“Early revenue forgives all sins” is a common phrase in startup land.
Having revenue allows us to hold on to to false truths about our business. It gives us confidence and arrogance. It justifies and validates our vision and who we are. It prevents us from letting go of bad ideas while allowing us to explore new ones. We are always careful not to threaten revenue by new ideas or cannibalistic innovations. Our culture is to protect our revenue at almost any cost, and under any circumstances. Yet, we often hold on so tightly to revenue and it’s creation that we choke it to death. We leave it like an unpruned rose that in time is over taken by other plants and twisted branches. Eventually choking off new growth in a slow spiral to death.
In this context we have to learn that letting go of what we were for what we can be is critical in the corporate culture. Having a culture that is well trained to understand it’s mission, goals and aspirations. Strong enough to hold on to the important things, fight for it’s survival but flexible enough to let go when better opportunities presents itself. We have to know when to let go of aspects of our business or prune aspects to foster growth. It’s not that we don’t do this today. It’s that we don’t make it an explicite lesson of our culture. Which is why I wrote about Corporate Yoga in my previous posting.
When revenue is down, the investigations begin. The introspections, the retrospection, and then the panic. Leaders who have not planned to let go along the way, find them strapped to the head of a now out of control rocket. The stages that could have been used to launch a new vector or trajectory are not designed into the system. Investors at best, employees worst, and customers always press for answers. The panic starts to weigh on everyone as they start to take on corporate diets to trim the waistline. Failing along the way, the focus is on how to patch the renvue machine. Letting go is now all but impossible. The pressure is on and slowing revenue means no investment. The corporate personhood is ill, and there is no cure in sight. The revenue engine is an anchor that will drown the company if left on it’s lifeline.
So what to do? How to avoid this tragic story? Practice the new power of letting go. Let go of the power you feel with Early Revenue. Prepare your culture to let go of the small things training the culture on how to grap opportunity with one hand while keeping a firm hold on revenue with the other. Let go of small tasks and projects, or slow contributions to the revenue steam in order to build the muscle memory you will need in the corporate personhood. It’s easy to let Revenue be a proxy for success, but real success comes when an company knows how to let go and create even larger opportunities
Formerly known as the Minnesota Mining and Manufacturing Company (3 M’s, get it?), 3M started in 1902 as a mining company that sold a popular mineral to grinding wheel manufacturers.
From a mineral, they began selling sandpaper, then masking tape, then “Scotch Tape”, and today they sell over 55,000 different products including everything from car care products to touch screens.
#2 Abercrombie & Fitch
Founded in 1892 by David Abercrombie and Ezra H. Fitch, Abercrombie & Fitch started as a sporting goods shop and outfitter.
They didn’t become a clothing store until The Limited acquired them in 1988. Now they have over 300 stores in the U.S. and they’re expanding internationally.
David H. McConnell started Avon in 1886 as door-to-door book salesman. Sales were tough at first but he realized that he could gain women’s attention by offering perfume samples.
Soon those perfume samples became more popular than the books, so he founded the California Perfume Company in New York, NY and it eventually became Avon.
Colgate was originally founded in 1806 by a soap and candle maker named William Colgate. They started by selling soap, candles, and starch.
Colgate didn’t start selling toothpaste until 1873 and they sold it by the jar.
In 2004, Flickr started as a chat room with real-time photo sharing for the web-based multiplayer game, Game Neverending. Soon thereafter, they shelved Game Neverending, expanded the uploading and filing of photos, and buried the chat room.
In March 2005, Yahoo! acquired Flickr for $35 million.
Bill Gates and Paul Allen started what eventually became Microsoft in 1968 when a local computer company gave the 13-year-olds access to a computer. They were quickly banned after they learned how to hack the system and crash the files. But the company ultimately re-hired them to find bugs and fix weaknesses in their systems.
Over the next five years they received sporadic programming gigs until Gates enrolled at Harvard. One year in, Allen showed Gates the latest issue of Popular Electronics featuring the Altair 8800 and Allen convinced Gates to drop out so they could develop software for personal computers.
Fusajiro Yamauchi founded Nintendo in 1889 as a playing card company. The game, Hanafuda, became very popular in Japan but they knew the market wasn’t that big. So they began to experiment in other industries. Between 1963 and 1968, Nintendo set up a taxi company, a hotel chain, a TV network, and a food company.
Finally, in 1974, Nintendo entered the video-gaming industry and today they’re third most valuable listed company in Japan.
Nokia got its start in 1865 as a paper mill – the original communications technology. In 1868, Frederick Idestam opened his second pulp mill near the town of Nokia, Finland.
After a century of mergers and acquisitions, Nokia entered the mobile communication in the 1980s with the Mobira Talkman.
Twitter originated from a “daylong brainstorming session” between Jack Dorsey and his podcasting company, Odeo, with the goal of creating an online SMS service to communicate within a small group. It was codenamed, Twttr, after being inspired by Flickr.
At first, it was used internally by Odeo employees and they launched Twitter to the public on July 15, 2006.
Like Colgate, the William Wrigley Jr. Company started by selling soap and baking powder in 1891. Like Avon, William Wrigley began by selling his products door-to-door and he enticed his customers by packaging each can of baking powder with chewing gum.
The chewing gum steadily became more popular than the baking powder. Today several brands of chewing gum are owned by Wrigley, including Juicy Fruit, Extra, Orbit, Hubba Bubba, and 5.
and lest we forget Google
Mark my words, years from now our generation will be saying, “Remember when Google was just a search engine?” Are you reading this on your Android phone or Chrome netbook?