It’s easy to think that big businesses must be doing everything right. After all, how else would they grow to such an impressive size? What most small business owners don’t realize is that while there are many advantages to doing business as a large company, there are typically some large flaws that hold many of them back.
Most successful small businesses don’t have these types of issues and there’s a lot they can teach major corporations. Here’s a look at three lessons in particular:
Fail Fast and Move On
When you run a small business and something needs to be done, whether it’s implementing a new process or fixing a customer’s problem, it gets done quickly. There aren’t meetings upon meetings … trying to accommodate everyone’s schedule. Small businesses understand the advantages of moving quickly (and reap the benefits). Eric Reis, an entrepreneur who coined the lean startup methodology, has impacted various startups with his move fast ideology.
One such company, Bluespark app, created by Paul Howe employed Reis’s approach. The app Howe created allowed people to share when and where they bought a product on Facebook. He tested it with a simple script and it failed fast and hard — people weren’t interested. “Two competitors, meanwhile, went on to spend millions building their own purchase-alert apps. Nine months later, they threw in the towel, citing hostile reactions. By that time, Howe had already moved on to his next idea,” according to Technology Review writer Ted Greenwald. Their colossal failure could have been avoided if they had failed fast and quickly abandoned an idea that wasn’t working.
Embrace a Risk Taking Culture
Many business risks are smart, but few large corporations take them. When a company gets larger, and employees become stuck in an organization where the main goal is to please the boss and keep their jobs. This is far from a startup company culture that encourages dynamic thinking to recognize and take risks. You can’t blame them; it’s a problem that most large corporations face. Risk is often not encouraged or rewarded.
On the other hand, startups and small businesses are typically filled with people who are passionate about what they’re doing. They want to change the industry, and are not concerned with maintaining status quo. History has shown that companies who don’t take risks, miss their opportunity to adapt, lose their edge and eventually fail. Larger companies can learn from the startups by creating a more open company culture and a flatter corporate hierarchy. Particularly, successful (and larger) companies like the online retailer Zappos are attempting to follow this lesson by implementing a flatter structure, hence eliminating managers.
Founders and early employees of a startup are expected to quickly learn and deal with multiple aspects of the business. As companies grow, however, you start hiring specialized accountants, programmers, and other positions that deal with one specific role. While hiring specialized employees is great in theory, it falls short in practice because not understanding other parts of the business is a tremendous limitation.
This is the primary reason that most startups begin with engineers and MBA holders who are both versatile and well-versed in many aspects of business. Take a startup like Wildfire (that was later sold for $450 million) — co-founder Alain Chuard not only had a passion for technology, but he also brought a strong background in entrepreneurship and management to the table. While specialization is important, larger companies should still provide the opportunity for employees to learn other skills and get involved in other areas within the business. Whether it is through online MBA training or hands-on experience, giving employees the opportunity to cross-pollinate will pay off in the long run.
Abigail Clark is an up-and-coming freelance writer writing on behalf of Villanova School of Business, which offers an MBA degree online. She graduated from The University of South Florida with a bachelors in marketing, minoring in journalism. When she isn’t up to her neck in coupons she is enjoying the outdoors fishing. She loves doing reviews for technology, home products and beauty products.
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