Startup Stagnation and The Innovator's Dilemma

Reading Startup Stagnation led me to Steve Jobs solved The Innovator's Dilemma which both made me think about 'the trouble with companies'. It always seems to be the same thing: a company starts off, it innovates, creates a great product and all goes swimmingly. As it gets more mature the bean counters come in and (justifiably) focus on making a profit. After a while you start thinking that something is going wrong. Creating new products becomes a painful process where it used to be joyful. The company starts valueing sales staff over technical staff. You start overhearing conversations with the old-timers who were there at the beginning, "you should have been here 4 years ago, it was amazing, everyone pulled in the same direction, it was fun, and we were great". New competitors start bringing out new products faster than you. The company loses sight of what made it great in the first place - great, innovative products.

The recent answer to the problem is startups, but as the Startup Stagnation article points out this is normally funded by venture capitalists looking (justifiably) to make a profit, so you may ultimately end up in the same situation.

Maybe this is related to the economic arguments about pursuing constant growth. Maybe the focus on making profit is actually what spoils the company.

Now, I know that a company's purpose is to make money for shareholders, and i've seen plenty of examples where customers are treated as an annoyance rather than the reason to create the product. But, think to yourself, have you seen those symptoms in your own organisation? I bet you have….What's the point on purely chasing profit if it ultimately ends in destroying the company? There won't be any company left to give profits to the shareholders….Startups are not the only answer, larger companies can regain their senses (like Apple did) but it will be a painful process. The popularity of startups is that it is easier to start from scratch than mend what you already have.

Anyway…rant, rant, rant…if you don't like something, try to do something about it. Focus on what you can change and do it. Try to make insanely cool products despite the organisational drag or create a startup and take care not to lose sight of what makes you great.

"We have to have a faith in making something that goes beyond numbers and that creates genuine delight, and if we manage to do that, if we create something truly valuable and important, the profit will come as a secondary output" - Cennydd Bowles, "Things of the Future", Update conference 2011

It's All In The Game blog (c) 2005-16 by Jez Nicholson