Startups are born into wartime

April 21, 2011 · 1 min read

Ben Horowitz blogged recently about "peacetime" vs. "wartime" CEOs. As with pretty much everything Ben writes, it's original, insightful, and well worth reading. He defines his terms this way:

Peacetime in business means those times when a company has a large advantage vs. the competition in its core market, and its market is growing. In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.

In wartime, a company is fending off an imminent existential threat. Such a threat can come from a wide range of sources including competition, dramatic macro economic change, market change, supply chain change, and so forth.

Reading the post, I was struck by a thought: Startups are born into wartime. Startups do not begin life with a large advantage vs. the competition. They begin with an imminent existential threat: they have no product, no customers, no revenue, and no funding. Even after the first round of funding, first product launch, and first paying customers, most startups are burning cash and face imminent death if they don't accelerate growth or raise another round. "Peacetime" isn't the default; it's a massive achievement.

To drive it home, Ben says:

In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.

"A single bullet in the chamber and must, at all costs, hit the target"—yup, that's startup life.

One lesson I've learned is that as much as I admire successful leaders and billion-dollar companies, you can't get to where they are by imitating the things they're doing now that they've gotten there. As Steve Blank says, a startup is not a scaled-down version of a big company. Startups—and their CEOs—operate in wartime and can't necessarily imitate the peacetime techniques of the companies they aspire to become.

These days I do most of my writing at The Roots of Progress. If you liked this essay, check out my other work there.


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