How Can Startups Grow?

A Harvard professor has some interesting findings about ways to grow a startup.

Assistant professor Mukti Khaire believes that small companies can grow by developing intangible social resources such as legitimacy, status, and reputation.

Makes sense. I'm on board so far.

In an interesting twist, her research on this insight is that these intangible resources may be best acquired by following a road of conformity in how your company is organized and presented to the outside world. Conventional business titles such as Marketing Director are much better than Chief Evangelist. Organizationally, a hierarchical structure will be much better understood and accepted by outsiders than a flat, decentralized decision-making structure.

I'm not so sure about this. I think it depends on what you are trying to do. In general, I think it's best to relate a new business concept to an old one. People seem to understand that better and are quicker to embrace it. But, if you are trying to be truly disruptive, I think associating your new concept with an old one risks watering it down. You could lose the "wow" factor. Not to mention that too much hierarchy could kill a startup. It's not always good to seem bigger than you are. Smallness has advantages too.

  • Read a little further and you come to a big red flag.

    It appears the professor studied nothing but start-up advertising agencies. Yikes. There’s no way their world of smoke, mirrors, and cronyism relates to any business that actually creates a product, solves a pRoblem, and adds tangible economic value.

    Not to say that there are no legit agencies that add tangible value, there are some maybe a significant minority. But overall they work in a world that’s very different than retail, manufacturing, or professional services. I wouldn’t buy any generalizations about small ad agencies as a example of an entrepreneurial anything.

  • Rob

    Interesting… I got another email about from someone who didn’t like the fact that she studied ad agencies. Given that most agencies claim to be so creative, I’m surprised that they don’t like titles like “chief evangelist.”