Startup thinking: the FOUR-model
We at the Startup Studio do two things: we help established companies and entrepreneurs think and act like a startup and we build our own startups.
This post is going to focus a little bit on the first one. What does it mean to “think like a startup”? Especially when you’re inside a larger corporation.
For this we use the FOUR-model. FOUR describes four characteristics of a startup company. Each characteristic can be “copied” inside a larger company.
The FOUR are:
- Full Stack Challenge. With this we mean that launching a startup is not just a marketing challenge or a technical challenge or a management challenge or a customer relations challenge (and so forth). It’s a challenge on all these levels. It’s a full stack challenge, from bottom to top. In an established company, you have silos (R&D, marketing, sales, customer service etc) and specialisation. A startup requires a much broader skill set.
- Ownership. Another key characteristic of a startup is that the founders have both an emotional and a financial ownership in the startup. It’s their baby. It’s not a manager telling them what to do as would typically be the case in an established company.
- Uncertainty. The lean startup movement helped define this problem, and the solutions to it. In a startup, all you have are assumptions and guesses about the world. You don’t know if you have the right product on the right market which means you have to explore and discover. The very definition of an established company, on the other hand, is that you know what you are selling and to whom and your task is to optimise this.
- Resource constrained. All companies have limited resources but in a working business they are constantly renewed (otherwise you’re in trouble). A startup, on the other hand, has not yet built a wealth generating machine. You have a burn rate (the speed at which you use up your resources) and a (more or less) fixed amount of resources.
There are different ways to achieve a “full FOUR” inside an established business.
- The Full Stack Challenge means you have to work with cross functional teams from various parts of the company or at least with a varied skill set.
- Ownership means that the project members must choose themselves to work with the project.
- Uncertainty means you have to perform early experiments to validate your assumptions. “Get out of the building”, as lean startup guru Steve Blank puts it.
- Resource constrained means you have to deliver value early and work in clearly defined sprints, for example by applying an agile method such as scrum.
If these four are in place, it is actually possible to reap many of the benefits from being a startup even inside a large company.
Have you tried implementing a startup inside an enterprise? Let us know on Twitter or Facebook.
Why would you benefit as a large, established organisation to work like a startup? Well, that’s a topic for another post. Stay tuned.