Tuesday, September 06, 2011

Duh + Duh: Start Ups as Experimental Networks

Andy Hargadon's idea that building a start up is about building a network is one of those "duh" ideas. You read it, you say "yeah that makes sense"... yet, from then on, it changes the way you think about start ups.

Similarly, Steve Blank's advice is to think of the start up as an experiment to determine whether there are customers and a business model to effectively serve them. I don't know if he knows Bill Easterly, but I know he has a similar faith in "searchers." I do know that thinking of a start up as an experiment is  advice I heed on a daily basis. 

So, two retroactively "obvious" perspectives, which, if combined, get us to think of start ups as temporary associations tasked with experimenting, prototyping and building networks. These networks are built, then reinforced as weak bonds become stronger. Trust makes these synapses fire faster and more accurately.

I think this is why people are so interested in successful, serial entrepreneurs. They de-risk a start up somewhat, because they know it is about building a network, and they know the questions to ask as they start a search.The entrepreneur that has built successful networks has a head start- if they have done it well, they have existing relationships. What customer wouldn't want to give Tony Hsieh a try if he started another company? What investor wouldn't want in to a deal with an entrepreneur that had given them a good return? What community wouldn't want to have another start up from someone who had been involved in an earlier company? What supplier or distributor wouldn't want to be part of supply chain v2.0? And the cream of former employees often show up in the founding team as well, not wanting to miss out on another fun run.

Not a serial entrepreneur? As a founder, this approach also biases you toward a posture of humility, ambiguity and curiosity. It takes you out of "sell mode" and keeps you in "design/build" mode. Think: "I am building an experimental network, to see if there is a significant market, and a business model to address it efficiently and effectively."*

Spend more time on your business search than on your business plan. And let the search drive the network which drives the business model, which are then all described in the plan.
Note: I wrote this post in July, and it mysteriously showed up when I tried the new blogger interface this morning. So I hit "publish."
*Channeling Peter Drucker's super marvelous comment: "Efficiency is doing things right. Effectiveness is doing the right things." 

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