Think Exponentially When Building Your Startup

With the first version of your business model canvas, you are ready to check if your assumptions will succeed or fail.

However, I ask you to think BIG.

Salim Ismail, Michael Malone and Yuri Geest identified 10 attributes of what they call the Exponential Organizations (check their book here):

An Exponential Organization is one whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.

It means that by effectively using some of these new organizational techniques you may achieve an impact at least 10x higher than you would if you didn’t consider them.

That’s exactly why I strongly recommend you to stop for one moment and seriously reconsider your business model hypothesis applying these techniques to it.

Besides the 10 attributes, the authors have identified an additional component in Exponential Organizations: The Massive Transformative Purpose (MTP).

So, let’s take a look at MTP and then at the attributes.

Massive Transformative Purpose (MTP)

It’s the WHY behind your solution. It’s the underlying reason of your efforts to solve the problem. It’s the spark that made you decide doing what you are trying to do now.

This is not something you have to come up with. This is something you have to discover in the deep of your mind.

To state a compelling purpose for your startup, you still must consider the first two letters in MTP: Massive (will it impact a lot of people?) and Transformative (will impact peoples’ lives in a significant way?)

Below, you see two MTP examples:

  • TED: “Ideas worth spreading.”
  • Google: “Organize the world’s information.”

As you’ve noticed, it’s key to be succinct and focused when writing it. People should get excited about contributing to the challenge even before understanding exactly what the solution is about.

Now, let’s see the 10 attributes as well as their importance for your startup.

These attributes are divided in two different categories: IDEAS (acronym for external attributes) and SCALE (acronym for internal attributes).

Exponential Organizations Attributes

SCALE

Staff on Demand

What is it? It means using the connective power of technologies to count on professionals from all over the world to accomplish specific tasks for your startup. Today, a faster internet connection, a higher availability of on-line professionals and the existence of several freelancer platforms enhance the ability to access outside professional’s skills.

What are the benefits for my startup? To count on staff on demand means to count on more effective ways of solving problems and more efficient ways of executing tasks. Hence, if you are able to use the creativity and the ability of people there are out there, you may significantly leverage your startup’s outcomes.

Community & Crowd

What is it? It refers to sharing and nurturing your MTP among people related to your product or startup and building a structure to support the interaction and the engagement of those people.

What are the benefits for my startup? Huge! When people get really connected with your purpose and with other interested people, they may put a lot of efforts to help your startup to succeed. Some ways people may collaborate with your startup are: generating and evaluating new ideas; financing your startup; designing, distributing and even helping you to sale your product.

Algorithms

What is it? With current computers’ processing capacity and the development of technologies like artificial intelligence we are raising the possibilites of automating our tasks and processes. Today, even some of the tasks we considered extremely complex may be done by a machine.

What are the benefits for my startup? Several. Algorithms may bring you the computer’s processing speed to your processes making them not only faster, but more accurate and safe too. Being the first to apply algorithms to a process may turn you into an incomparable player.

Leveraged Assets

What is it? It’s considering using other assets to perform tasks in your startup. Yes, renting assets is not something exactly new in our history. However, the trend of considering to outsource almost everything is. That’s because the technology enhancements allow us to better manage the use of third party assets. E.g., Amazon Web Services.

What are the benefits for my startup? When you are able to efficiently and effectively outsource your assets, you may count on better assets for a lower cost than you would if you owned them. Besides that, it let’s your startup more flexible in case things change (e.g., you have to adapt your hypothesis). Besides that, the use of third party assets may allow your startup to quickly raise its capacity as it achieves more traction.

Engagement

What is it? It refers to the techniques used to incentivize engagement and collaboration among people inside and outside the startup. Differently from “Community & Crowd” attribute, Engagement is related to the specific techniques used to boost people’s interactions and contributions. Strongly based on gamification, it considers the use of intrinsic and extrinsic rewards.

What are the benefits for my startup? The ability to transform regular interactions and contributions into an exciting game may leverage a lot people’s engagement on your startup. The more people engage on activities like sharing and promoting your startup or your product, the better your outcomes will be.

IDEAS

Interfaces

What is it? It represents the automated connections that link the outside and inside organizational flows. In other words, they are algorithms and systems that allow the company to easily connect stakeholders demands to it’s internal processes.

What are the benefits for my startup? These interfaces are extremely important to guarantee your startup’s ability to scale. With interfaces that allow your startup to easily translate the external world to the internal world and vice-versa, you’ll be able to grow your startup activities volume without significantly compromising their quality nor their costs.

Dashboards

What is it? It’s the translation and the visualization of your startup’s activities into insightful, clear and shareable metrics. These metrics will guide the work of your team, by showing them the definition of success and how much their efforts are helping to get your startup there.

What are the benefits for my startup? If you want your startup to achieve exponential outcomes you have to learn how to prioritize the work by focusing on the most relevant metrics, measuring them often and correcting the course if things are not happening the way they were planned to be.

Experimentation

What is it? It relates to the startup’s ability to test and learn about their assumptions through disciplined experimentation cycles. To achieve exponential results is not easy and using experimentation is key to discover what works and what doesn’t work.

What are the benefits for my startup? By setting a culture and processes that support experimentation, you’ll be able to discover which assumptions are true and which are not. The better you set your culture and processes to run your experimentation cycles the faster you’ll learn and, consequently, the faster you’ll succeed.

Autonomy

What is it? It helps on leveraging employee’s creativity and execution capacity by giving them space to work by themselves. It means the startup relies less on hierarchical structures and more on employees self-organization to achieve its objectives. To make it possible, it’s important that people are strongly aligned with the MTP as well as know how their work contributes to startup success metrics.

What are the benefits for my startup? Autonomy will bring you the agility to build, measure and learn about your assumptions. If people don’t have a good level of autonomy, your startup will take too long to decide and execute things, which may reduce your startup’s pace of learning.

Social

What is it? It’s related to the social technologies that help employee’s to communicate and share things with each other. Many apps and services have been developed to leverage team’s ability to produce. They provide work flows, files storage interfaces and other features to make the work more fluid and intuitive.

What are the benefits for my startup? It will enhance your startup’s employees productivity. There will be less friction in communication and in the decision making processes. These services may enhance the work of remote employees too.

 


NOW, WHAT?

Grab your first version of the Business Model Canvas and start to brainstorm!

Start by stating your Massive Transformative Purpose.

Then, think about how each attribute (standalone or combined with other attributes) would enhance your startup outcomes. For now, don’t think about the resources to do that. Think about the impact.

After that,  consider ways of executing the most promising ones to, finally, prioritize those you see better chances of bringing the most impact with the resources you may count on.

Leave a Reply