I love working with scrappy tech companies. You know the kind: full of fighting spirit, heads-down, close to the customer, focused on delivering excellence day-to-day. These aren’t the kind of people that put together a slide deck to shop around for funding or put their toe in the water and dabble with a company idea. This is the team that gets together and starts building something to solve a problem, often testing it with their first customer. They dive head first into the pond and hope it is deep enough. Soon there is a second customer, or a second order, and the thing just starts to roll. Fantastic. And it keeps on rolling.
Here’s the challenge. It all worked so well in the beginning; the leadership team wants to keep doing the same thing. But the Darwinian fact of life is “evolve or die”. Doing the same thing usually works for a while. But, if they are seriously doing reality checks, it will be clear it is working less and less well. Perhaps that first customer is still 80% of revenue. Or there isn’t enough cash to get past the day-to-day requirements. And the ability to ride out shocks like the recent one approaches zero.
The fundamentals are there. What’s missing is the recognition that doing the same thing in the same way and expecting a different outcome meets Einstein’s definition of insanity.
Scrappy tech companies, like personal savers, need to pay themselves first – they need to save a percent of cash and mindshare to think about where and who they are in their business ecosystem, and to plot out where they want to be a few steps out. And then they need to apply that same scrappy creativity that got them started to increasing their ecosystem footprint and their chance of evolving to the next level in the game.
