We attended the first meeting last week of a group with a focus on lean startup methodologies, and I heard someone share an observation that I have heard several times over the past few months: "Startup businesses are not small versions of big businesses." Despite the fact that given a little thought, this statement should be obvious, and that others in the business community have already posted blogs about this, I still find that many continue to approach running a small, young company with the same management styles, market strategies, business planning and all the rest that would be performed for a larger, older company. It reminds me of my coursework in elementary education when we learned how children used to be thought of as smaller versions of adults and how long it took educators and scientists to show this is not true and to change curriculum accordingly.
As Eric Ries states early in his book, The Lean Startup, "The tremendous success of general management over the last century has provided unprecedented material abundance, but those management principles are ill suited to handle the chaos and uncertainty that startups must face." He does not advocate removing all management and simply winging it but instead shows principles better suited to startup companies and provides plenty of case studies, including a few with his own companies, to back up his methodologies. I agree with him. I have worked in corporations and companies of various sizes and in various stages, and I have seen firsthand that different management techniques are needed. This does not mean that everything I have learned about business in school and at my work in larger companies is of no use to me, but I realize that I cannot directly apply what I acquired there to similar situations in the startup companies where I work now.
For example, I worked with the accounting and finance team in one company and calculated the revenue and expense forecast each month based on the sales and cost drivers. In the startup companies, we're still ramping up our sales and trying to figure out the cost drivers. I could attempt to forecast the revenue and expenses each month for the startup companies, but my methods for doing this would be different from those I would employ for the more established company, and few would expect my forecasts for the startup companies to be consistently accurate as they would for the other. We have a lot of testing and experimenting to do in the startup companies that was no longer needed in the work I was doing in the more established company.
I do not mean to say that no work in larger businesses is ever like that of a startup company. I have had positions in larger companies with a more entrepreneurial flair, but these were when I was leading a new team that was going to maintain a new business system, or forming a team that was interested in expanding our department's responsibilities, or similar work situations involving both new personnel and new processes or systems. In those instances, I experienced growth and chaos similar to that of a startup business but in a more controlled and constrained environment and with greater resources. Thinking about those times, and realizing the startup companies in which I work currently are going through these adventures constantly, helps me better understand how I need to tailor my management principles.
I work in small, startup companies, and these are not miniature versions of big companies so I cannot use the same management techniques that I have used in the larger companies. At least not yet.