Most startups fail in the first year. Few companies make it past five years and even fewer go the distance of lasting decades. Cities on the other hand never die. Unless of course you’re talking about Atlantis, Jericho or Pompeii, but you get my drift. City populations wax and wan, sometimes they are renamed, captured or destroyed, but they are always rebuilt, they always last. They stand the test of time, and if your company is to do the same it would be wise to pay attention to how cities pull it off.
Lesson 1
Cities are built in the image of their founder, but it is the residents that make the city great.
The same goes for companies. You might have a great founder or CEO, but if the entire company rests on their shoulders you will be in trouble when that person leaves. Instead, try to instil the founders traits and attributes into the company’s culture so that it permeates into each employee.
Steve Jobs did a great job of instilling his obeseness over minimalism, quality and aesthetics into Apple’s culture. He did this through ruthless product selection, corporate communication and even went so far as to design the buildings the employees worked in around those values. Steve was also great at saying “No” to new ideas. This helped the company focus on just a few things. Now that he’s gone I’m sure employees at every level will continue to say “No” to all but the best ideas.
Lesson 2
Cities invest in infrastructure such as transportation, education, protection and utilities because they enable productivity and improve quality of life.
Startups live and die by cash flow. Unless you’ve got a cash cow that frees you of financial worries, chances are you’re spending a lot of time focusing on revenue generating actives like developing new products, increased marketing, and a stronger sales force.
While revenue generating activities are vital, long lasting companies invest in infrastructure. Amazon is spending billions of dollars building physical warehouses in each state. In a few years they plan on making next day delivery standard with same day delivery optional. This is the type of infrastructure investment that will always provide value, because customers always want their items to arrive faster. Another example is Facebook building their own data centers so that pages load faster, or agencies opening offices in a new location to better serve local clients.
The above examples improved productivity and quality of life for customers. Investment is also needed for employees. Great tools to work with, flexible working hours, free or subsidized means, convenient transportation options and a great working space. These aren’t perks, but rather necessary infrastructure investments that enables employees to be productive while improving their quality of life.
Lesson 3
Cities embrace what makes them unique, special or different.
Las Vegas was getting a reputation for being one of the most sinful places on either. Instead of embarking on a campaign to clean up their reputation, they embraced the “Sin City” label and marketed to tourists, “What happens in Vegas, stays in Vegas”. In Italy the city of Pisa had a problem with one if their buidings. They could have said, “Oh man, we’ve got to stabilize this tower or people will think we’re poor architects”. Nope. They embraced it and marketed the “Leaning Tower of Pisa” as a tourist attraction.
Companies spend so much of their energy trying to be like their competitors. My competition is doing such and such, so I should do it too. Their branding seems to be stronger than mine, so I’m going to copy how they talk and portray themselves. That’s a great way to make sure nobody remembers who you are.
Instead, try to focus on what makes your business weird and unusual. If you’re a real estate agent that has a reputation of losing sales because you’re too blunt about the shortcomings of the houses, embrace that and build a brand as the “Tell it like it is” agent. You’ll find prospective buyers flocking to you, because they know that you won’t sell them a lemon.
Lesson 4
When cities grow, their residents become more productive.
New York is perhaps the most successful city in the world, largely because its population is so dense. Think about it… I can walk outside my company’s office on 7th ave and within a few blocks I have food, shopping, a barber, dentist, chiropractor, train station, bus station, subway, taxis, a library, and hundreds of people I could talk to. Anything I could possibly need to be productive in life can be found within 10 minutes of my location.
Companies on the other hand tend to make employees less productive as they grow larger. In a startup, you know exactly what’s going on at all times. You’ve got a handful of employees that you talk to almost daily. If you have an idea that you want to implement, you just do it. You don’t need to get approval from different departments. There is no paperwork to fill out, no business justification to prove, no cross functional teams to wait on. A single individual can and MUST be extremely efficient and effective.
Large companies tend to make it very hard for individual employees to be efficient and effective. Organizational structures are usually too hierarchical, and ideas must flow up the chain for a decision for approval and back down the chain for execution. Creativity and innovation are slowed down by risk assessments and business justifications. Information has trouble passing between different departments which creates confusion and rework.
The key is to build your company like a city. Groups should function like little shops on the street where an employee can visit one group, then walk across the aisle to stop by another group. Each group should hold activities that encourage others to stop by, like shops hold promotions to encourage passer-bys to drop in. NYC has Central Park where people can hang out and meet new people, companies need a large public space where people can eat food, play games, have conversations, hold parties, training and demo ideas.
Building a city is no easy task, and neither is building a company. It requires a mindset of, “What might this company look like in 20 to 40 years” not “What’s the best way to get acquired or go IPO in 2 years”. Don’t be Groupon, be Rome.
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Your Turn
Share an idea or two that can help companies stand the test of time.
Hi Dan! This is a great post, and I’ll take a stab at tossing out an idea that can help companies stand the test of time: Maintaining and renewing to prevent stagnation and the decay that comes with it.
Cities need to invest in maintaining and renewing themselves. By maintaining its existing infrastructure through renovation and replacement along with offering key support services, the city will retain its existing people and businesses along with attract new people and businesses that lead to continued growth and prosperity.
Likewise, companies need to make sure that their core infrastructure – both the physical environment and the employees themselves – are being maintained and renewed. This can be as simple as making sure that employees are taking vacations to rest and recharge. An investment in training and the cultivating of new knowledge and skills by providing new job challenges will help retain existing employees and attract new ones that will stimulate growth.
David,
Awesome analogy. Both cities and companies do need to continually investing in infrastructure. It’s a requirement to attract and keep talented folks.