Startup teams behave like packs of wolves. And that's a good thing!

George ILIEV's new TEDx talk explores what wolves, green bananas & bird shit can teach us about ourselves, human society and the corporate world:

In brief:

1. Wolves epitomise startup culture: teamwork and sharing. While dogs are a metaphor for corporate culture: hierarchy, domination and submission.

2. Fruit ripening is like lifelong learning. Some people keep learning new skills over their lifetime, just as some fruit (bananas, apples, mangoes) keep ripening after being picked. Others don't: oranges, strawberries and grapes can ripen no further once detached from the stalk.

3. Investment bankers have something in common with bird excrement. Seeds that go through a bird's digestive system are four times more likely to germinate. Similarly, high-pressure jobs make people resilient and release their full potential.

Think about it next time you have a cup of Kopi Luwak coffee.

For the full stories, watch the TED video.

Helpless human babies and pre-revenue startups make for clever parents

It takes clever parents to raise a helpless human baby to adulthood;
It takes clever entrepreneurs to make a pre-revenue startup a success.

By George ILIEV

All babies are vulnerable when they are born. Yet, many animals give birth to young who get on their feet in minutes. Why are human babies so helpless?

Research by Rochester University suggests an interesting hypothesis: humans have become so clever exactly because their babies are so helpless. Helpless babies need smart parents to be able to survive: the more helpless the baby, the smarter the parents need to be to raise them to adulthood. This creates an evolutionary loop which allows babies to be increasingly helpless, as long as their parents are getting increasingly smarter.

Now look at this analogy through the prism of the startup world. The Googles and the Facebooks of the last two decades were born as companies that didn't generate revenue. Many of them were moonshots that took many years to become self-sufficient. Yet, they had smart founders who managed to raise seed and VC capital to tide them over their first years.

At least this is the case in Silicon Valley, where venture capitalists will support a team of bright founders working on a promising idea. On the other hand, European investors are much more risk-averse. European VCs primarily tend to invest in startups that are already generating revenue or are close to that point.

This makes me wonder why the US startup ecosystem and Europe have diverged in their evolution and who bears the responsibility. If US startups are the human babies, are European startups the orangutans?

Photo Credit: Barry Bland

TEDx Kent talk on wolves, bananas and bird shit

By George ILIEV

The three stories in this 14-minute TED talk draw parallels between:

     1) Packs of wolves and startup culture (vs. dogs and corporate culture);
     2) Green bananas and lifelong learning;
     3) Bird excrement and investment bankers.

Metaphors helps us understand the world better because "only 1/6 of your eyeball faces the outside world."

To make your startup a success, do not plant trees in the Arctic!

Lack of market kills companies; Lack of sunshine kills trees.
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!"

Do you work in a Wolf or Dog culture?

If you answered the question you probably gave the wrong answer. Startup culture is wolf culture, while dogs revel in “corporate-style” hierarchy.

(By George ILIEV)

The phrase "dog-eat-dog" was coined for a reason. Counterintuitively, dogs do not cooperate among themselves. Wolves do. Dogs dominate or obey each other in a strict hierarchy of submission, whereas wolves are the ones who “discuss” to make group decisions. If you work for a startup, you are likely working in a “wolf culture”, grounded in cooperation and tolerance. If you work at a big corporation, your environment is probably a “dog culture”, based on domination and pecking order.

Photo: Pack of Wolves (Source: Wikimedia)

EXPERIMENT 1: Top dog dominates in "dog-eat-dog" hierarchy

Recent experiments in Austria show that a top dog will monopolise all food and will not let a lower-ranking dog eat from its bowl. A lower-ranking dog would be so intimidated it would not even dare attempt to eat with the top dog. In contrast, the same experiment with wolves shows that both high-ranking and low-ranking pack members share access to the food. There is a simple explanation why dogs have diverged so far from the cooperative nature of wolves. Dogs were bred for their obedience to man, who is seen by the dog as the “top dog”. Humans mistakenly perceive this as cooperation but from the dog’s perspective this is submission, not cooperation. A dog’s true (beige-to-grey) colours shine through when left in a group of its own.

EXPERIMENT 2: Dogs are poor at independent problem-solving

The domestication of the dog, over around 10,000 years of selective breeding, has reinforced the dog’s hierarchical perception of the world and the micro-society of the pack. This appears to impact the dog’s problem-solving skills. Experiments with dogs and wolves show that 80% of wolves manage to open a can of sausages, while no adult dogs manage to achieve this under the same conditions. The exception are dog puppies, who manage to open the can with a similar success rate as the wolves. This shows that the lack of independence in dogs is increased by their cohabitation with humans as puppies grow up.

THREE LESSONS FOR THE BUSINESS WORLD

Lesson 1: Companies are no democracies

The results of the group-feeding experiment bring to mind a well-known fact: No matter how much we praise democracy as the most sophisticated system for ruling a country , corporations are not democracies. Corporations are authoritarian organisations with an established hierarchy, just like an army, a police unit and a pack of dogs.

Lesson 2: Do not confuse submission with cooperation

Corporate executives can learn from the psychology of the dog. Your corporate subordinates might be very cooperative in their interaction with you (their boss), but that does not mean they see themselves as cooperating. Instead, they may be perceiving themselves as Yes-men who have to act submissively. This model may work for subordinates without strong independent thinking but if you want to keep the real problem-solvers working for you, you have to empower them and treat them like wolves treat each other, with a degree of equality. Otherwise your subordinates may leave for a less hierarchical organisation or for a startup.

Lesson 3: Corporations institutionalise their employees

Corporate culture institutionalises its employees just like the human “top-dog” reduces the problem-solving skills of his/her pet as the puppy grows up. Conversely, startup culture encourages problem solving and independent thinking in ways similar to what the wolf experiments show.

Hope at the end of the dog kennel

Let’s not give a dog a (completely) bad name. Corporations come in all shapes and sizes and corporate cultures vary hugely. In a similar way, there is variation among dog breeds: Labrador retrievers and poodles are more hierarchical and aggressive towards lower-ranking pack members than German shepherds are. It may be no coincidence that German shepherds physically resemble wolves much more closely.

In the corporate world, Google and Facebook have a “less-hiearchical” hierarchy than oil and mining giants like ExxonMobil and BHP Billiton. In the end, both Google and Facebook were born as startups 10-15 years ago. Would another 10,000 years of selective breeding change that?

I look forward to your thoughts in the comments below or @GeorgeILIEV