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The UK has nurtured a popular and successful start-up environment over the last 10 years, developing organisations and cultures within the tech industry. However, we now find ourselves competing even more so against cities like Berlin due to the UK’s vote to leave the European Union. As a result, the Free Democratic Party in Germany launched a campaign in July in the centre of London reassuring start-ups that they are welcome within Germany’s capital, home to Etsy, HelloFresh, SoundCloud, Rocket Internet and Wunderlist.
The start-up culture that the UK has fostered has filtered across to our multinational corporations (MNC) who are adopting a similar approach. The question is, how can a ‘Silicon Roundabout’ business plan influence growth and will it result in everlasting success?
Firstly, without glamorising start-ups too much, most have a great and engaging mission that people really buy into; this has an immediate and positive impact on their current and potential consumer base. Since 2008 when Eric Ries introduced the ‘lean start-up’ business model, it has become a go to plan for companies starting out, and a familiar sight in the technology entrepreneur community. This model allows start-ups to allocate their resources as efficiently as possible, allowing them to “start as they mean to go on”.
However, trying to adopt this model in a business which already has thousands of employees and many international offices could cause more harm than good. The story of how the eBay homepage was reinvented during a spontaneous trip to Australia demonstrates how larger companies could adopt the ‘start-up’ way without falling behind.
Jack Abraham and five of his co-workers from eBay boarded a 14-hour flight to Sydney to embark on a project that would see the future eBay customer experience change. In a meeting with John Donahoe (CEO, eBay), Abraham and the rest of "Team Six" pitched their new feed design to the eBay board. The results were well received from the directors, especially by eBay’s founder, Pierre Omidyar, and Marc Andreessen. The feed became a central part of eBay.com, which 120 million people see every month. It’s made the site a more valuable tool, bringing increased sales and engagement.
“It was really the first step in driving a more curated, customised, personalised experience for eBay users,” Donahoe says. The team were clearly very good at their jobs and created a pioneering website. It was a risk, but one that hugely paid off. The team that went out to Australia acted as a mini start-up and succeeded.
Start-ups, unfortunately, won’t have the financial backing to perform this sort of act. The Head of R&D at a Big Data company in the UK recently stated that the start-up way is that “less needs to be done upfront in order to get to the market quicker”. Somethings won’t work out; testing needs to be done as you go, but that’s what is endearing about it.
In order for this to happen, and to reduce risk, many start-ups have hired a huge breadth of technical knowledge into their business. This coupled with the focus on end-user centric design (whether B2B or B2C), is how they are troubling their larger competitors. There is no doubt that FTSE100’s have noticed this and are following suit.
From a broader perspective, we have seen many MNCs try to emulate the start-up mentality with cross-functional teams creating more synergy across the business by working in smaller teams to create a fresh concept. So, can this business plan influence growth and result in everlasting success? Well, going by the benefits that the start-up plan develops then one could argue yes, however MNCs experience huge barriers including stakeholder demands, resistance to change and the larger structure of their businesses.
The start-up mentality isn’t right for every MNC but it does bring about a process for many organisations that may find themselves struggling. We are now operating in very uncertain and unpredictable times, and for the UK to remain at the forefront of nurturing successful start-ups and technological giants we must allow and encourage our businesses to flourish. The answer may not be in Australia or Berlin but may very well be closer to home.
Jack Rice | Back-End Development Consultant
0203 301 9937 | firstname.lastname@example.org