We are the Galapagos Tortoises of lifespan. Our businesses, on the other hand, are mayflies. Nowhere is the contrast more apparent than in the start-up-birthing farm of Old Street Roundabout.
The thing about actual Galapagos tortoises is that they pace themselves. With 170 odd years or more to live you almost never see them in a hurry. Actual real Mayflies on the other hand, they are in a permanent rush. They have to cram an entire life into 24 hours. It’s a pretty exciting day but you wouldn’t want to rush around like that every day for 100 years.
We may conclude that the pace of life that these creatures adopt is appropriate to their time on the planet. Which brings me to the matter of a recent afternoon at Old Street during which I came across 9 startups, 2 gyms, 2 cemeteries and 1 accelerator-program-demo-day.
First, bear in mind that the first person to live to 1000 has already been born according to professors of senescence (which of course is the science of ageing). You may scoff at this, but the claim that with every year that passes scientists discover how to add another year to our lifespan seems less far-fetched. In any event the predictions are in our favour – we will go on almost forever. Like the Galapagos tortoises and beyond.
In the meantime our businesses are trending in the other direction. Big businesses crumble at the edges as technology-driven startups take away large chunks of their market and margins. Airbnb is worth more than Sheraton. Uber is worth more than Boeing. Auto giants bite their nails as Apple, Google and Tesla plot their demise.
The mid-tier suffers even more. The average lifespan of an S&P 500 company has fallen from 67 years in the 1920s to 15 years today.
But what about the Old Street birthing pool? Most startups barely learn to walk before they go bust. This isn’t new. Starting a business was always a risky way to invest your time and money. But now there’s more of them. Lots more. The company CB Insights finds that most startups meet their maker 20 months after raising finance.
According to Thomas Bayes’ famous statistical theorem it ought to be possible to mitigate the probability of startup death by filtering for quality of ideas, management, product-market fit and so on. This is one of the reasons that the Demo Days of Accelerator programs are so well attended by investors.
Which brings us to the demo day of a program called “Entrepreneur First” which was held not one minute’s walk from Old Street roundabout. One after another, nine companies that had not even existed six months previously presented their jaw-dropping innovations in lightning three minute pitches. Every decent accelerator claims a USP. For Entrepreneur First it is that they select not companies but stupidly bright candidates (I went through a different program – so I may write oxymorons). Over six months the bright people met other bright people, formed teams, had an idea, started a business, created prototypes, tested them in the market, and now yelled their world-takeover dreams at startled investors and press in a firehose of adrenalin.
How many of these will succeed? No matter how great the founders, the ideas and the knowhow, the odds are against them. Thus the well-worn adage recommends that if at first you don’t succeed then try, try and try again. But I wonder, how many times can a startup founder hurl themselves at entrepreneurship with the necessary intensity. The longer they live, the faster businesses fail, the more often they will have to do this. A tortoise cannot live like a mayfly.
What I wondered will happen to the thousands of serial entrepreneurs who never reach financial escape velocity? The roundabout at the epicentre of the European startup vortex is full of them. How will they adjust to a different pace of life? They can’t all become columnists for business magazines.
I went for a slow walk to ruminate. It took me past the two large Gyms near the roundabout. Five minutes westward along Old Street you’ll find the recently revamped Ironmonger’s Baths. This, I learned, is built on a site that used to be one of the largest cemeteries in East London. That was when lives were short and businesses were so long they were inherited. \_
The other gym is a few minutes minutes south of the roundabout. Curiously, this is also next to a graveyard. It’s called Bunhill Fields, a name that has been squeamishly softened from the original, Bone Hill. Some 123,000 bodies are interred there.
Among the famous bodies to lie there is that of the statistician Thomas Bayes. He died aged 59 which was a long lifetime in 1761. Both his gravestone and his theorem tell us one thing: Everything ends. The number of human years may be rising but the number of business years is falling.
In the meantime go to the gym and if you’re a startup go to an accelerator program and improve your odds.
This is my November column for British Airways Business Life
Posted by Richard Newton