‘Startup’ was popularised during the dot.com era to denote new businesses with high ambition, innovativeness, scalability and growth. Although the term is more readily associated with emerging tech companies in Silicon Valley, it is now an economy wide phenomenon, redefining the customer experience and the employment landscape across industries.
So it goes that the appetite for founding or joining a startup is also increasing. Harvard Business School’s managing director of career and professional development, Kristen Fitzpatrick predicted the majority of Harvard first years spent their summers with a startup over and above the likes of McKinsey, Bain, and Google. Though Brian de Haaff (3 time CEO and former first-time startup founder) warns startups limit personal growth opportunities, something he believes the ‘big’ firms offer in spades.
Couple these trends with new government strategies and regulation to support an entrepreneurial economy, and some might argue it has never been easier for start-ups.
The Australian enterprise software group, Atlassian, is one such ‘unicorn’ success story. Atlassian was founded in 2002 by two entrepreneurs who met whilst studying at university, financing the startup on a credit card with a $10,000 limit. Their list of clients now include NASA, eBay, and Twitter, and in September, details of a long-awaited listing on the US stock exchange started to firm up, in what would be the biggest ever IPO for an Australian technology business, with an estimated valuation of $4.3 billion. However the odds of success are often stacked against startups as research by Harvard Business School’s Shikhar Ghosh shows, 75% fail.
Yet we also know employment growth in the 21st century will need to come from new ventures as the forces of disruption, globalisation, and regulation continue buffeting the global economy, industries, and jobs. Fortunately, startups have adapted. The lean startup movement proffers failing fast and continual learning.These strategies favour experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development.
Beyond continuing our focus on fostering an environment that supports the growth of an innovative economy and startups, what can we learn from those who are succeeding?
Atlassian founders recommend startup founders:
- Pursue a clear vision – focus on the type of company they want to be;
- Understand the importance of having a co-founder/ partner;
- Be strategic about scaling (a common pitfall for startups) – Atlassian remained lean before finally accepting $60 million from venture capitalisits Accel Partners in 2010, the largest investment in a software company the US venture fund has seen during that time;
- Fight for talent – “We do what it takes to attract, nurture and retain those incredibly talented people,” said Cannon-Brookes;
- Build a great work culture - regular team-building days e.g. quiz nights, mini-golf and sumo-wrestling, an open door policy, and the founders wander the floor; and
- Stay competitive - “We are passionate and dedicated to improving the Australian industry, it’s a huge priority for us as a company… We spend a huge amount of time on that and it’s an essential part of our company.”
I was fortunate to have the opportunity recently to interview another Start-Up Founder & CEO, (and friend) Alex Benjamin who launched the online marketplace lending platform ‘Lendful’ in Canada earlier this year. Alex has integrated many of the principles of lean startups including failing fast and continuous learning. He offered insights as to why the shift, his experiences to date, and tips for others considering a similar move.
- What inspired you to leave a large corporate for a startup?
"I strongly believed ‘Peer-to-Peer’/‘Marketplace’ lending would dramatically change the way borrowers and investors interacted with one another online. Having seen the success of US lending marketplaces Lending Club and Prosper, I believed there was a huge opportunity on the US’ doorstep in Canada. I had considered an MBA but realized if I could setup my own business, I could apply finance, marketing theory, HR, risk and operations for example, to real life situations and be better for the experience. I also held a strong desire to build something and to feel professionally fulfilled (even if that meant forgoing a bigger salary in the short term). Paulo Coelho’s book, ‘The Alchemist’ also helped me realise that it's really important to challenge oneself through life’s journey."
- What prompted your move offshore?
"I felt I wanted to work in a highly innovative part of the world, where I could work alongside entrepreneurs who had made it, but also failed it - the objective being to learn as much as possible. I’m not suggesting that Melbourne .doesn’t have these qualities, but comparatively, the west coast of North America is laden with successful businesses and people who have harnessed a huge population and made something significant. There are many entrepreneurs scattered from Vancouver, through Seattle, down to southern California who are also willing to get involved and help. Vancouver is a unique city in that it has a rapidly growing ‘FinTech’ scene along with a Venture Capital community which has helped get our business up and running."
- What do you believe to be the critical skills of an entrepreneur?
"A couple of skills and qualities come to mind.Tenacity; the ability to keep going when it gets tough. From my experience, in the early days, you’ve got to be the ‘momentum-guy’. To me, that means you’ve got to keep pushing many different jobs along at once and be able to handle some setbacks in the morning, combined with some successes in the afternoon. Being objective throughout. ‘What does our company need; what are our immediate concerns and are we still on-track to achieve our long-term goals?’
The other thing to remember is sometimes you just have to take time out; go for that swim, do that 5 minute meditation, or sleep on the big decisions. 9 times out of 10, the problem looks different with some reflection."
- What abilities have you developed along the way?
"I'm always learning and being challenged to adopt new ways of thinking. One example, in the past I would sometimes come to a problem and offer a solution that would be inherently biased with personal preference; ie 'people just wouldn't buy that or will behave like this...' That attitude can be fatal to business and so I have focused my efforts on collating good data, understanding what customers want / need and then going about whether I can build demand."
- Who has been a mentor to you during this career change?
"At times it can be a roller-coaster ride, so when it’s challenging, you have to know when to ask for help. I find having smart and active investors, along with a strong advisory board - especially at the start - to be incredibly helpful in working through business challenges. The 3 general partners of Stanley Park Ventures are unquestionably some of the most impressive thinkers and strategists that I’ve worked with so far in my career; Mike Benna, Joshua Bixby and Jonathan Bixby."
- What other tips would you offer to others considering starting their own business?
"Be courageous. Be brave. Have a thick skin and step out of your comfort zone.
Having said that, do your research, de-risk your opportunity with many conversations with people who work and have worked in the field you want to go into. Most importantly, you want to have the determination, focus and strength to keep pushing forward."
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