Little Drips

The compounding effect of adding energy to ecosystems.

Over the past few weeks I have gotten sucked back into the startup ecosystem world just a bit. I have had quite a few phone calls and slack exchanges on the nature of startup ecosystems, and the challenges of building and maintaining them. The conundrum we are collectively facing is that while we all believe that innovation and startup ecosystems are important for our economy, we have not yet collectively found out a way to finance them in any meaningful way.

Part of this challenge is that proving that value is being created is challenging and elusive. In aggregate we can see it and feel it, but the measuring of it is hard.

Part of this is the nature of how lots of energy goes in but does not all come out equally. Help 20 companies and one gets the big win. This is the nature of the startup world — but taking all the energy in and not seeing that energy transformed in each and every instance does not sit right with everyone. It flies in the face of the ‘model’ of what leads to success.

Equally challenging is understand the nature of the work itself. I wrote a bit about it in ‘Small Gestures and Big Impacts.’ A little bit of effort from a lot of people creates the outcomes. Tracking every meeting and every intro and every bit of additional input is just impossible. One comment from one mentor, or an intro at the right time can change an outcome for a person or a company, and you can never know which conversation or introduction will lead to a great outcome. They are easy to see in hindsight but you never know in the present time when you are doing it which interaction will be the crucial one.

When I think about it, I am always thinking about how I can maximize the outcomes, and I go back to basics when it comes to figuring out the how.

When I do consulting, often what I do first with a company is try to help them optimize just a bit. The idea of compounding is something that is part of the way I am wired. When I first go into a company, my first task is to help identify that which can be improved. Rarely do you go in and see an obvious ‘big win’. Frequently what I see is a bunch of small wins that in aggregate add up.

When looking to optimize, it is easier and quicker to just say, ok, if you have 100 people, can we find a way to make this team more effective? can each and every person become 1% more effective at what they do? Forty 0.5% improvements leads to a 20% increase. Can we find them and implement them?

Can we find a way to save a half hour of wasted time per person? Can we improve some small thing that will enable that? Is there one meeting that everyone thinks is useless? Is there a process that if we fixed it would save a half hour of time?

These small tweaks lead to an increase in output, and the excess reinvested. For all companies that have no extra time and no extra money, this gives them back time and money to reinvest.

When I see this happen it works and it is like some sort of black magic. Small tweaks suddenly give companies a resource they did not know they had. The magic of improving margin though a few small tweaks.

This the power of compounding. The small adjustments compound to create additional output, day over day, month over month, year over year.

It is only after I have created ‘free’ resource for the company can the work on the new initiatives begin. The first step is to get the most out of what you have. Once that happens, additional resources in get a free ‘multiplier effect’.

From an ecosystem perspective, the same is true. Each interaction, each introduction, each small bit of advice, each step forward creates a small amount of value that are like the constant drip of water. Each drop looks like nothing, but collectively it adds up to gallons and then thousands of gallons. You can see it when it is becomes a lake. It looks like nothing when you are showing the stakeholders the ‘drip’.

To really supercharge things, you need to increase the ‘drips’. You need to enable the interactions, do the intros, keep dripping the water. You need to help others and give them a way to drip the water. I am always trying to get people I know to mentor more — to add another droplet of knowledge, to do a simple intro, to spend just a little ‘drip’ of time with a founder.

As I wrote about in “Every day, just a little more”, what we can do is embrace that while we see the ‘Big Wins’, they are just a culmination of the constant work we put in, day after day, month after month, that collectively add up. The small work leads to big wins. The constant small inputs compound. The drip eventually turns into a torrent.

My goals is to maximize the drips. Find ways to keep things dripping and to encourage others to ‘drip’ as well. This is the work of ecosystem building. Those in it know it.

For ecosystems to thrive, we need to move away from the big showpieces. The hubs, the buildings, the new programs.. these are part of the equation, but cannot replace the unrelenting power of a million small drips. An ecosystem without someone dripping and asking others to add drips in will not sustain.

If startup ecosystems are what we want, we need to find a way to identify the best ‘drippers’ and sprinkle them around every ecosystem.