Starting up is a high risk business venture, which is why 90% of startups will not be around by the end of the third year of business.
I know I am stating the obvious to many, but this blog is not necessarily addressed to the many, but to the few I know who wrongly assume that an innovative business venture is predictable in its making. The truth is, it isn’t.
When I embarked on this project – setting up MITA’s and Malta’s first accelerator programme – I was not quite sure where this was going to take me. Just like any other startup to whom we preach how important it is for them to validate: validate the problem, validate the chosen customer segment, validate the business model, etc., we ourselves had to do our own research and our own validations. Of course, there is only so much you can do to gain some degree of predictability. But an important take-away for me has been the value of experimentation. Many people associate experiments to the realm of scientific research, the place where the cause-and-effect mantra dominates everything. In reality, as argued by Silicon Valley entrepreneur and academic Steve Blank, designing experiments using the Build-Measure-Learn loop, are often a far better way to start and grow a company than formulating a business plan based on wild guesses done in isolation, assuming that it is all very predictable.
The point I am trying to make, is that a business venture, like any other innovative project, is somewhat akin to navigating uncharted waters. It’s risky. However, without undergoing that risk, one cannot really enjoy the fruits of innovation.
So trying to predict, monitor and control, as we are accustomed to do in the corporate world of “waterfall”, is all very well. But in the case of innovation projects such as starting up, or guiding a bunch of talented techies to start up in just four months, “in circumstances of extreme uncertainty” (quoting Eric Ries), we should exercise reason. Too much of that control over assumed linear predictability risks stifling the creative element, which is at the heart of the innovation itself.