Mark Logan — The Real Reasons Startups and Scale-ups Fail (And What to Do About It) (Turing Fest 2018)

What’s the overriding cause of startup failure, and what causes so many successful startups to later break when entering the scale-up phase? Hint: it isn’t funding and it isn’t product/market fit. These are symptoms of a deeper cause. What is that cause, and how do we navigate past it?

Transcript

1. THE REAL REASON START-UPS AND SCALE-UPS FAIL (and what to do about it) @Mark_Logan1 mark@ipso-facto.biz
5. • RUNNING OUT OF MONEY? • PRODUCT-MARKET FIT? MOST COMMON FAILURE PATTERN
11. Size Productivity per person
12. 1 sq.m
13. Size Productivity per person Business City
15. Number of employees Agency per employee Employee 4 Employee 104 Employee 204
16. PEOPLE (capacity) PROCESS (dynamics) STRUCTURE (statics)
17. When growing an organization: Optimize firstly for Agency
21. Executive Management Senior Management Middle Management Front-line Teams Make decisions as close 
 to the business front-line as possible. DECISION LATENCY
23. DECISION INTENSITY
24. Decision Latency Decision Intensity
25. High Agency Requires High Decision Intensity
27. Alignment Net Benefit Too Little Optimum Alignment Too Much
28. Too much alignment is bad for Agency
30. Time % of users still active 80% 50%
31. Product-Market 
 fit is a process, 
 not an event.
32. MARKETING _ We acquire users PRODUCT ENGINEERING _ We build features
33. MULTIPLE NETWORKS Functional Task Innovation Hierarchical Cross-functional Spontaneous
34. Organize and Optimize for the dynamics of your critical flows
35. Optimize for Agency: • Invest in Individual Competence • Push Decision Ownership to the front line • Appropriate Alignment • Remove Barriers to Necessary Resources
37. HYPER AGENCY
38. THANK YOU Mark Logan | Email: mark@ipso-facto.biz | Twitter: @Mark_Logan1