Can Startup really threaten established companies?
While I am thinking of debating this topic through my blog, it apparently seems that startups are in reality putting a lot of pressure on established companies. The pressure seems to be increasing to the level that big companies are even recreating their culture to match that of a startup.
I did some fact finding and came to my own conclusions on what is going great and what not with this startup culture we see as of today. We must appreciate that every big company we see today also had been an startup once upon a time. They grew because they could quickly fulfil the need of the masses in the field of their operation and made profits. They took risks and pushed hard by inventing many things we see today. These companies even today continue to push very hard on the same principles of innovation, risk taking and creating entrepreneurs in the society.
If we see hundreds and thousands of startups, it is a very healthy sign of growing economy. While very few startups would eventually succeed, the process of attempting the startup itself holds potential of creating large organizations that will create jobs and fuel growth in the economy. The only difference we so today in the startup economy is the fact that there are so much more than they ever existed. The underlying fact for such an explosion has been the foundation that was laid out over several decades in form of telecom, education, infrastructure and opening of economies around the world.
During the time when economies were not very open and consumption was far lesser, it was gold that was the object of desire and investment. As stock market started becoming better with opening economies, investments started moving there. Infrastructure started drawing the investment like never before and even ended up in a sub-prime crisis that the world is still struggling to cope up with. With all of the investment options fairly settled and the returns from them no more as high as they used to be, investors have turned towards the new form of investment ‘Startups’.
With ready supply of several young and experienced people wanting to give a shot of their lifetime to make something big for themselves are lured to jump in the risky world of Startups. It is pretty much the same as it happened in the time of finding India by explorers and gold rush in US. It is all about the lure of bigger and at times windfall profits that is pulling in both the investors as well as the creators of startup.
In recent times, India itself has given rise to few great startups, primarily in technology space. Ola, Flipkart, Snapdeal and many more e-commerce companies have started redefining the way consumers in India used to buy goods and services. Many more are in pipeline and consumers will see many more innovative products and services in years to come. The issue the large companies face is very similar to that what was experienced by Titanic. A large ship that could not be turned quickly enough and struck an iceberg that sank the ship. A smaller ship however would be far nimbler. It may not carry so many passengers nor will have the royalty and opulence, but would be great in maneuvering difficult waters. Similarly, a startup has the ability to be nimble, smarter and quicker. Good leadership and great ideas add to the probability of their success too.
It is becoming clear with the success of several startups and fall from grace of several big names like Nokia and Blackberry that if large companies have to continue with their growth they will have to continuously reinvent themselves. They have to work together like smaller entrepreneurs under a big umbrella and not take things for granted. Google probably has done right thing by creating Google and Alphabet and so has HP with just announced division of their company. These are exciting times for startups while the big ones are learning their lessons from young teachers.