{"id":569890,"date":"2010-05-19T08:15:33","date_gmt":"2010-05-19T12:15:33","guid":{"rendered":"http:\/\/www.xconomy.com\/?p=80756"},"modified":"2010-05-19T08:15:33","modified_gmt":"2010-05-19T12:15:33","slug":"three-survival-strategies-for-young-companies-plus-a-stock-tip-from-the-startup-predictor","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/569890","title":{"rendered":"Three Survival Strategies for Young Companies (Plus a Stock Tip) from the Startup Predictor"},"content":{"rendered":"\n
startups<\/a>, entrepreneurs<\/a>, innovation<\/a><\/div>\n

\t\t\"Startup<\/a>
\n\t\tGregory T. Huang wrote:<\/strong><\/p>\n

Thomas Thurston usually charges big bucks for a consultation like the one he gave me this week. But you\u2019re getting it for free here. Of course, maybe it\u2019s a freebie that will make you seek him out for more information. Either way, consider yourself lucky. I do.<\/p>\n

Thurston is the founder of Growth Science International<\/a>, a research and consultancy firm in Portland, OR. If you\u2019re an entrepreneur, startup investor, or just like to play the stock market, you\u2019ll want to know about his work. Thurston has developed a sophisticated mathematical model of \u201cdisruptive innovation,\u201d<\/a> based on principles put forth by Clayton Christensen of Harvard Business School (who spoke in Seattle earlier this week<\/a>). Using his model, Thurston claims to be able to predict, with 85 percent accuracy, the fates of companies.<\/p>\n

Whether or not you believe his model, you might want to listen to his advice. Most of it hinges on the key idea of \u201cdisruption\u201d coming from cheaper, lower-performing products that work their way up-market.<\/p>\n

\u201cThe biggest mistake startups make is assuming the competition will leave them alone when they\u2019re better-performing,\u201d says Thurston, who previously worked at Intel Capital. \u201cStartups always want to be better than their competitors. It\u2019s so ingrained in their fiber. They\u2019re with disruption theory until they have to be worse—but you can\u2019t just be cheaper. Cheaper and better is \u2018sustaining,\u2019 not disruptive. Startups want to raise capital, so they want to talk about why they\u2019re better.\u201d<\/p>\n

Without further ado, here are a few tips from the startup predictor. Ignore them at your peril:<\/p>\n

1. Go non-mainstream<\/strong>.<\/p>\n

Of course, there\u2019s an art to pitching a \u201cdisruptive\u201d startup to customers and investors. \u201cYou don\u2019t go out and say, \u2018I\u2019m worse.\u2019 You find non-mainstream customers who value what you\u2019re good at, even though you\u2019re worse at what the mainstream customers want,\u201d Thurston says. \u201cBut if you\u2019re making better margins in your competitors\u2019 market, they\u2019re going to want to take your business.\u201d (What\u2019s interesting here is that venture-backed startups usually target the biggest possible market; not so, disruptive startups.)<\/p>\n

2. Study failures<\/strong>.<\/p>\n

Thurston built his predictive model in part by studying which companies failed and why. \u201cMost people look at companies who survived and try to learn why. Usually it\u2019s random, it\u2019s hard to see. What people don\u2019t do enough is look at failures, because the data is harder to get,\u201d he says. \u201cWhen you study a lot of failures, you see patterns much more strongly. Startups aren\u2019t spending enough time studying failures.\u201d (This also ties into an interesting cultural discussion about the tolerance for failure in the Seattle innovation community<\/a>.)<\/p>\n

3. Pay attention to narrative—especially when it comes to your competitors<\/strong>.<\/p>\n

Surprisingly, Thurston\u2019s research suggests the valuation companies get from investors can vary by about a factor of three based solely on how they tell their story. Assuming a company has real …Next Page »<\/a><\/span><\/p>\n

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startups, entrepreneurs, innovation Gregory T. Huang wrote: Thomas Thurston usually charges big bucks for a consultation like the one he gave me this week. But you\u2019re getting it for free here. Of course, maybe it\u2019s a freebie that will make you seek him out for more information. Either way, consider yourself lucky. I do. Thurston […]<\/p>\n","protected":false},"author":1747,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-569890","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/569890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1747"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=569890"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/569890\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=569890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=569890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=569890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}