Two Brothers

sticks.JPGThere were once two brothers whose father owned a large ranch in Northern California, in an area that would one day be known as the Silicon Valley. AdVenture ranch had been passed down intact through multiple generations and the boys' father wanted to ensure it would pass to his heirs undivided. As such, he devised a test by which he would determine which son was worthy of inheriting the entire adVenture ranch.

To this end, he gathered a large bundle of sticks and bound them with a thick rawhide cord that had been soaked in brine and dried in the sun, forming an iron bond.


A Tale of Two Brothers

The oldest brother, Baxter Dumass Conner, or "BDC" for short, was nearly twice the age of his younger sibling. He was a large, powerful man with a decidedly unimpressive wit. Despite his lack of creativity, he was well respected for his ability to muscle his way through nearly any problem he encountered. Everyone in the valley was sure that BDC would inherit adVenture ranch.

The younger brother, known as "Spark", was short, with a slight physique. Although he could not compete athletically with his older brother, he was a bright, optimistic and affable fellow.

On the day of the contest, dozens of ranchers traveled by horseback and buckboard to cheer BDC on to his inevitable victory. In deference to his age, BDC was afforded the first opportunity to break the sticks. Many in the crowd thought this wise of the boy's father, as it would save Spark the embarrassment of his inevitable failure.

Old Man Conner cleared his throat to quiet the crowd. He then declared, "The son who can break all of the sticks in this bundle shall be the sole heir to the adVenture ranch."

After an entertaining display of flexing and preening, BDC grabbed the bundle in his prodigious hands, pulled it to his chest and slowly began to apply pressure. The veins on his neck bulged and his temples began to visibly throb. Sweat appeared on his chest like drops of morning dew, forming a rivulet down the center of his chest. After numerous grunts, he relaxed, smiled to the small crowd and sheepishly placed the bundle upon his knee. He then renewed his efforts by applying the weight of his massive frame against the bundle. Despite his renewed exertions, the sticks remained unbroken.

With his strength fading, BDC screamed and repeatedly smashed the bundle upon his thigh, causing the ranchers to collectively wince and his leg to ooze a trickle of blood. However, the sticks remained intact. A few ranchers could not suppress a chuckle at the site of BDC limping on his bloody leg while attempting to break the bundle over his head.

The pain in his leg and head, combined with his very public lack of success, enraged BDC and for the first time his assured victory seemed at risk. As he frantically searched for an alternative plan, hr eyed Privy Rock, so named because it stood near the Connor's outhouse. It was the sort of rock wise ranchers worked around. Standing nearly 8-feet high and 12-feet around, the ancient glacier that deposited it on the ranch fractured one side in the process, creating a sharp, angled corner. As he spied the rock, a smile crossed BDC's face. Nodding to his father, as if this was what he had expected his son to do all along, BDC hugged the bundle to his chest and ran toward the rock with all his remaining strength.

The bundle struck the rock's sharp fissure with BDC's full force. For an instant, BDC seemed glued to the rock, hunched over the seemingly unbreakable bundle. With a gasp, he violently ricocheted and crashed backwards into the privy. The unscathed bundle landed next to BDC, who lay gasping and dazed among the fetid remnants of the demolished privy.

No one laughed, smiled or snickered. The crowd began to uncomfortably shuffle away from the sight of BDC's condition. Spark slowly walked over to his brother and the crowd stood still. He gripped his brother's unsavory hand and helped him to his feet. He then walked BDC to the water pump and helped him wash the contents of the privy from his hair and clothes.

What had started as a day of celebration had turned into a day of mockery and ridicule. No one wanted the contest to continue, no one, except Old Man Connor.

The veteran rancher picked up the bundle and handed it to Spark. He held the bundle in both hands and hefted it several times. As the ranchers watched Spark eye the bundle, many of them hoped he would forfeit his chance to break the sticks and thus save himself the inevitable embarrassment of failure.

However, what Spark did next surprised everyone; everyone, except his Father.

He walked to the water trough and soaked the bundle in the sun-warmed water. Once the rawhide was sufficiently moistened, he loosened the cord and untied the knots. He then unwound the bundle and laid the sticks in a row, arranged by their girth. He rapidly broke the smallest sticks with his hands. Those which were too large to break by hand, he leaned against Privy Rock and stamped on them with the heel of his boot.

When all the sticks were broken, he turned expectedly toward his father. Old Man Conner nodded to his son and then addressed the bewildered crowd. "Some of you may think that what Spark did was unfair. However, recall my instructions. The goal was to break each stick, not to break the bundle." He paused, assessing the reaction of the crowd. He knew that Spark's future success depended on his acceptance by the community as the ranch's rightful owner.

He continued, in a commanding voice, "Ranching is changing. Gone are the days when brute force alone can tame the land. I love both of my sons dearly. However, Spark is better suited to keep my grandfather's claim intact. Solving old problems in new ways is the future of this country and it is the future of ranching. Now let's eat!"

As the ranchers turned their attention to the food laid out on the large farm tables under the live oak trees, BDC pushed his way through the crowd. He stopped in front of Spark and broadly planted his feet, blocking Spark's path. He then grabbed Spark in his arms and gave him a massive bear hug, followed by a sloppy, wet kiss on the cheek.

The tension broken, the crowed let out a relieved ‘whoop' and proceeded to devour a week's worth of food.

If Your Only Tool Is A Hammer, What Is Every Problem?

As Clay Christensen's book, The Innovator's Dilemma, so aptly points out, it is very difficult for organizations to abandon the tactics that have proven successful in the past. In many cases, such tactics are derived from the company's core competencies. As such, when successful companies encounter a new problem, they often attempt to solve it in an old way. Additionally, when new technologies are devised to solve old problems more efficiently, BDC's typically reject them in favor of their tried and true solutions. Such companies are victims of their own success.

Big Companies often attempt to solve problems using brute force, deploying tremendous resources in ways that have worked in the past. In situations in which their core competencies are not effective, they tend to deploy more and more of the same resources in the same manner. Once it finally becomes apparent to the BDC that their previously successful methods are no longer effective, it is often too late for them to change course in modulated, reasoned manner. Instead, drastic measures are often required, which are usually implemented after the old management team has been ousted. Such sweeping changes often debilitate the company and sometimes lead to its demise and ultimate acquisition by a smaller, smarter company.

Startups clearly cannot compete with BDC's based upon strength. To succeed, small companies must solve problems using new, different and sometimes unconventional means. They must dissect problems into bite size chunks, rather than trying to solve large, macro problems. By establishing compartmentalized, readily attainable goals, your adVenture can economically solve problems that prove difficult for larger organizations to effectively address.

The Entrepreneurial Golden Rule

As noted in The Rookie Advantage, startups are not bound by the past and have no prior success by which they can be victimized. This lack of institutional history frees startups to view the world in unconventional ways. Embrace this freedom at your adVenture and avoid trying to beat BDC's at their own game. One proven strategy for entrepreneurial success is to avoid the well trod path of the BDC. As described in depth in Conventional Wisdom Isn't, today's unconventional solution often becomes tomorrow's industry standard.

Imagine how ineffective a well-honed, successful basketball team would be if they were thrust on a rugby field, with no knowledge of the game's strategy or rules. Even if the basketball players were intelligent, skilled athletes, it is unlikely they would become accomplished rugby players before the match was over.

In the world of startups, the Golden Rule is NOT, "Those who have the gold, make the rules." Instead, the entrepreneurial Golden Rule is, "Those who make the rules, get the gold." As such, you will have far more success toppling BDC's if you create a new game with an entirely new set of rules and force BDC's to compete with you on your terms.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.


Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.





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