The Mutant Startup

We talk a lot about ‘start-ups’ but what about legacy businesses that have rich history, people, and systems but need to strike out in a new direction? This is very similar and yet very different to start-up culture. In today’s guest post, Tim McDougall breaks down the advantages and challenges of being an intrapreneur. As VP/Publisher of The Gazette/Source Media Group in Cedar Rapids and the leader of the company’s new digital marketing agency Fusionfarm, Tim knows this first hand. Fusionfarm is also a platinum sponsor of next week’s Social Brand Forum.

We think a lot about startups at Fusionfarm. Startup thinking informs a lot of what we do. Failing fast. Iterating often. Hunting for new opportunities, and being aggressive and creative about solving them.

But the dirty secret is that we’re sort of a mutant startup. We don’t run all our meetings at Starbucks, we don’t get our own track of sessions at SXSW Interactive. We don’t chase angel investors, and we don’t obsess about exit strategies.

We do have cubicles. And a corporate policy manual. We are intrapreneurs, not true entrepreneurs. We are the bastard children of the startup world.

See, our “startup” is an off-shoot of a 129-year old local media company. A 129-year old company populated by some fantastic people who have worked hard to build up a dominant local newspaper, TV station, and news websites. Some of whom now work for our startup digital product innovation team and marketing agency, Fusionfarm.

That said, there are advantages and disadvantages to going this route.

On the advantages side:

  • Funding – Traditional local media isn’t viewed as a growth business right now, but it’s still a good, profitable business. And given the disrupted state of media today, our particular local media company is smart enough to fund a team like Fusionfarm and charge us with finding new revenue streams. That makes it easier take smart risks and live by the “fail fast” credo.
  • Talent – We have access to a lot of talented people, many of whom would never take the flying leap into the unknown that is a pure startup, but will take the large step into what we’re doing at Fusionfarm.
  • Sales relationships – We have deep relationships with local businesses, and an experienced sales team in place that we can tap into.
  • Audience – We have access to an audience, via the local media products that we’ve built up over decades. This allows us to quickly test and push new products or services in ways that a typical startup can’t.

These are advantages that a lot of startups would kill for. But it comes with a cost, and experienced intrapreneurs know these pitfalls well. The traps, and some ways we try to counter them:

  • Cultural inertia  Our culture (overall, not necessarily for every individual) is less open to risk taking than a typical startup. We did come from the media business, after all, where getting publicly scolded by an editor for letting a typo get through used to be part of the culture.
    • How we address: We’re fanatically deliberate about celebrating the wins (for example, when we win a new account, we bring pie into our weekly status meeting), and then, when something goes wrong, team leaders really have to focus on how as a team we’re going to fix it, and not place blame. Accountability good, blame bad. If the leaders at the top are willing to make fools of themselves at times to make a point, it only helps. (Fortunately for me and my co-leader at Fusionfarm, Chris Edwards, we’re fairly accomplished at this, and sometimes even do it intentionally.) Creating a non-intimidating atmosphere for people to try something new is critical.
  • Internal competition for resources  Having access to a sales force is great, but if that sales force is already focused on selling other things (in our case print and broadcast advertising) you have to make it worth their while to give some attention to a new, unproven product or service you’re rolling out.
    • How we address: As an intrapreneurial startup, we don’t spend time pitching to investors. Instead, we use this as an opportunity to practice and refine our pitch for our product and service offerings. If we can’t convince our own sales team that the new SEO service we’re offering is fantastic, for example, we can’t really expect them to convince prospective clients of the same. Re-tooling our SEO offering based on their feedback (which we’ve had to do) can feel painful, but we now have a better program.
  • Skills gaps  In a “from scratch” startup, you hire people that have the specific skill sets you want for your business. For us, though, some of our team members with the highest potential are moved over from other roles in the organization. While talented, they can’t always bring with them all the specific skillsets they’re going to need in their new role.
    • How we address: We’ve used a mixed hiring approach – for some roles where we thought our internal acumen was low and the learning curve was steep, like SEO, we’ve hired from outside to boost team acumen fast. For other roles, like social media marketing, we’ve developed and trained talent that was already in the organization. For things like e-commerce mechanics, where most people on the team know a little bit but where we want to raise acumen across the entire team, we’re getting set to kick off a 3-month long training program that we’ll structure as a game. (Remember the part about setting up a non-intimidating atmosphere for trying something new?)

See you at the next startup conference. We’ll be the folks awkwardly trying to blend in with the cool kids in the pure startups.

Tim McDougall is the co-leader of Fusionfarm, a digital product innovation and marketing agency that is part of The Gazette Company in Cedar Rapids, Iowa. Tim is also VP of Products for The Gazette Company and Publisher of The Gazette.

Photo via Flickr user xJason.Rogersx