The Startup Way is a 2017 book by Eric Ries, which is a follow-up to his blockbuster Lean Startup.
In The Startup Way, Ries reveals how entrepreneurial principles can be used by businesses to take advantage of enormous opportunities and overcome challenges resulting from our connected economy.
In this series of posts, I’ll share my key takeaways, and relate those to my own experiences and reflections. Let’s start off by exploring how organisations corner themselves by becoming over-reliant on their successes.
Ries states that if an organisation is constrained by capacity, they’d typical endeavour to acquire more, in a bid to gain greater market share. Typically new products are mostly variations of existing product lines. Firms compete primarily on price, quality, variety and distribution. Barriers to entry are high, and growth is slow.
In my view, if exploited for too long, what Ries describes can result in dangerous consequences. It can create a difficult-to-reverse dependence on legacy successes. Repeating and scaling an organisation’s previous successes can become its unspoken raison d’etre. In an increasingly fast-moving market, this can be disastrous.
The over-reliance on existing successes also develops an expectation and success criteria that crowds out the emergence of innovation within organisations. This is illustrated in my Operational System vs Entrepreneurial System graphic below.
I believe this ties into Apex Predator Theory developed by Dave Snowden. Organisations will eventually fail as they become competent and too wedded to the current operations and market offerings.
In my next post, I’ll reflect upon my next takeaway for The Startup Way, which will be on the missing organisational capability that will enable organisations to overcome their over-dependence on past successes.