July 27, 2007

What’s the DNA of your company? - By Sanjay Anandaram

Early last year, I met a startup team that was building the next great mobile application. They had built a system that could offer mobile social networking to end consumers. The team had great technologists including a few successful entrepreneurs among them. They were convinced that their system would be the next great thing for consumers; they were supremely confident (bordering on overconfidence) about the uniqueness of their offering. This company was trying to build a company focused on the end-consumer as their customer. This meant that they had to build a brand, build a system that would be ridiculously easy for consumers to use, have a mechanism that would keep attracting people back to them, and figure out a way to make money. Of course, companies like Google and MySpace were their role models. The team had enormous expertise in building and running systems for businesses, selling and marketing to businesses and supporting business customers. They however had no experience in developing consumer facing businesses, no experience of creating and running a brand, and no experience of the mobile world. And most importantly, they were targeting a consumer segment (namely, youth) that was far removed from the world the team inhabited – for example, the team was comprised of technology people in their late thirties to early forties who didn’t blog, didn’t socially network and essentially didn’t do the social things that their customers were involved with. Given that they were great technologists, they quickly figured out the nuances of mobile technology. But solving the other issues required a different mind-set, a different set of experiences, a different set of expertise and involvement. In short, it required a different organizational DNA.

Every organization has a certain DNA. It is critical to realise this, understand it, and then leverage it for developing maximum benefit. In some cases, the realization and understanding of it results in needing to reconfigure the company’s plan and making changes (additions or subtractions) to the team. Does the team have the right background, does it understand the market space and its customers, does it have the experience of working in the same space ie, the relationships to form partnerships and to hire people, experience of the operating realities, the ability to market and sell to the target segment are issues of paramount importance. The fact that investors seek well rounded high quality teams only buttresses this point. All too often, people confuse years of experience with having the “right” experience – right for the job on hand. For example, having 20 years experience on the shop floor at say, Tata Motors isn’t of quite relevant to the launching of a new hair oil at say, Marico. Young companies, very especially, cannot afford the luxury of getting the entire organization up the learning curve, more so in markets that are competitive. While the people may be smart, energetic, and hard working, the changing of mind-sets and the unlearning of past experiences takes a lot more. Many a time therefore, having no experience can be a bigger asset than having a lot of experience that might not be relevant or appropriate to the job on hand.

Understanding your organization’s DNA – the sum total of its experiences, culture, mind-set, approach, abilities and competencies - is therefore very important for young companies to appreciate. This appreciation leads to the creation of first, the right team and thereby a strategy and approach that’s more relevant and real to the market context of the company. Given the organization’s DNA, it is appropriate for a company to drive maximum benefit by the leveraging of it. It is this DNA that gives a company insight and the ability to navigate the openings in the market that others with a different DNA cannot.

I met the mobile startup company again a few weeks ago. They were far more down to earth. The arrogance of ignorance (of the market, competition, selling and marketing challenges) had gone. Instead, they seemed reassured and focused and had got their first customer: a small and medium business! They were no longer focused on the young consumer but instead were focused on helping small businesses use their mobile system to reach out to the youth. The value proposition, business model, sales, marketing and customer support mechanism had been reconfigured to meet the needs of businesses. The business knew how and what to sell to its young customers. This company knew how to work its technology and sell to businesses. It was therefore now playing to the strengths and experiences of its team. In short, it was now building the company in line with their DNA. And a few investors were now actively circling the company believing that the team now had a distinct chance of succeeding compared to its earlier avatar.

What is your organizational DNA?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.