Startup Renaissance: How startups are shaping the 21st-century business landscape
Let me start with a question, Why biggest companies in the world are tech companies? Except for one state-owned oil company, all of the top 10 largest companies on the planet are tech companies.
Yet they don’t have the largest revenues in the world, neither they have the biggest number of employees. Founders of most of them are college dropouts, and most of their assets are virtual.
So what makes them so valuable? Because they’re growing at an unbelievable speed. Why are they growing so fast? What makes them “fast”?
In my recent TEDx talk, I talked about how startups are winning over old-school enterprises. There are only 3 patterns that we see in every successful tech startup that is completely different from other businesses. You can continue reading or watch the talk here:
Let me give you an example: If my mom decides to open an online shop for her pastries, she can do it in one day!
She can have a beautiful online store with all her products and their images up and running. She can even connect it to her bank account, all in less than 1 hour. She doesn’t even need a computer. She can do it all on her phone. This was unimaginable only a few years ago.
The internet was born only 30 years ago; Now, we can’t imagine a single day of our life without it.
Do you know what an email inbox looked like back then? Like this:
In only 3 decades, we went from ugly text-based emails all the way to having art that is made by Artificial Intelligence and praised by real artists. This is a real art piece made by a machine:
How’s this possible? Why IT industry is changing so fast when other industries barely change in a decade or so? And I’m not just talking about old businesses, I’m talking about even the most high-tech industries like healthcare, nanotechnologies, and biotechnologies.
A shining example of inefficiency is this:
Even now, after more than two years after a global pandemic, we have around a 20% error rate in the results of covid tests.
This shows how “slow” even the healthcare industry is.
Changes in even the most innovative and well-funded industries are just too slow compared to the IT industry. Could you even compare today’s online services we all enjoy to what we had even 10 years ago? Could we say the same amount of progress has happened in any other product?
Here are 3 patterns that we see in every successful tech startup that is completely different from other businesses:
1. The way we learn
A few years ago, I was teaching a course at a university. A professor there once said to me, “Most of my students fail my class.”
I thought to myself, that’s a very weird thing to be proud of. It’s as if a doctor proudly announces, “Most of my patients die.”
You see, this, right here, is arguably the biggest problem we have in the world today! Our education doesn’t seem to have the right goals by design.
Startups are not dependent on traditional higher education or universities at all, which shows how inefficient higher education can be today.
Universities were born to be a place of education, but they’ve had lost their ways a long time ago. Right now, they have two functions:
1. Networking: This is the main reason, for example, Harvard or Oxford are so popular. If you get in, your classmates are future leaders of different industries, c-level executives of big corporations, politicians, lawyers, and basically every good connection that someone can dream of having.
Harvard & Oxford don’t have the best educational material or best professors in the world, but they are an “exclusive club.”
2. Giving you more education than you need: Just like any business, universities are designed to “upsell” their customers, the student.
This upsell can be in the form of pushing students to go for higher degrees or by providing courses that you don’t need, or curriculums that are just vague enough to cover everything.
Everyone should ask themselves, how much did you learn about your career in 4 years at your university? How much did you learn in the first 6 months at your first job?
How many of you feel that the majority of the stuff that you learned in 12–20 years of school was irrelevant to real life and that you will never use it again?
You can’t find a single company in the Fortune 500 technology company list that hires engineers based on their degrees, certificates, or universities. Most of the time, they won’t even ask for your degrees!
Startups value “experience” and “results” much more than someone’s degrees. They want to see action, not a certificate that shows someone knows something “in theory.”
Learn by doing
Startups thrived by basing education on “learn by doing”. This can disrupt education in all industries.
“For the things we have to learn before we can do them, we learn by doing them.”
― Aristotle
When someone wants to learn to code, they don’t need to go to a university or even any class. There are thousands of online services that help anyone learn how to code, and that’s just the beginning.
From the first day that someone starts to learn to code, they can start building “real” projects. For example, they can create their own website, and in the process of building it, they learn more and more. That’s how education was for thousands of years.
Some might say this solution is unique for software development and other fields can not have an education system like this, but is that really the case?
My mother learned how to open her online shop with just a couple of video tutorials on Youtube. After that, she learned the basics of having an e-commerce business, how to promote her pastries, what kind of photos would sell better, and everything else little by little, which made her online shop bigger and bigger.
What you learn is always greater than what you know.
Or let’s take “marketing” for example. Will you hire someone with lots of degrees in marketing, who read hundreds of books about marketing, with zero real-life experience? Or do you prefer to hire someone with no degrees and no formal education but with 5 years of experience in high-performing teams?
Education in every industry should start with “doing”.
2. The way we work
Have you ever asked yourself why we should work 8 hours a day? Why not 9 or 7? Why are we even measuring “work” with hours? How does that make sense?
Startups measure the amount of work someone has done by their results and impact alone. Multi-billion dollar companies have been made in less time with far fewer lines of code than their competitors. They had just a handful of team members rather than thousands. The only thing that matters is the impact.
Take a good look at Instagram or Telegram for example. They were less than 50 employees when they each hit the 1 Billion dollar valuation! Because people loved them, used them, and a “community” was built around them. It doesn’t matter how big the team is, who’s behind it, or how big is the marketing budget. Only the outcome matter.
The outcome is democratic. If people love something, you don’t need legions of sales executives and fancy branches to convince them to become your customers. They will line up to participate in your “vision.”
Outside the box
Another pattern is that we love the startup mindset, not the corporate mindset. Everything is up to be challenged.
Startups don’t believe in any “status quo.” We’re always in favor of thinking outside the box, in favor of thinking differently. There is no right technology or approach. Every day, technologies, approaches, and practices change, without clinging to old ways.
Status quo, you know, is Latin for ‘the mess we’re in’.
- Ronald Reagan
Everything from the core of the business and product to its surface is open to challenge. If you don’t challenge your own business, someone else will.
If something is not working, it should change as fast as possible. If something is working, now it's time to see what should change to make it better. There are no constants in any business anymore. This is the mindset of disrupters. Disruption is celebrated in startups, not feared.
Take a look at Google. Google encourages every employee to spend 20% of their time not doing the company’s projects but working on their own ideas; their own projects. If their ideas show promise, Google gives them resources to make them successful. That’s how Gmail was born. That’s how Adsence was born.
I know it’s uncomfortable to challenge the status quo, but it’s the necessary step before evolving into the next step. Corporations that forget it, become eager to preserve their position, and that’s the beginning of their downfall.
Sooner or later, someone will challenge everything that your business deemed to be “too big to change” and they will change it, and take your place in the market.
Nokia was a 150 years old company. They changed the telecom landscape, they were king of cell phones for decades, but the moment they stopped innovating, they were finished.
This is the final and most important pattern, and it’s born as the result of the other lessons mentioned here:
3. The way we collaborate
Startups believe in the idea of not inventing the wheel! We should use what we have to build what can be faster & better.
The idea of open source, contributing to each others’ work, and creating real “crowdsourced” products are all born out of this mindset.
This enabled us to enjoy incredible software that was made by thousands of developers at the same time. They never worked with each other, never saw each other, but they created something together. This kind of collaboration cannot be found in any other industry.
The browser that you’re using to read this is most likely built on top of an open-sourced project called Chromium, which itself is the child of another open-sourced project by Apple called Webkit. 40% of the website you see every day are made by another open-sourced project called WordPress. Almost all programming languages in the world are open-source as well.
It’s not only software, the idea of open source and crowdsourcing is bigger than software development. The biggest encyclopedia in the world is Wikipedia, in which all its content is crowdsourced by millions of people from all over the world.
Crowdsourcing believes in something greater than the business itself: I made it this far; now take it and move it further. Instead of competing, we can add value to each others’ work.
Imagine if healthcare and pharmaceutical companies were open-source. It would’ve taken them a few weeks to create reliable tests and medicines instead of years, at a fraction of the cost to the public.
Let’s see an example, it will cost, on average, 2.6 Billion dollars (with a B!) to develop a typical new drug, but recently new companies are developing open-source drugs for under 50,000$! That means they saved 99.999919% of the cost.
Today, it’s not about creating the next successful company or the next top-selling product. Today’s top businesses are the ones that can create the best platform for collaboration.
Your business is not a business anymore, it’s a platform for others to generate value with your help. That’s a business that cannot fail.
That’s the main difference between Walmart and Amazon. Walmart is a business, and Amazon and Shopify are platforms for growth.
Conclusion
As you can see, all of these points that I mentioned are not specific at all to tech startups. They can be applied in each and every business. The best thing is that they’re deeply entangled with each other. You can’t have one without the others.
Right now, startups are “borrowing” the best part of other industries to create fast-growing platforms in each one of them. It’s time to take a page from this playbook and create the next generation of businesses and create next generation of industries.
The first step to starting this movement is to embrace the startup mindset in ourselves. To ask ourselves, where do I see any waste, any inefficiency? How can I solve it? Who should collaborate with so our vision can happen? And learn that solution by doing it.
