Iconic brands hold a special place in our hearts: The department store our parents visited every year to buy our winter coat, for example, or the steakhouse where we spent every birthday.
These so-called ‘grandfathers’ of the corporate world are the antithesis of a startup. With their deep pockets and tried and tested practices, they operate much like a cargo ship on the ocean; they may change course for land masses, but are relatively unmoved by heavy swells.
But at a time when businesses are experiencing seismic shifts and consumer demands are being met by a growing list of global competitors, are there lessons that ‘big business’ can learn from their younger, agile and street-smart contemporaries?
The answer is yes. Here are five lessons Canadian corporations can learn from startups.
1. Diligence delivers. Startups can exploit stagnating markets by understanding exactly what customers are looking for and swiftly producing a product or service to serves them.
By consistently seeking real-time customer feedback, and carrying out constant market analysis, these companies are able to identify trends in their earliest stages. By understanding what a customer wants, versus what the current market is offering, these smaller technology companies can satisfy demand that their larger and better-funded competitors hadn’t even known existed.
2. The art of disruption. For any company looking to become a disruptive force, it’s essential they have a comprehensive and up-to-date understanding of their chosen market and the players within that segment. This is a lesson Blackberry had to learn the hard way in 2013. Their foray back into the smartphone market saw the company launch products with innovations that were minuscule relative to current offerings. There was little, if anything, that addressed customer need or created separation between existing competitors in the space.
Disruption and innovation are the lifeblood of the tech startup space. Without it, startups lose their unique advantage in a market and this quickly leads to a drying up of funding and eventually failure. There is no safety net available as with larger, more established businesses and therefore they will always look to pour every last drop of innovation into each phase of development.
3. Know the ‘why.’ Ask any startup why they’re building the product or service they’ve chosen and the likelihood is, you’re about to hear a long and detailed story. Creating, developing and growing a business is not for the fainthearted and therefore, startups are commonly run by passionate people who are clear in their motivations for doing what they do.
Big businesses tend to operate differently. With multi-tiered management making decisions to pacify trigger-happy shareholders, clarity of intention when it comes to initiating new products or services can suffer – just look at Bic cologne or Colgate frozen meals for proof.
4. Always competing. If disruption is how startups break into a marketplace, then competing against themselves to innovate they’ve created is how they stay in it. Even with successful products, the next step of a startup’s life should always be to develop a new and better product in order to retain their current users and bring in new ones.
When big business stops innovating and acts primarily to protect its position, it gives competitors the room to develop better solutions and set about eroding their market share. Startup entrepreneurs tend to be predisposed to fight tooth and nail for every scrap of growth and traction, and over time, in order to survive, more big businesses might be forced to do the same.
5. Think globally. Chalk it up to the naivete of youth, but many startups think the world is their oyster. In truth, within the technology startup space, many of the products and services being developed are accessible on widely spread, pervasive hardware systems, meaning startups aren’t penned in by location.
These companies are able to focus on defining their customers by type and not the border they operate within. Companies like GoPro, for example, aren’t focused on extreme sport enthusiasts within North America; instead, their focus is on developing products for every enthusiast, regardless of geography. With many startups’ instinctively pushing for growth well beyond their national borders, they’re successfully mining markets that many larger, more established companies wouldn’t think to enter.
Cameron Chell is the Co-founder and CEO of Business Instincts Group, a venture creation firm in Calgary that finances and builds high-tech startups.
To learn more about his work with sustainable startups you can visit www.CameronChell.com