How To Distinguish “Authenticity” From “Theater”: 10 Metrics To Identify Genuine Partners In An Innovation Ecosystem
In a networked and digital world, how we live, work and relate to one another has changed dramatically. In part, this is the result of the number of opportunities that are now available.
Everyone is now an “entrepreneur”, in the sense that they have the potential to create for themselves a highly personalized lifestyle that revolves around doing something they care passionately about.
Everyone can dream about creating something that changes the world. For many people, this involves setting up their own business. They might not all dream of becoming the next Jeff Bezos or Mark Zuckerberg, but they do dream of adding value to people’s lives by delivering products or services that can make a difference.
Along with these new opportunities, however, there a number of new challenges for anyone looking to start a business today. As innovation cycles get shorter and the pace of innovation gets faster, only those companies that are constantly able to re-invent themselves by adopting a mission-driven, product-oriented culture are able to succeed.
In this respect, every company has now become a technology company. Every company has to set itself up to engage with this expectation of, and demand for, constant innovation.
Many established companies, governments and other third parties have stepped in to provide support to entrepreneurs in meeting this innovation challenge. This support may be financial, but increasingly it involves capacity or network building.
The Emergence of Theater
However, the explosion in this kind of support creates another problem: the emergence of what we can describe as “theater”.
Steve Blank has used the concept of theater to focus on how well-established (and stagnating) corporations implement a range of superficial activities associated with encouraging new startups in order to project a corporate image of being cool and innovative.
This approach also manifests itself in many different forms:
- Advocating “corporate values” that do not reflect what is really valued inside the corporation.
- Introducing “open” workspaces or training sessions by serial entrepreneurs.
- Adopting the fashion style of black turtle neck, sneakers, and “no-tie” clothing policies.
- Setting up a corporate venture capital unit without challenging the corporate attitude.
- Using buzz words.
A similar superficial approach to business building is often employed by entrepreneurs (by introducing the 100th version of “Facebook” or “Groupon”), investors (by offering high valuations and/or cash amounts, but at the same ruining the startup’s cap table), governments (by creating posts with grand-sounding titles, but amorphous responsibilities and little real power; organizing “fact-finding” visits to Silicon Valley; engaging in empty startup talk about “embracing innovation” and “failing fast”; and hosting/sponsoring high profile meetings with stylish founders or business leaders) and consultants and other service providers (by organizing shallow sessions, meetings and events that do not deliver real value to entrepreneurs and/or investors).
Clearly, the risk of this type of theater is significant. Most obviously, it can be a distraction and a waste of time or other resources. Many such initiatives often lack real substance and the content can be somewhat underwhelming.
Innovation theater also connects with the over-selling that routinely takes place on the part of local startup communities. Key players within a local ecosystem will often present their community as having the solution to every challenge and, in doing so, put forward their region as the “no-brainer” option for innovator-founders that comes with a guarantee of success.
How then can entrepreneurs looking to build a business distinguish between this type of “theater” and the kind of help that adds real value to a business?
What capacities do the various stakeholders need to develop in order to make themselves better partners, and what capacities should they look for when looking for the best type of partner?
Metrics for Identifying Genuine Partners
The answer to these questions is that all stakeholders in the startup space need to operate with a certain level of “authenticity”. The capacity to make reliable judgments about the authenticity of a potential partner or opportunity has become more important — and more difficult — as economies have become more complex and connected.
Thinking about the “metrics” that are useful in identifying theater and judging the authenticity of a partner or opportunity is important.
Here are some preliminary suggestions of ten such metrics.
- A “real partner” — The potential partner — whatever role they perform, e.g., providing money or services — clearly demonstrate in their words and actions that their primary focus is on making the young firm successful.
- “Give before you get” — Potential partners are willing to contribute time and energy to an entrepreneur/startup without an obvious and clear expectation of immediate financial or strategic returns.
- Level of entrepreneur friendliness and trust — Potential partners behave with a “reasonable expectation of confidentiality”, but are also transparent about negative information, such as any conflict of interest.
- Respect — Potential partners treat everyone — but particularly the entrepreneur / founder — with politeness and dignity.
- Social media — Potential partners need to be active on social media. Social media is associated with a new degree of transparency and openness. Social media raises privacy and confidentiality concerns, but the best partners will be open about this and regard social media as a means to create a level playing field.
- Educating the ecosystem — A potential partner that is seriously engaged in sharing, educating and vocalizing the “ins-and-outs” of the startup world, and shares this information and communicates with the ecosystem and society more generally.
- Connectivity — A potential partner embraces connectivity in all aspects of their activities. The degree of connectivity is powerful indicator of how much value a particular partner might be able to add to a developing firm.
- Involvement — The willingness of a potential partner to involve — or integrate — others in their own network.
- Platforms — Involvement can be facilitated by “platforms” that institutionalize involvement and create networks. Potential partners that institutionalize involvement via platforms are optimal.
- Complete service — The potential partner is able to help the entrepreneur / startup with everything from business development, hiring, to marketing, design and engineering (or is able to connect entrepreneurs / startups to a network of experts that can provide such help).
Scaling a new business is hard and the presence of theater makes it much harder. The ability to distinguish a genuine opportunity or partner from mere theater is important for any entrepreneur, particularly those with little experience. As such, we need to think more about the metrics that might allow this kind of difficult judgment to be made with greater confidence.