In the past 10 years startup culture has started to infiltrate the entire business landscape. It’s not just a side show, and many of the new commercial powerhouses haven’t had their 10th birthday yet. Of the startups successes we’ve seen the large majority live in the digital space, creating web platforms and apps which digitally augment our lives.
Because of this it’s easy to believe that their startup hacks, and new techniques for growth hacking and innovation – namely lean startup methodology – are only relevant to those creating digital output. Nothing could be further from the truth.
The emerging startup science is something all manner of organizations can benefit from. Old companies, young companies. Big companies, small companies. Digital denizens and even those making complex physical goods and hardware.
Clues in disruption
There are already a lot of clues in the disruption we’ve already seen. The first thing we need to remember is that many ‘software’ firms have already been disrupted. If the benefits available to startups are all about being digital, rather than lean and smart, then why are so many digital business being disrupted?
Microsoft, who we must remember seemed untouchable at one point, missed most of the innovation on the web, and the resulting financial upside. They too, were digital, but lost the ethic that got them there in the first instance. Google, which has only been a public company for 10 years now has a larger market capitalization than Microsoft. What this tells us is that being able to employ startup mentality isn’t about whether we live in a digital realm, but more about the attitude and culture of the organization. Its about a companies ability to think lean and to act like a startups after they’re big.
The benefits of startup methodology are available to any organization wise enough to embrace it. Startup methodology is more about the way we go to market, than what we actually sell in the market. So regardless if you make hardware, or run a factory or work for a company that was born in the industrial era it’s worth remembering this revolution is not exclusionary. Any organization can choose to join in – and gain the benefits from throwing out their industrial marketing playbook.
And while even digital organizations are being disrupted by startups, there are a number of ‘hardware’ based startups now gaining significant momentum through adopting the startup science. Step forward Tesla Motors.
While Tesla is clearly a company that people love to love, they have employed some very important startup methodologies to forge a position in probably the worlds most capital intensive and competitive industry – Auto manufacturing. Let’s look at some of the things Tesla did in order to get to market, and with real market feedback:
- They had a focused launch. One car model. One single product. The Tesla Roadster.
- They launched an imperfect car (namely km range, charging time) – but ensured the product benefit was clear: A fast all electric car.
- They launched with known limitations in their lithium ion battery technology – they knew it would get better, that they could iterate.
- They collaborated with ‘competition’ – used another cars shape & design the Lotus Elis in order to reduce development cost, and improve speed to market. Used an ‘existing platform’.
- They sold direct to customers & on-line – no cumbersome dealer network. Which was an anomaly for the auto sector – and even illegal in some US states.
A lot of the techniques Tesla used to get momentum are straight from the digital startup playbook. But they proved these concepts can be used in heavy manufacturing. Largely counter intuitive moves for the cumbersome auto industry. They proved that any industry can be disrupted by embracing startup doctrine and ultra focus. And it’s got them to a position where their market capitalization is already above $25B. It’s nearly half that of Ford ($61B) and almost half that of GM ($53B).
If there’s anything I’d love more mature organizations, industry and especially manufacturers to take from this post is that, they can benefit too. That all these emerging digital tools are available to anyone industry, not just the fortunate few, or those whose output is consumed via a screen.
In upcoming posts I’ll present a number of examples from the non digital realm (Local & International) which prove that all this startup science is not limited to screens.