Archive for July, 2012

Go put your best foot forward, founder…!

July 10, 2012

Most often startup entrepreneurs wonder how big businesses get built even as they can’t get theirs past the gate.  My business brings me up close with several puzzled startup founders to whom I often relate this Forest analogy. Think of any business as an ecosystem, like a forest, and track the company’s growth from its small beginnings to large-scale maturity. In addition, the forest analogy gives us insight into the process of organizational renewal — a challenge that faces many big businesses even today.

The natural development of a forest, or forest succession begins in an open patch of land that provides equal access to sun and rain. Its initial colonizers are migrants, weeds, and wandering animals that spread seeds. These colonizers are the entrepreneurs of the ecosystem. They are attracted by the ready availability of small-scale resources and the absence of competition, a combination that enables everything to grow like crazy.

Creation requires destruction: Look for openings on disturbed ground — turbulent markets where information is scarce and navigation is unclear. What economists call market failures, entrepreneurs call opportunities.  This is what made me quit my job and start out on my own.

Never worry about the big businesses that look unbeatable. Look at the destructive close of a mature forest’s cycle to get a grip on this point. A forest fire ends the climax phase. The older tall trees, as they age, drop their lower branches on the ground and are also vulnerable to attack by bugs as they turn into standing firewood or the fuel. As the fuel builds and the forest becomes more tightly connected, fire becomes inevitable, culminating in conflagrations aided by parched land, dry grass and absence of fire tenders. Smug organizations have the weakest disaster management systems which a nimble startup can exploit to the hilt.

What if there is a forest with with great fire fighting systems…?  Many fledgling founders had asked me. My own analysis tells me forests need fire. Fire tests the system and breaks down the tall hierarchies (old trees) that monopolize the resources, recycling them into nutrients. Indeed, fire marks the completion of one cycle for the forest. It creates the open patches that attract the entrepreneurs. It makes way for variety to reenter the system, both in the form of the seeds and weeds and in the creation of multi-aged stands of the dominant species. Such an ecosystem is once again loosely connected because resources can flow through it in many ways. It is no longer vulnerable to being wiped out by a single event, and the perpetual cycle of forest succession begins again.

Go put your best foot forward.  Period.