Startup Class 5- The Mechanics of the Mafia
Openbook. Openspace. Open views. Openness- this is the way we conduct ourselves at eToro and this week’s class was no different with our students giving their weekly insights into how they think a successful company should be structured.
Close relations harvest a successful company. As expressed in the blog, Thiels Law a company with high trust people breeds innovation and breeds success. It allows ideas to flourish and allows employees to use their imagination free from constraints and rules.
As mentioned in previous blogs setting up a company is like establishing a family, it is built upon trust and shared values. As the company grows more people need to buy into these shared values and a mafia like structure emerges, as seen in many successful startups like Paypal.
Innovative startups create for the customer rather than chase after them. Traditional forms of trade go after the customer such as a baker, consultant or to some extents 20th/21st century lawyers. Startups on the other hand bring customers to them through creative means. The idea that many social innovations have emerged virally is testament to this theory.
There are 3 stages of how a successful company develops similar I suppose to how one climbs the ranks of a mafia family:
1 The first stage is being a soldier- fighting for your place amongst tough competition.
2 Innovation ‘consigliere’- creating something new, that makes you standout from the crowd and allows you to escape into a blue ocean away from the competition of the red ocean. In eToro’s case this was when became a social investment network
3 Monopoly ‘godfather’- fighting within our own territory. Dominating the market, scaring away competition and earning respect from the crowd.
As seen above within a mafia family there are different roles and responsibilities. Everyone must buy into the vision, but also each member requires different skill sets. In a startup you need a combination of nerds and fighters. You have back office and front office. People to carry the fight to the customer and people that need to create the product. It is important for there to be a diverse group of individuals cooperating and tolerating one another. People should feel free to express their opinions. As mentioned in a previous blog its ok to tell your manager to fuck off…within reason. Recruiting people with different opinions and views allows others to learn from one another, it creates an ideal environment for new ideas to flourish, after all a successful company must share the concept of 10x, to be great you need to think big, think different and think creatively.