There is an age old debate in the world of startups… go big or build a lifestyle business. There are a lot of arguments and debates about the benefits of both. From the concepts of building businesses that grow the economy on a small or large scale, to entrepreneurs using their talents to build big products vs. build what they want, etc, etc. Every time these debates crop up, everyone has an opinion on the validity of what type a startup is, whether or not particular examples of people building startups in one of the models can execute on that model, or why a particular startup as an example is different than all other startups at executing on their model. It doesn’t seem to matter if the people debating are go big or go home entrepreneurs or if they are lifestyle business entrepreneurs – they all use the same silly techniques to arguing their points.
Occasionally a discussion about the comparison of technology businesses (businesses that exist as a result of a technological advancement) to non-technology businesses (businesses that would exist without technology, but may be enhanced by the use of it) crops up and things like the neighborhood handyman is compared to the freelance graphic designer and the corner store is compared to the local hosting company. These are fair comparisons – old world concepts to entrepreneurialism have not really be changed – they have just been extended to the new world application. Steve Blank explains this concept nicely in a recent post.
What doesn’t seem to be commonly compared is societies themselves. In our nature we are all social beings – getting together to procreate and recreate. Societies themselves have existed much longer than companies have. With such longevity they have attracted much more study and analysis and offer some insights into understanding what is going on inside companies of all shapes and sizes that may prove interesting.
The organization of entrepreneurialism is similar to the organization of societies. The organization of societies have a few relatively specific forms that have evolved over time. Today most are state based
societies, but there are still smaller societies living on the fringes of state societies that are organized separately. If we look at the different types of societies that exist we can easily see how they relate to the different types of startups that we see as well….
The kin based societies are the traditional hunter/gatherer bands that we think of when we imagine early human life. Not to say that kin based societies are less advanced peoples, they existed with many great qualities:
- They have more leisure time as a percentage of their daily lives then later societies typically have. They are able to do this without sacrificing quality through the use of collective behavior and a deep understanding about what quality of life is.
- They don’t grow very large in the number of people who live/work together and by nature split up when the size is too large instead of become more productive.
- They are selectively opportunistic in that they will move to where the food is if they feel like it, but choose which opportunities are worthwhile.
- Members of the society commonly move between groups and are always welcome to leave or come back.
These societies have a lot of obvious qualities, if you were thinking about the kind of company you would want to work with it is easy to see the benefit of working with this type of group. After 50-80hrs of work every week it would be pretty easy to see how the 4hr work week types or even the 20hr work week types who make up the workers in this type of company have an advantage over what you are doing every day with your life.
The tribe or chieftain societies are those that we think about when we think about a Native American tribe. Essentially these are not usually huge groups of people, usually there are some very humble but dominant people who lead the group. Sometimes they lead the group to massive results where they encompass a large territory or generally control a major commodity or pathway. Typically we think of these societies as having a lot of competition, requiring a lot of effort and time spent executing, we also think of them as being open to change. The qualities that we think these societies have include:
- The ability to be small (in numbers of people and amount of space consumed) as well as the ability to grow into huge groups (think of the size of the Navajo nation or the Aztecs).
- The desire to separate the workload amongst the group to get results (hunters, builders, cooks, etc.). This is different than kin societies where the work is not delegated but a shared activity.
- Freedom from bureaucracy within the group allowing individual contributions to be high and the ability to make change simple.
These societies also have a lot of great qualities, the members may be working harder than in the kin society, but they achieve a lot more. They are able to have larger achievements, set bigger goals, and have a sense of belonging within the group. That sense of belonging and the sense that their contribution has a potentially high impact is one that resonates with a lot of individuals and makes the tribe so appealing. Of course having some leadership makes a huge difference. The people in the kin society don’t want any leadership from others as each member takes this on themselves; while, in the tribe a leader is important to set vision, inspire, and steer the team in the right direction. This desire to follow a leader who is worthy of being followed appeals to that sense of belonging.
Despite starting the conversation with startups in mind, the thought would be incomplete if state societies were not discussed. We think of state societies when we think of a society with a government. No, we’re not
talking about the different types of governing bodies or politics – we only differentiate a governing body from a lack of governing body when we think about state societies. Generally speaking governing bodies are required for massive groups of people. No society has existed as a single cohesive society without a consistent governing body. Before you snicker… there are benefits here as well with qualities such as:
- The ability to dedicate resources to activities that may or may not be fruitless (like a space program – maybe there is something good out there and maybe there isn’t).
- The ability for productive members of society to be productive and the unproductive members to participate in the running of the society (no, governing a society is not productive).
- The ability for each individual to choose how productive their contributions are. Remember in a kin society there really is no way to work hard and achieve outstanding results because there isn’t the right type of support system in place and in a tribe everyone works hard at what they are passionate about (slackers mean the tribe fails). In a state society – some can live life more like they are in a kin society and others can live life more like they are in a tribe.
There are good qualities of a state society, they cover a lot of space and offer a lot of opportunity for learning and growth because of it. Kin societies aren’t societies that are really growing, tribes may or may not be growing (but everyone is working hard to achieve their goals), and state societies are have areas of growth as well as areas of decline and members who choose to participate in the different areas depending on their preference.
As you can see there are certainly some obvious similarities to how societies are organized and how companies can be organized. Certainly an analogy can be drawn with the types of societies that exist and the types of companies introduced in the beginning where lifestyle businesses are more like kin societies, a go-big company is more like a tribe, and a large organization is more like a state society. Using this view it is easier to see the merits of each type and it is easier to appreciate how good or bad a fit the different types for different personalities. If you are building a business that needs to act like a tribe – is everyone you hire on board with that vision? Are you hiring freelancers that belong in a kin society when you need to be hiring hunters? If you are building a business that acts like a kin society are you hiring government worker who seems to appreciate low work effort but doesn’t understand that great execution at the work really means life or death?
So what type of company are you building?
Pingback: Momentum Investing and Social Media | Josh Maher's Blog