Why Mindset Matters
Here's the average lifespan of a startup, three years. The average lifespan of a Fortune 500 was 40, that was about 20 years ago. It is now much less. It's 18 trending towards 12. So the companies with the money, the expertise, the plant, capital, equipment, the ability to buy every two-guys-in-a-garage startup in the world are going out of business ever faster to two guys in a garage. Why is that, we'll come back to that. First, why are, why do startups go out of business? Why, throw out some reasons why. Top three reasons that startups go out of business. Just throw out some ideas, why, why does that happen?
Half-baked, bad idea, kay.
The partners don't, they, they have no right to each other.
Okay, partners, disagreement between partners, okay. These are all good, it's not top three yet, but keep going.
Poor feasibility or market.
Yeah alright, so number three reason out of the top three is poor operations, I mean a lot of opportuners, lot of creative people ...
aren't necessarily good at operate, makes sense, right? Almost all startups are founded by creative visionaries. Almost all. Number two is money. But number one is kind of interesting. Number one is they abandon their own enterprise. So if you think about it, these creative visionaries, and you met these people, well some of you are these people. They sit down with you, they have lunch with you, they tell you about their amazing idea. They're gonna do this business, this app, this thing. It's so exciting they've got a business rolling, they got a business plan, they got some support, they got some money, and then you sit down with them, six or eight months later and they're like, I have this idea, we're gonna do this new business, and you're like, well what happened to the other one? And you're like, oh it's better. So creative visionaries often leave their own enterprise to do another one. They have squirrel moments within their own companies, so that's the number one reason that these go out of business, so what happen over here though? Why do these companies go out of business? Fortune 500s, with all the expertise, knowledge, company money, you name it. What's that?
[Man With Glasses] Trends changer or.
Trends change and what happens or what doesn't happen?
They don't keep up with it.
They do not keep up, why, who's in charge?
Who leads Fortune 500 (mumbles)?
(mumbles) new ideas, verse.
Its operators, they beget, they get so hamstrung by the operators, the six sigma, the quality of the risk aversion, the process, the A to B to C, the linear thinking that they can't see change happening right in front of them, or even if they see it, they ignore it, because they like the status quo. And they shunt the creative visionaries out of their businesses. Or quell them in such a way that they no longer have a voice. Though that's what happens. You know, was there a mystery that high speed data was coming to the internet, you know 15 years ago that might be able to carry video? Was that some secret that Netflix had that Blockbuster couldn't see coming? No, it was in the paper everyday, right? But they were busy counting their beta maxes, and I'm positive they had an operator, a heavy operator, culture that was all focused on bottom line and getting things done more efficiently, and failing to see opportunity that's standing right in front of them, and it goes on and on. I mean Kodak invented digital photography. They invented the first megapixel camera, and didn't even ever compete in the space. 'Cause they doubled down on chemicals and paper, why? Because operator cultures. Was it a mystery that there might be an online currency that could be useful in the future? Was that some secret that only PayPal had? Visa, MasterCard, just couldn't, no, again. Obvious, in front of them, failed take advantage. And then of course E-commerce, the single biggest story of the late 90s and the early 2000s, and yet Walmart and Borders and Sears failed to see it, and two of those are out of business. One's still chasing, and you know, Sony owned digital music. They own, they I'm sorry, they owned Mobile Music, right? They invented the, the Walkman and then the Discman, and then they failed to see this emerging trend, that would, that Apple took, you know, took, took care of in an amazing way, and they missed the boat completely. So the question is, for your business is, what are you failing to see coming that's right in front of you? If you have an operator-led culture, there's a good chance that there's a significant transition going to happen and you may miss it if you don't enable your creative visionaries.