What can the world’s oldest companies teach young entrepreneurs?
I share four key principles in today’s episode of the Go For Launch podcast.
Starting a business is difficult. It is easily one of the most complex things you will ever do in your life. It is no exaggeration to call entrepreneurship a Herculean task. However, you can make the process easier, more productive and more successful by learning from the experience of others.
And guess who sits on the gold mine of experience for new entrepreneurs? The older ones. The oldest ones in fact. There are several things you can learn from older companies of the world. Here are four of the most important lessons:
1. Innovate or die
If you ask some of the top entrepreneurs in Silicon Valley and elsewhere their biggest tip on how to start a business and run it successfully, you’ll often hear three words “Innovate or die.” This is definitely a key principle. The fact is, life changes constantly and no business is immune to the winds of change.
In fact, the winds of change are an apt metaphor to think about constant innovation. Actually the world’s oldest entrepreneur is a design expert, an evolution guru and a champion of green design. We call her Mother Nature.
According to eminent natural sciences writer Janine Benyus, Mother Nature is an entrepreneur who has been performing continuous “research and development” for billions of years. You too, will have to continually bend, flex and innovate if you want to survive in business.
What can young entrepreneurs learn from her? The art of sustainable innovation, regenerative design and continuous improvements. Those are the keys to startup success.
2. Adapt or die
An American family has been running a business since the 1630s and you can learn one important thing to learn from it – adapt to the changing times or die as an entrepreneur. New Hampshire’s Tuttle Farm, which is currently run by the 11th generation of founder John Tuttle’s family, is the oldest farm in the U.S. to have run continually.
And what is the Tuttle family’s secret? Adaptability. In its close to 385 years of business, the Tuttle Farm has survived the explosion of mom-and-pop businesses and later, the expansion of supermarkets in neighboring communities.
To stay relevant, the company has made comprehensive changes to its strategy and operations. It has adapted to technological changes and invested in equipment and processes necessary to survive. As a result, the Tuttle Farm is well equipped to be run by the next 10 generations.
3. Stick to your core competency and die
The lure of core competency is seductive yet fatal. From Xerox to Nokia, many companies have fallen into the trap of inflexibility and killed themselves time and again. These companies could have learned from a 1,428-year old company and survived.
Japan’s ancient construction company Kongo Gumi, which was founded in 578 A.D. made a successful run up until 2006 with the help of one key virtue – flexibility.
The company specialized in constructing Buddhist temples. However, during World War II, when funds were low and deaths high, the company tossed its core competency and ventured into making coffins.
This flexibility of approach helped Kongo Gumi several times, and made was one of the key contributors to its nearly 1500-year run. Unfortunately however, it agreed to be acquired by another Japanese construction company in 2006.
The reason? A series of bad business investments that mired the company deeply in debt. So that’s another lesson a young startup can learn from an older one – handle your money wisely or die.
4. Make your customers happy and thrive
Edward Lloyd’s 17th century startup is the single biggest player in the specialist insurance market today. The company completely nailed customer service and satisfaction, which became its formula for success. Perhaps the most defining moment of Lloyd’s laser-focus on customers was the 1906 announcement Cuthbert Heath (the then underwriter at Lloyd’s) made.
San Francisco was torn apart by an earthquake that caused extensive damage to life and property. It’s important to note that during this era, governments were not expected to supply relief funds, so the burden of losses fell on the insurance industry.
As one of Lloyd’s leading earthquake underwriters at the time, Heath faced an enormous bill, but he honored it and famously instructed his San Franciscan agent to “pay all of our policyholders in full, irrespective of the terms of their policies.”
The earthquake ended up costing Lloyd’s over $50m – a staggering sum in those days and equivalent to more than $1bn in today’s dollars. His actions had highlighted Lloyd’s excellent reputation for paying valid claims – a reputation that still stands today – and business boomed.
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Photo credit (sunflowers at Tuttle’s Farm in Dover, NH): Derek D.
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