What kills a grown company?
There is an article on the Harvard Business Review on venture back startup companies. The author claims that there are only two types of such companies:
http://blogs.hbr.org/cs/2013/04/there_are_only_two_types_of_ve.html
Companies are either diving into Brave New World or moving faster, better, and cheaper. Company founders need to justify roadmap by looking at their vision, culture, and resources. The assertion is exclusive and quick. On the VC side, this is true as VC only funds companies by this standard: is the company doing the next new, big thing or innovating current products, processes, etc? But on the entrepreneur standpoint, some times they aren't as aligned with VCs. At the beginning stage, the alignment can be tuned, tweaked, or enforced. As company grows quickly, the task become uneasy. This can be seen from larger companies.
When companies become larger, more work force in place, companies emphasize integrity, values, may be diversity, and many more. People create compartments to structure space. Unlike startups where clear rewarding system is ultimately driven by survival, larger corporation citizens are more keen on ladder climbing, which maps to rankings. A rung up or down doesn't immediately lead to survival crisis. In other words, all stake on the table is a rung up or down, not death. Somehow like a virtual money versus real money in investing practices. Investing with virtual money can never learn investing. Therefore employees aren't well aligned and focused.
Another perspective is blurry technical importance. Large companies often have debates on whether they should hire technical centric or administrative centric managers. This is the sign that the companies are getting sick. One VC once said that he only invested in companies that have strong technical DNA. The funding startups can get from his firm is anti-proportional to the number of MBAs in the team. MBAs did many case studies to develop processes as well as complexity of corporation politics.
On the other hand, few larger companies can go back to their startup days. HP tried, Intel tried, many will still try. People is still learning how to manage large population or network. Thus companies aren't killed by competitiveness but by themselves.
http://blogs.hbr.org/cs/2013/04/there_are_only_two_types_of_ve.html
Companies are either diving into Brave New World or moving faster, better, and cheaper. Company founders need to justify roadmap by looking at their vision, culture, and resources. The assertion is exclusive and quick. On the VC side, this is true as VC only funds companies by this standard: is the company doing the next new, big thing or innovating current products, processes, etc? But on the entrepreneur standpoint, some times they aren't as aligned with VCs. At the beginning stage, the alignment can be tuned, tweaked, or enforced. As company grows quickly, the task become uneasy. This can be seen from larger companies.
When companies become larger, more work force in place, companies emphasize integrity, values, may be diversity, and many more. People create compartments to structure space. Unlike startups where clear rewarding system is ultimately driven by survival, larger corporation citizens are more keen on ladder climbing, which maps to rankings. A rung up or down doesn't immediately lead to survival crisis. In other words, all stake on the table is a rung up or down, not death. Somehow like a virtual money versus real money in investing practices. Investing with virtual money can never learn investing. Therefore employees aren't well aligned and focused.
Another perspective is blurry technical importance. Large companies often have debates on whether they should hire technical centric or administrative centric managers. This is the sign that the companies are getting sick. One VC once said that he only invested in companies that have strong technical DNA. The funding startups can get from his firm is anti-proportional to the number of MBAs in the team. MBAs did many case studies to develop processes as well as complexity of corporation politics.
On the other hand, few larger companies can go back to their startup days. HP tried, Intel tried, many will still try. People is still learning how to manage large population or network. Thus companies aren't killed by competitiveness but by themselves.
posted by Intl.investment.services at
10:47 AM
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