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CULTURE/ ENVIRONMENT ...

Stay mean and lean to survive
"Lean and mean" is not just a budget constraint or an accounting practice. It has to be a culture for the startup. This is where startups differ significantly from a corporate environment. Corporations have a lot of "budgeting" limits. Everybody then spends to that limit, no matter they really need the money or not. And they tend to give more room for new and fast growing businesses. "Lean and mean" often refers to the corporate restructuring required for a mature business, maybe as part of a "milking" strategy.

To start with, startups need to be lean and mean because you could not afford the other alternative. Most startups are bootstraps and run on shoe-string budgets. You are almost always short on cash. You are short when the business does not take off. You are also short when it does because you need the cash for working capital.

"Lean and mean" is not only a necessity. It is a culture that helps a startup survive through all its uncertainties. You need to be lean and mean even when you have a lot of money, as it is the case in the internet bubble years. You stay lean and mean even when cash earnings keep rolling in. You might still remember how Murphy's Law inevitably applies to all startups. Whatever can go wrong will go wrong. You live in such an uncertain environment that you need all the cash on hand to survive. Being lean and mean keep you on your toes and make an organization more flexible. You can respond quickly to changes in the environment. A lot of startups find that they could not execute the original business plan and have to change course. You could not do that quickly unless you are lean and mean. Flexibility is often the only competitive advantage for a startup. You could not afford to lose that edge.

The entrepreneur is the patriarch of the tribe
We are talking about "tribal values" here. A tribe is an extended family. Family style of management is not very popular in business schools. Everybody is pushing for more "professional" management style, better corporate governance, more check-and-balance, and more transparency. We are recommending family culture as the pre-dominant one for startups. The team should be like an extended family. The entrepreneur should behave like a father or big brother in the family. You are the patriarch of the tribe.

Why family value ? First of all, it simply takes too long to develop a "professional" corporate culture. We need a clearly defined culture for the startup quickly. Family values come in very handy. Everybody understands the family value. It is a universal value. Second, family values work for startups. It is not accidental that for hundreds of years businesses are started by an extended family. The bond and the security help the team survive the uncertainties of a startup. The sense of shared destiny motivates the members to go the extra mile required for a small team. And you move quickly. You do not want a team member to write a proposal to the CEO to get something changed. You want him to go to the entrepreneur as the big brother in the team to talk things over.
 
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