By Francis Moran
I have shamelessly adapted the headline of this post from a Wall Street Journal article I read on the weekend that reviewed two excellent books tracking the ascendancy of Africa over the past decade and predicting that the continent’s rise as an economic force to be reckoned with would continue in similar fashion for the next decade. Acknowledging the structural problems many African countries face on the political front, one of the reviewed authors was quoted as writing, “there is no magic recipe for turning countries around, only good cooks.”
The sharp application of the sentiment to the founding of startup companies was immediately and forcefully impressed upon me. There is no magic recipe for a successful company. There are only good cooks.
When I founded inmedia Public Relations at the height of the telecom boom in late 1998, I used to say our template client was “three engineers, a brilliant idea and $10 to $15-million in U.S. venture capital.” We were seeing these companies form at the rate of several a month, and I thought they were all going to succeed.
Boy, was I wrong.
Looking back, I have identified three reasons why most of these companies failed.
The first is that the success of many of them relied on genuine invention; these companies had to make a breakthrough in the science of physics, semiconductors or photonics in order to achieve what they were setting out to do. I — and they and their investors — swiftly learned a eureka moment can’t be manufactured by throwing money and engineers at it.
The second cause of failure for many came when the telecom bubble burst, and the market for what was being developed went away.
The third, and most common, cause of failure, however, had nothing to do with either of the above. Many of these companies had the capacity to develop the product their business plans called for. Many of them were playing in markets where success, while hard to come by, was still achievable. They went under purely and simply due to a failure to execute. In short, they possessed all the ingredients necessary for success, they were just lousy cooks.
While many companies, and those who back them, continue to search for some sort of elusive formula that will guarantee success, there is a growing awareness that the bet ought to be placed not on the ingredients and steps in the recipe but, rather, on the cooks and their skill in the kitchen. We’re seeing this with the latest initiative out of the Silicon Valley accelerator program Y Combinator, where teams can apply without having any idea whatsoever of the product they might want to build. In other words, Y Combinator will invest in what it thinks is a great team of cooks, and let them figure out later exactly what dish they’re actually going to pull together. You might argue that this is just the latest shot of hot air injected into the unsustainable startup froth that Y Combinator has played no small part in whipping up, but it is still a confirmation of the reality that execution trumps all else.
Our own experience in writing extensively this past year about the commercialization ecosystem would concur that there is no sure-fire path to success. Some companies have made use of every ingredient in the startup larder, and have still failed. There certainly is no commonality among the winners in terms of how they got there except for the ability of the founders to be their own taste-makers, adapt on the fly, use a pinch of this and a dash of that, and eventually pull something out of the oven that enough customers actually want to eat.
Postscript: The photo at the top of this post is a picture I took a year or so ago in Cape Town’s Africa Cafe, where owner and chef Portia de Smidt embodies both sides of the metaphor of cook as entrepreneur. Her food is an inventive and largely self-taught journey through the myriad tastes of this diverse continent while the story of how she and husband Jason de Smidt broke most of the rules of apartheid-era South Africa to open their restaurant first in their own home and eventually in their own building is a classic tale of adaptable and committed entrepreneurship. The metaphor continues whenever I cook something out of Portia’s recipe book as I am obliged to constantly adapt and invent in order to compensate for ingredients I can’t get at all or that exhibit a different flavour profile than their African equivalents.