Are ‘hopeless’ startups our best hope for sustainable jobs?
A startup only has to take one person out of unemployment to make a net contribution to job growth. Instead of ‘Jobseekers Allowance’ why not ‘Business Model Seekers Allowance’?
Why not empower the unemployed to do the one thing which is still guaranteed to translate success into jobs which directly impact the domestic economy?
Because it is untried, the business model which constitutes the startup’s founding vision is inevitably much more likely to fail than that of their more established counterpart.
But unlike the consequences of a serious decline in demand for the goods and services of larger and older businesses, the startup is in a far better position to switch relatively painlessly to different products and markets.
Failure of a core business model is less likely to be an existential threat to a startup than to a larger business
Startups don’t need to be scalable to create large numbers of jobs, there just needs to be lots more startups.
It doesn’t matter to the economy as a whole if any one particular startup is going to be tomorrow’s next Apple, Google, Facebook, Microsoft or Intel, or whether they are going to be nothing more than a lifestyle business.
It doesn’t even matter if they fail. In fact, startup failure represents a valuable commodity.
Startup failures ultimately make the most important contributions to the body of entrepreneurial knowledge out there, because they contribute to the human experience-base which future successful startups will be drawing upon.
As a startup founder, your ‘teacher’ will probably not be someone delivering business studies lectures in front of a class, but instead it will a ‘mentor’ whose best advice to you will come from the painful lessons they learned from things which ‘looked like a good idea at the time’ when they tried them in their own startup, but didn’t work out.
The inescapable reality is that taking steps to facilitate the creation of much larger numbers of startups will inevitably create vastly more failures.
But those failures will not result in the same unfortunate things that we normally associate with corporate failure, such as vast layoffs and countless creditors facing financial ruin.
A startup founder confronted by the discouraging discovery that their initial vision is not commercially viable, is most likely (especially with the assistance of a more experienced mentor) to be in a position to seek out and find a different product or different customers before they have to shut down.
Even if they don’t, this ‘failure’ will increase the supply of potential startup mentors, which will ultimately create a base of more resilient startups.
If we are going to turn around a job market decimated by downsizing and the death of distance, we are going to need to increase our ‘entrepreneurial knowledge bank balance’.
We can measure that in terms of the numbers of potential mentors, i.e., those who have had their own startup experience and are keen to pass it on to those who are starting out on their own for the first time.
We don’t need ‘better startups’. We just need more startups, in order to create more potential mentors ‘forged in the fire’ of founding startups.
Failure makes startups better fast, because startups aren’t so big that the cost of their failure exceeds the benefits, and those benefits extend not just to the startup in question, but to other startups, through the mentoring process, and to the rest of us, as startups reduce the burden of generating tomorrow’s jobs.