By George ILIEV
Millions of small companies and organisations lead a meagre existence: corner shops in the age of the supermarket, startups that grow old without making it big, charities with a handful of employees, street sellers making $3 a day. These are like the stunted trees (known as krummholz) that grow above the treeline in the Arctic and in high mountains.
The treeline separates the areas suitable for tree growth (with an average annual temperature of over 5 °C) from the areas too cold for trees (below 5 °C). Yet, it is not a sharp line but rather a band that may stretch up to 150 km wide in the forest-tundra transition zone in northern Canada. This is the zone where trees fade into krummholz.
Stunted trees cannot grow tall for one of two reasons:
1) lack of sufficient solar radiation and warmth, in the polar areas and high up in the mountains;
2) lack of rain in the transition zone around deserts.
In a similar way, many companies and organisations never make it big for two analogous reasons:
1) lack of a market for their products or services;
2) lack of investment.
"The Number 1 company-killer is lack of market," says US investor Marc Andreessen. Companies that only have a micro-market (e.g. a mom-and-pop store that caters to two streets) resemble the stunted trees that can only survive high in the mountains in a tiny ecological niche, usually sheltered by a rock.
If stunted trees are micro-companies, bonsai trees are our hobbies
The bonsai tree is an exceptional member of the stunted tree category. These miniature trees exist in this form because we, humans, want them to be like this and intentionally deny them nutrients.In the human world of businesses and organisations, the bonsai trees are not companies. They are our hobbies. They are rarely meant to be businesses: they are the blogs that do not profit from advertisement or the flower gardens maintained for pleasure rather than for commercial use.
Sometimes bonsai trees and krummholz get confused in the startup world. Both arise from a personal passion and never make it big. However, there is a crucial difference. The bonsai is never meant to grow big: you don't need a 10 ha flower garden in your back yard. While a flower-growing business that produces cactus leaves to put in flower bunches is clearly making the wrong product for the wrong market and is unlikely to sell much for Valentine's Day (though it might be more successful in sales for April Fools' Day). A hobby can be pursued independently of the external environment because its practice is made possible by cross-subsidising, while a startup always has to start from a market need and can only draw resources from its market.
Humans have one advantage over trees. We pick where to plant them, while the trees have no choice where they happen to be. So, if you want to grow your tree tall, do not plant it in the Arctic. And if you want your company to succeed, find a market first.
Shakespeare might have used this last sentence to wish success to all budding entrepreneurs with the following piece of advice: "Neither a stunted tree, not a bonsai be!"
