Surprise, You're a Startup Again!

Just when we thought we had finally gotten past all the bullshit of crawling out of startup mode, someone just hit the reset button on us.

“Hop in the Family Truckster, kids, we’re going back to StartupLand!”

Of course, I’m talking about the wholesale disruption that AI just put on nearly every business, and in this case, established businesses that had long since outgrown startup mode, where we thought we were safe and happy.

Startups.com has been around for 15 years (despite our best efforts), and we too have enjoyed being a well-established company that knew exactly what we sold, who our competitors were, and how we got paid.

But probably, just like your startup, all of that changed. Everything we thought was certain a year ago is brand new again.

Surprise! We’re a startup again! At least we picked a good name for it…

WTF Just Happened?

OK, first let’s take stock of what just reset the circuit breaker. AI made 3 things happen overnight, and they all disrupted everything:

The cost to build went to zero. Anyone who has a software or content product and got paid handsomely for that effort just had years of effort turn into a “weekend hackathon.” All those competitive moats were just filled in with dirt.

The cost of staff and systems plummeted. It used to be a competitive advantage to have enough revenue to support a large enough staff to produce a product. Now that same cost structure is a liability against another company that can produce the same product without that cost.

Everything can now be built. All of the things that couldn’t possibly have been imagined before can be built by almost anyone. Which means that anything we should have been providing can be built by our competition at almost zero cost, overnight.

That’s just the top of the iceberg, but it’s a pretty big iceberg.

That means an awful lot of established companies basically not only have to act like a startup again, with innovation at the forefront, but they need to have the cost structure and speed of a startup again, which is not easy to pull off.

Replacing People with Prompts

A huge part of that transition for established companies is the realization that so much of what made us all valuable to the organization 5 seconds ago just got replaced by a chat prompt.

In this case, we’re talking about people, who are the single most complicated part of this transition. We built this company based on a giant series of assumptions of roles, outputs, and costs that were well established. Maybe a year ago, it took 100 people to operate our business, but now our competitor can do it with 10 — maybe less.

There’s nothing cool about this. It means we likely have to cut back. It means good people will likely get displaced, despite being good people.

But that doesn’t change the calculus.

In order to survive, we have to think like a startup that just launched today, because that’s who we compete with now. We need an org chart that reflects the future, not the past, and very few companies will be able to make that transition.

The future isn’t about to be kind to bloated infrastructures.

Time for a Hard Reset

Every single assumption we've made about our companies is about to be tested, whether we accept it or not. It’s not just about people and cost structures; it’s about entire business models and markets.

We can’t think in terms of “How do we torture our current business model into the world of AI?” We need to think about our markets like a new startup entering the market for the first time.

The new business strategy is “What would our business look like if we were 3 people in a room starting from scratch?”

It’s time for a hard reset in our thinking.

Our customers and competition are already deciding what new products will look like, what the pricing model should be, and how quickly they should be available. We need to be the ones innovating on those timelines, not reacting to them.

That’s a massive shift for leadership, which in many cases wasn’t prepared for this (no one was). But now we are testing that resolve at warp speed.

Bold New Frontiers

A lot of the attention right now for existing companies and the people that work for them is how AI is “disrupting” everything — and it is.

But we need to go back to being the disruptor.

That’s how we got here. We need to be the company that moves fast and breaks things, even if we’re the ones who built them. We need to clear out old thinking and only focus on the future, not the past.

We need to be hungry again.

That’s right, friends, it’s time to go back to startup mode. It’s time to once again run naked into the abyss, karate-kicking our way into the future, the same way we did when we first started.

The difference this time is — we already know we can do it.

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