start-up? Like most things, it's all in our heads, and by keeping the right attitude -- the right culture -- you can hang onto that start-up feeling.

Focus relentlessly on the customer -- Be obsessed with delighting customers. And not just abstract customers, real actual customers. Spend time with them if you can. If you can't, research them, immerse yourself in their reality, their needs. I believe that the greatest source of truth you can have in business is sitting face to face with a customer.

Foster a shared sense of accountability -- In all of my start-ups I had this incredible feeling when the team would sit around the table to figure out what we were doing. There was no sense of "well this is my job, and that is your job." People did what needed to get done. It was much more like "Hey let's do X. I'll go run with the Y part of it. You ok to pick the Z part?" Super collaborative. All in it together, and knowing that we all succeeded or all failed.

Embrace constraint and be frugal! -- First off, realize that every company has constraint. Just because the edge is so far out you can't see it, doesn't mean it isn't there. Know that resources are finite, be OK with that, and act frugally. Let the constraint be a catalyst for invention, for innovation. I liken it to writing Haiku poetry -- the strict structure of the form actually unleashes the creativity (and frankly can be easier to get started with than a completely blank page!). Prioritize ruthlessly. You can't do everything. Be OK with that. What moves the needle the absolute most? Do that!

Your company may not be a start-up. It may be neither new nor small. But, as big and mature as you might be, you could still benefit from thinking like a start-up.