How Lucrative Startups Can Avoid Disruption as They Grow

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In his popular TED Talk filmed earlier this year, Adam Grant–New York Times best-selling author of Originals: How Non-Conformists Move the World–leads with a shocking admission.

“Seven years ago, a student came to me and asked me to invest in his company. He said ‘I’m working with three friends and we’re going to try to disrupt an industry by selling stuff online.’ ” Based on the student’s lackluster pitch and the slow progress the founders were making in terms of developing and launching, Grant explains that he decided to pass on the opportunity.

This company turned out to be Warby Parker, and Grant missed his chance to be a part of what Fast Company deemed “the world’s most innovative company” in 2015–valued at over $1 billion.

But it appears the reasons why Grant declined the investment were also some of the reasons Warby Parker was able to become a lucrative startup that avoided potential disruptions as it grew.

In a previous article, I discussed how startups face major problems as they shake up industries, but these problems can be managed by implementing the following solutions or mindsets.

Grow at the right pace

One of the reasons why Grant decided to pass on Warby Parker was because the founders didn’t seem like they were in a hurry to push the company forward. Even Warby Parker co-CEO Dave Gilboa once admitted, “Warby Parker wasn’t the basket that I wanted to put all my eggs into.”

They were slow to grow and took their time incubating the founding idea that would cut into the monopolistic eyeglass-wear industry. This actually worked to the company’s advantage. By the time they were ready to go to market, they had a solid vision and brand–one that was dedicated to building and strengthening customer relationships.

And it’s because of its dedication to customer relationships that Warby Parker was able to grow at a pace that worked best for its customers.

Understand the ecosystem will rebalance

Every disruptive startup will only make monumental waves for a short period of time. Once the initial shock wears off and competitors find their foothold in the market, the ecosystem will rebalance.

In fact, competitors may even implement plans to disrupt the original startup–which can result in legal and legislative action. Take Airbnb’s current situation with the state of New York. After receiving many complaints from the hospitality and real estate industries, New York is putting out new regulations specifically designed to curtail Airbnb’s rentals. Meanwhile, Uber is getting sued by the oldest cab company in San Francisco for “predatory pricing tactics”–among other legal issues the company is facing.

This is why it’s vital for founders to think through any potential backlash. Business leaders must ask themselves: How can the competition outpace us? Do we have a corner on the market? What type of legal problems could arise? By asking these questions, leaders can ensure they have a plan they can execute when the ecosystem starts to tilt out of their favor.

Embrace change as a part of the company culture

Change is always difficult to manage in any organization. I see this all the time at Centric Digital, as we typically help large, traditional companies undergo digital transformation. Categorically, these companies struggle with the ability to change–but the savvy ones know that, in order to compete in today’s market, they must be agile.

The irony here is that these large corporations are often forced to change because of the disruptions produced by smaller, leaner startups–yet I’ve encountered many small businesses that also struggle with the ability to change and pivot when necessary.

The solution is to create a culture that’s dedicated to fostering and encouraging new ideas and innovation. When change becomes part of everyday life, it becomes easier for employees to embrace–which then makes the entire company better equipped to react to changes in the market and potential disruptions.

While the above solutions can help any startup navigate potentially troubling waters, the most important takeaway from Warby Parker’s success is their dedication to customer relationships.

When your customer is at the center of your business plan, growing at the right pace and managing changes in the industry’s ecosystem will become second nature. Startups will know exactly the right move to make for their customers, and in return, customers will keep coming back for more.