October 22, 2013

TANNIN: Leading From the Front of the Pack

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“Doing a startup is like being a gazelle. If you make a wrong turn you’ll get eaten, but even if you make the right turns, you simply get to live another day.” – Albert Ni, Dropbox

I heard Albert speak at a startup conference earlier this month. I liked this metaphor so much that I wanted to write a post about it, while adding my own twist — the gazelle is running in a pack.

Startups run in packs to make them less vulnerable to being picked off by predators. While this offers more protection, it also makes you stand out more. So, if you fall while in the pack there are likely predators waiting to eat you. The successful startups are the ones who can keep on running, even when dealt a blow — i.e. any event that causes a loss of money. They have a good sense of direction and can change position within the pack.

A gazelle that sprints to the front may be the cool kid for a bit, but unless he can keep up with the pack after his adrenaline wears off he will be eaten. Groupon is a great example of this. They came charging into the startup space with a great new idea about how to provide value for many small businesses, and after only a couple years had 200 million people subscribing to their daily deals. But then other people started copying their business model, the space became insanely competitive, and Groupon’s stock fell from $26 to a low of $2.60 a share.

A gazelle who breaks away from the pack can trick the lions who are following the pack or get picked off because they’re easy prey. In startups this strategy is called pivoting. If a startup feels the market they’re in has a grim outlook they can pivot and try to make money in a new way. Pivoting is risky because it requires a lot of coordination within the company, and unless done correctly it can be crippling. All companies have to pivot at some point to avoid market changes, and in order to be successful you have to pivot at the right time.

Gazelles can live for a long time by running smarter than the pack, not harder. While there may be moments where a gazelle needs to sprint, that pace is unsustainable. Rather, the gazelles/startups who thrive focus their efforts better than their competition. For startups, this could mean ignoring their competition or current trends and pushing out a product they think will succeed. There are many examples of this, but they all boil down to providing the most value to their customers and staying focused on the right things.

A gazelle that maintains its pace in the middle of the pack will may always be safe, but it won’t be remembered. Every gazelle wants to lead the pack and entrepreneurs are the same way. Entrepreneurs always look for different opportunities to increase their pace and reach new heights. The life of a gazelle in the middle of the pack is pretty boring. You can’t see where you’re running. You’re just following the herd. But if you increase your pace, you can lead the pack and push the boundaries for what you can accomplish.

Don’t burn out. Be nimble. Run smart. Never settle. Be like the gazelle.