Startups scare the daylights out of many execs from traditional businesses. Its common to hear them speak of their fear of some business currently being incubated in its CEO’s mother’s garage that one day will emerge and steal a large or lucrative slice of their business.
Why? Because it happens – Uber and Airbnb are cited so often as proof of this that they have become a conference cliche. But they are not alone, and the low barriers to entry into numerous markets for startups means there will be many more to come. There is always a margin to be taken somewhere, and a market to be disrupted in doing so.
What a lot of execs in traditional businesses fail to realise however is that all of the tools and processes that startups wield with such effectiveness, such as lean and agile product development methodologies, are also available to them. All they need to do is master them.
Of course mastery takes time, and these tools can be harder to wield in an environment that already includes significant legacy tools and processes. But that shouldn’t stop them from trying. The transformation taking place within organisations such as Telstra and the Commonwealth Bank is proof of that, with their new systems and processes owing much to methods refined in the startup sector. And if it can work in those organisations, there is no reason that it can’t work in any other, given the right stimulous.
I’ve been fascinated with startups for most of the 20 or so years that I’ve been writing. My first book, Innovation and Emerging Markets, published way back in 2004, was all about Australia’s indigenous startup talent and their path to death or glory (mostly death, unfortunately). What I know for certain is that we need both more startups, and startup-enabled traditional businesses, if this country is to maintain its economic status.