Optimised for Learning

My friend and mentor Sam Knowles, who was founding CEO of Kiwibank and chairman at Xero, is still heavily involved with startups. Why? Surely he is way beyond startups? The primary reason he has articulated to me several times is that startups are ‘optimised for learning’. Sam is a lifelong learner and, like me, finds learning fulfilling in and of itself.

Beyond the human part of startups, the biggest benefit I personally experience is the continuous, high-speed learning that startups force on anyone in or near the cockpit. 

Beyond textbooks

I recently had the privilege of hosting a ‘Disruptive Marketing Jam’, which was sponsored by venture capital firm Movac (where I’m an operating partner) with support from Salesforce.

Various marketing/revenue leaders from high-growth Kiwi companies told their best stories of growth interventions that accelerated their success. These included community initiatives, exploiting data, building great brands, leveraging ‘PR disasters’ and so on.

It occurred to me that these ideas can only really be brought to life inside a startup, because they require risk taking, experimentation and a lack of concern for their failure or blowback.  And what also became clear is that the protagonists in these stories had a learning mindset.

And it’s knowledge that’s almost impossible to acquire outside of an ambitious and nimble company, or from textbooks.

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Learning faster

There are some specific reasons why learning happens a lot faster in a startup than elsewhere. For me, these include:

• A startup is generally trying to figure out a previously unsolved problem. This focuses the mind in a qualitatively different way, and drives de facto creativity in the approach(es) to solving the problem. The individuals in the startup also typically push against multiple ‘edges’ at the same time; they are trying to solve many sub-problems simultaneously. Because there is no ‘known solution’, more learning happens.
• The best startups have ‘test and learn’ tattooed on their foreheads (or should!). They operate at speed and confront new theses every week or month. And they do not obsess over avoiding failures; failing helps to discount options and opinions.

As you might expect, they typically adopt more effective collaboration tools and organisational models too, and operate at a much higher tempo. How they work means startups learn faster.

• In any startup, you have direct line-of-sight. You have direct access to decision makers, customers and technical specialists all at once. By default, you work in flatter organisational structures or hierarchies with less bureaucracy, which creates more incisive feedback loops and deeper accountability which, in turn, also increases the speed of learning.
• Most interesting startups (at least the ones I work with) are global in intent. They are up against everybody. In New Zealand, Auckland Airport competes with no one;  Genesis Energy has regulatory protection from its major shareholder. Jumping on the world stage forces you to be ‘fighting fit’, which in turn drives learning urgency.  It’s the difference between what you need to know for a weekend social game of rugby, and turning up for the All Blacks.
• People in startups wear many hats. Not only does the ‘many hats syndrome’ mean more learning in its own right (because you are doing the jobs – and learning – of multiple people simultaneously), but it also means that individuals have to connect more dots themselves. Connecting dots is more or less my definition of learning.
• And of course, there are the people. Startups contain many of the most motivated, talented and interesting people imaginable. The ratio of people-you-can-learn-from to people-you-should-definitely-ignore is orders of magnitude higher than in any other parts of our economy (‘sorry, not sorry’ to my friends working in banks or government departments). And we all know, much of what we learn, we learn from other humans.  It’s that simple.

The downsides?

Startup ‘downsides’ are too many to list but include earning less, the stress of uncertainty, the increased likelihood of failure, and so on. And the constraints to going faster are everywhere, including – most importantly – in the market itself. It’s not all glory.If learning is your highest priority, then startups are the place to be.  

Not everyone likes learning – not everyone is wired that way – but if you get a big kick out of getting smarter every day, startup life has a lot to offer. Get amongst it!

Serge van Dam is an early-stage startup investor, focused on going-global productivity SaaS companies. He spends much of his time with a bayonet in hand yelling ‘now!’ in the startup trenches.