Those of you who know me or who simply follow my various ramblings and musings through this blog will probably know I’ve been out there in the trenches for a while now. I first started back in 1998 as a “temporary” contractor with a new product division of Microsoft. The product was a giant beast of a creature we’d now call an “ecosystem” in today’s project speak parlance. It was aimed at small to medium sized businesses and incorporated elements of a new product called “Exchange” as well as elements of a soon to be deeply integrated MS Office suite. The product ended up shipping as Windows Small Business Server, but I bring it up because now because that was the first time I began hearing the phrase, “we’re really more like a startup. Of course it was all poppycock, and you can bet it will be poppycock as well when you hear some one else make the statement about any other company or group. The reason I can make this claim is companies or groups operating in a startup mode or state do not have to self-identify as a startup. The fact they have no money, customers, equipment, or support sort of does the talking for them. Working with a fixed budget on a project with no guarantee of success does not immediately equate your work to a startup. It simply means you’re working on an interesting project that could blow up in your face, but probably not. So why do so many companies, departments, and people self-identify with the “startup” some of us have actually done time with?
Unfortunately the startup company has a particular place of honor in the mythology of the software development and information technology industries. The startup ranks up there with the coder who’s arcane understanding of mathematical systems and processes departs a special knowledge rendering them superior to other humans. It’s actually only slightly below the conceit of computers (and software) running or controlling the world (see “brothers, Wachowski” for more on this). The myth of the startup is something along the lines of a small group of dedicated enthusiasts joining together in a quest to create something innovative and world changing. The enthusiasts are generally credited with enough foresight and altruism to justify little to no immediate financial security while pursuing their dreams. Certain versions of this myth have the enthusiasts eventually becoming rich(ish) but treating the monetary rewards as trivial, even losing them all with a smile on other companies and products.
So the primary aspects of a startup according to the myth are frugality, innovation, enthusiasm, egalitarianism, and camaraderie.
These are all laudable traits, but unfortunately they are nowhere near the ones truly defining a startup and its culture. The really unfortunate part of this problem is rooted in the general positive value assignments of all the traits. Because they’re essentially positive, a lot of groups, companies, departments, or teams like to call themselves “basically a startup” or “following a startup model.” I’ve actually talked to groups with multi-million dollar budgets, hundreds of active customer accounts, and offices in three continents who referred to themselves with all seriousness as “still essentially a startup company.” Of course no one who was actually at the company when it was in startup mode was still around to laugh in these people’s faces, so there was no one to correct them. That’s why I don’t really blame them for their mistaken belief in an archaic system. All I can do is educate and see if it sticks. I have to admit to a certain amount off self-interest in spreading this message. I’m getting tired of meeting with clients who think they’re a hare but are really a tortoise. It’s not a value judgement but it does make working them a tad easier if I don’t have to rub their tortoise feet for luck and continually admire their “fluffy” tortoise tails and “long” tortoise ears.
So what are the actual traits of a startup, or rather what are the traits of a startup that eventually succeeds? I’ve actually done a lot of research into this topic and I have some definite opinions … of course. I mean why else would I be writing a blog entry?
The actual traits of a startup are as follows:
- You have no customer base for your product(s)
- You have no defined process or workflow to improve
- You are always strapped for cash and equipment
- You may not have a company in six months
Out of these traits come a lot of the things normally lauded by the industry. Since startups have no real customer base, they must be flexible and agile enough to chase down markets as they evolve. This means today’s dominant technology or tool is tomorrow’s unused site license. This requirement for being able to quickly become an expert on technologies and frameworks is why startups are usually staffed with talented generalists rather than world renowned specialists. Successful startups won’t usually refuse to interview a candidate because they don’t have experience with “X” tool or “Y” platform. Instead they look for a pattern of rapid competence coupled with an intense desire for learning.
In order to survive past the next six months, a startup has to either take business away from an established company, create new opportunities, or attack opportunities the established companies are ignoring. This means they need to innovate beyond subtle improvements to what’s already being done. For a startup to be successful, they need to become dominant in their market which is why most of them attach small markets being ignored by “the big guys.” Because a startup will have little to no advance knowledge of their market, customers, or their needs the successful startup has to keep their processes and workflows as light as possible. Once the market starts to coalesce, the measurement and improvement can start as there will be an oracle against which you can measure success. Until then the startup runs the risk of entrenching behaviors counter to their actual market needs.
While startups always have seed money and angel investors and venture capital, the successful ones are invariably lean and hungry. Every minute spent working is another minute where money was siphoned out of the company funds, to greater or lesser degrees. Until the company achieves profitability (ie: customers paying you more money than you spend on a regular basis) the only thing a startup can do to keep running is attract more capital or stop spending money. There is no money for large development and test environments that must be maintained. The company cannot afford expensive tools and third party systems that already solved a few of the problems. Debts in quality and design cannot be paid by off-shoring work to someone else. Designs and solutions have to be determined, developed, and deployed as rapidly as possible to get money coming in as soon as possible. The constant drip of the money faucet naturally results in lean solutions with the bare minimum of design and coding that work on laughably under-powered systems. Because they cannot afford to spend months working out the “correct” solution, the startup comes up with “a” solution and lets the customer tell them if its correct or not.
Finally, and I can’t stress this enough, there is the constant fear everyone at your company won’t be around in a few months if you can’t get the money flow turned around from outward to inward. This fear of failure brings out a desire for daily excellence in a lot of people while bringing them together in a sense of common struggle. Since everyone is effected, the test analyst will usually be on a first name basis with the CFO after leading them through a bug bash session with beer and pizza. Every small victory is celebrated and every small setback is shared. No one can be suffered to simply come in, do their job, and leave because there are simply too few people around and too little time and money to allow luxuries otherwise.
It’s my assertion that if you’re missing any of those four items, you aren’t really “just like a startup.” You can be a small company where the CEO sits in an open cube like everyone else; but unless you’re scared spitless about next quarter’s earnings, chances are good the “open cube” policy is more of a PR exercise than a reality. You can talk about being “agile” and “innovative” but take a look at your hiring and interview process. Chances are very good its currently geared to attract world class specialists as your ideal candidates. These people are usually writing papers and speaking at conferences about their subjects, but are also usually about as agile in changing direction radically as an aircraft carrier.
But hey, its okay. It’s great to be a successful company with a dominant market position. I can guarantee you every startup out there wants to either become you or be noticed and acquired by you some day. The original staff may leave when that happens, but that’s okay too. They’ll usually have a larger bank account and bragging rights about what they built. You then have the hard task of building on success and creating innovation one small step at a time in a market now populated by a sea of wannabe imitators and conservative purchasing agents. You have hour own unique challenges and triumphs that should be celebrated.
So stop attempting to be something you ain’t and just be happy with yourself as who you are.