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Secret #11: Be Constructive, Not Disruptive.

As seen on LinkedIn

(This is the eleventh in the 12-part series, “12 Secrets To Attracting Investors To Your Startup“)

Ever play buzzword bingo? If you have, no explanation is needed. If not, none may suffice.

In my corporate days, my team and I played during particularly dry company meetings. We favored expense reporting policy updates, earnings calls, or pretty much any situation where we found ourselves on the receiving end of a far-away oration:

Lauren-the-Leader: “…Thanks, David. As you can see, our Q3 leverage of best practices, coupled with our relentless right-sizing of SG&A, has allowed us to achieve synergies across our global value-chai…”

Toby-my-Teammate: “BINGO!”

When Buzzwords Sting

I used to think that consulting execs were the best in the world at getting to Bingo in one sentence or less. Turns out that they have some fierce competition. It would seem that startup founders also speak fluent buzzword, albeit an entirely different dialect. Whereas corporate types call skills core competencies, the startup set calls them superpowers. Suits reposition, while skinny jeans pivot. How about you? Do you touch base or do you huddle up?

Most of this jargon is harmless noise; inefficient and exclusive perhaps, but ultimately harmless. “Leverage” is, after all, just a high-calorie alternative to “Use” that (like my semicolon above) shows you’ve been to college. Sometimes, though, thoughtless jargon can actually be dangerous.

Consider Disruption. Of the nearly 1,000 startups I’ve met over the past two years, I’d say a good 75 percent stress their intent, and downright eagerness, to disrupt something. An industry. A big company. A government. A long-held social norm. Disruption is taken for granted as the backdrop for today’s startup. Like ping-pong tables, caffeine and ironic mustaches, it’s just…part of the scene.

I’ve come to believe that the thoughtless acceptance of disruption as dogma is misguided. In turn, it’s causing preventable self-harm among the startup community. Cue Morpheus: “What if I told you that you could improve the world faster if you partnered with the very companies you’re out to disrupt?”

Disruption For Its Own Sake Is Not…Constructive

It seems like today’s startups feel fatedlike Oedipus*, to kill their fathers’ businesses. Building a pharma startup? Then you must really be looking forward to sticking it to Pfizer, eh? Got an EdTech startup? Gunning for Pearson, I see? The Baby Boomers, as twenty-somethings, gave us such memorable lines as “Don’t trust anyone over 30.” Ironically, their own children, the Echo Boomers, have taken the adage to heart and are now on their own mission to vaporize companies over 30.

As a Gen Xer, I sit squarely between the Boomers piloting most of the Fortune 500 and the Millennial-driven startups driven to disrupt them. From my perch, I can’t but help to see, and appreciate, both sides of the story:

[Me, Looking Left]: “Sure, Startup Stan, many of today’s big companies might seem predictable and uninspired, but it’s genuinely hard to stay hip when your big ol’ publically traded self has been precision tuned to deliver repeatability and reliability, and stamp out surprises.”

[Me, Looking Right]: “Sure, Corporate Courtney, many of today’s startups might strike you as random, risky or even reckless. But it’s genuinely hard to bootstrap something meaningful, let alone lasting, when you’re short on financial, knowledge and social capital.”

It became clear to my team and I that the communication chasm between these two communities was, as these things usually are, an opportunity in disguise. So, despite our supposed Gen X inclination to shrug our shoulders and say, “Whatever, dude,” we decided do something about it and started a company.

“For Progress To Occur, It Is Necessary For Two Generations To Agree”(~Wag The Dog, 1997)

Our firm, Ringleader Ventures, is built on this core, if contrarian, premise: Most look at startups and enterprises as a classic tale of David and Goliath: A battle to the death between heroic underdogs and gigantic, lumbering villains. We look at things not like an action flick with good guys and bad guys, but instead like a buddy flick with equally lovable, if decidedly distinct, co-stars.

Once you get past the difference in jargon, wardrobe and work styles, you come to realize pretty quickly that there’s an awful lot of common ground and shared values on both sides of the table.

1. Profitable Growth
Every company is hungry for profits and most are looking to grow. Big firms, by definition, have figured out the growth piece. Where they struggle, typically, is on the profitability front. When you’re huge, you have an equally huge target on your back, and you find yourself looking to fend off the threat of commoditization (decreasing margins) wherever you can. Startups typically have the inverse challenge: They’ve built something desirable and differentiated (i.e., profitable) on a unit basis, but they’re seemingly miles away from meaningful scale.

2. Satisfied Customers
Another near-universal goal. Big companies have customers but typically find it challenging, cooking up ever-more-clever ways to keep them satisfied. Startups, on the other hand, typically have something quite clever and satisfactory brewing…but a distinct dirth of customers to share it with.

3. Making an Impact
Every professional worth their salt wants to achieve and make their mark in the world. Too much organization behind you, and you’ll begin to begrudge the “red tape” holding you back. Too little: Heck…you’d be happy to be able to afford tape.

A Better Way (Than Spray And Pray)

Under the time-honored rubric of “diversification,” most investors spray investment dollars over a sufficiently large number of ideas and pray that they’ll hit the next Twitter in the process. Our model might better be characterized as “Listen, then Look.” We listen to our Fortune 1000 client partners to understand where they’re stuck, and we then look high and low for startups that may have solved those particular problems in interesting, unexpected or even accidental ways.

This works for the startups because a partnership with a big guy gives them access to far more customers, the opportunity to grow much faster and, ultimately, a shortcut to their desired impact. Check. This works for the big guys because the startups give them fuel for differentiation/profitability, improved customer satisfaction and, yes, a shortcut to their desired impact.

Finally, it works for my team because we spend less time running around worrying about the Mythical Next Big Thing and more time helping create real value between real partners.

Dentistry For Dinner (Or, How I Learned To Love The Plover Bird)

In grade school, I remember learning about this amazing little bird, the Egyptian Plover. He makes a habit of landing in crocodiles’ mouths…without being eaten. Turns out that the croc consents to the arrangement because she’s getting something out of the deal: The Plover eats up tiny bits of food that were stuck in her teeth. Dentistry for Dinner. A tidy little partnership.

We’re learning, every day, that some of the biggest, most outwardly intimidating corporations in the world are looking for their own little Plover birds. Offering generous terms to somebody lean, mean, fresh and clean who might be able to help them reassert their relevance to their millions of ever-more demanding customers.

Will it be you? Are you willing to trust any companies over 30?

If you’re more into making things than breaking things, give us a shout.

Bottom Line: We prefer to invest in companies willing to help, rather than destroy, established businesses. We believe that disruption for its own sake is not particularly constructive, and we favor founders who realize that a strategic partnership with the right enterprise partner can dramatically change their own trajectory for the better.

*Sophocles’ Oedipus Rex is an epic about fate and foresight. Since you didn’t come here to ruminate on the Greek classics, the gist is: Oedipus unknowingly kills his dad, marries his mom, and ends up poking his eyes out in despair. They’re called tragedies for a reason, I suppose.

 

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