Dragging small traditional businesses into the startup innovation ecosystem

Small traditional businesses? They’re already ‘inside’ the startup world, aren’t they? No. They typically know nothing about such things as Lean Startup, Startup Weekend or Y Combinator, and even when they do, they think it has nothing to do with them. Are they right?

No, they’re utterly wrong.

a d v e r t i s e m e n t

Is your startup accelerator in trouble?

  • is the whole thing starting to look like a ‘one hit wonder’?
  • were the applicants below expectations?
  • are you feeling out of your depth?
  • is the schedule beginning to look unrealistic?
  • are you beginning to feel that you ‘went native’ with the founders’ optimism?

You’re not alone

You need to talk to us

We’ve been studying startup accelerators

It turns out these problems, and a whole lot more, affect all accelerators in their early stages

They can all be put right

Read about how we can help

Small traditional businesses are often the first to complain about the state of the business world, claiming that the market almost unfailingly tends to favour their gargantuan counterparts, who can effortlessly deploy enormous purchasing power and leave the hapless small trader perpetually struggling for survival.

But have you noticed how innovative startups never have these kinds of issues on their agenda?

That’s not just because innovative startups have ambitions to become big operations themselves.

It’s usually also because of the typical innovative startup’s ignorance and inexperience.

And to some extent that’s a good thing.

Innovative startups benefit tremendously from their own naivety, because it frees them to try new kinds of things that nobody has ever tried to do before and to try to do old things in ways that nobody who does them for a living would recognise.

Innovative startups are inevitably, by definition. the very antithesis of traditional businesses, instinctively opposed to ‘received wisdom’ on just about everything.

Or at least, so the theory goes.

But that particular theory is absolutely wrong.

It turns out that when the irresistible force of ‘innovation-conducive ignorance’ meets the immovable object of traditional business management experience, matter does not necessarily cancel out anti-matter.

Yes, an impenetrable black hole in space can result if the interaction between the two opposing forces is based upon giving up control to the impulses and inclinations of the other side.

If a traditional business starts trying to manage an innovative startup, the results could get pretty ugly (interminable personality clashes, disastrous curbs on innovation) in much the same way that chaos would also almost certainly ensue in most traditional businesses if they suddenly became as unashamedly impetuous and risk-embracing as the kind of innovative startup whose sole qualification in entrepreneurship was the iPhone app they wrote last week.

But control is not the only way that traditional businesses and innovative startups can interact.

They both have valuable resources that they can offer one another.

For the innovative fledgling entrepreneur, despite their understandable reservations about the crusty traditional mentality of such pillars of small business as the long-established independent retailer or small factory owner, they soon begin to realise that there are aspects of running a business that have nothing to do with innovation, no matter how revolutionary their business model happens to be.

Things like accounting and administration, negotiating deals with suppliers, dealing with the local authorities and other basic practical things, where the traditional long-standing business will have the very thing which the innovative startup needs for its survival: experience.

What the innovative startup needs from the traditional small business is advice and guidance on everything other than innovation.

But there’s also something that the traditional business needs from the innovator: a knowledge of the things that most innovative startups tend to know like the back of their hand: how to optimise a website for ecommerce, how to do search engine optimisation, how to use social media as well as mobile and location-based services for promotion of any product or service, no matter how traditional.

Everywhere on earth (even in Silicon Valley) there are many more traditional small businesses than there are innovative startups, a fact which points towards a solution to a widely recognised serious problem for those interested in ‘startup acceleration’, where efforts are being made to nurture innovative startups.

That problem is ‘a shortage of startup mentors’.

Startup mentors are a resource which every startup accelerator includes in its program.

The mentors are there to address the inevitable ‘experience shortfall’ endemic among the (typically young) teams of hopeful entrepreneurs, each of which are usually vying for some sort of prize offered by the accelerator scheme, but more importantly are hoping to attract investment (from a business angel or VC) in their startup .

Because the mentors are likely to predominantly include prospective investors (business angels and venture capital financiers scouting for promising startups to invest in) the time and availability that they have available to any one startup on the accelerator scheme is likely to be limited.

The theory is that their specialist knowledge of entrepreneurship makes these types of seasoned professional uniquely suited to the role of innovation mentor.

That’s another theory that is also completely wrong.

Whilst it’s undeniable that those with investment skills and interests have experience which is of essential value to innovative startups, they will be the first to admit that when they initially embark upon the mentoring role, they often don’t know enough about what the startup founders are talking about to offer anything else but encouragement and moral support.

What the ‘job’ of innovation startup mentoring tends to involve, is mutual experience sharing, as the two different parties, often coming from completely different backgrounds, gradually acclimatise themselves to enough of the other side’s culture for the mentor to be able to offer valuable insights into the problems that the startup is likely to encounter.

These ‘acclimatisation’ and ‘experience sharing’ aspects of innovation mentoring mean that it’s more than possible that the types of professionals currently deployed as mentors to innovative startups in startup acceleration schemes are not ‘uniquely suited’ to this role.

It looks as if anyone who combines experience in successfully running a small business with enough patience and available time (as well as a need to get help with such things as the online promotion of their business) would offer the opportunity to provide outstanding service as a mentor to innovative startups, whether they are in an accelerator scheme or not.

So it turns out that the enormous number of traditional small businesses out there could ultimately prove to be the most important resource for innovation: the solution to the innovative startup mentor shortage.

And in the process of successfully reaching out to this previously neglected fountain of entrepreneurial experience, the prospect exists for an economy also boosted by the fact that a myriad of laggardly adopters of new technology will suddenly be introduced (and not dragged kicking and screaming) to new levels of productivity by having their online presence upgraded through the assistance of startup entrepreneurs who are only too willing to exchange their technical skills, gleaned from the world of innovation, for the business management capabilities they previously associated with ‘dinosaurs’.