Why startups should be .44 Magnums

Disruption. It’s been playing on my mind since something happened at the eG8 Forum in Paris. Since then, I’ve been to many events involving startups and seen many pitches. Then recently, Nick Halstead re-ignited the ongoing debate about whether startups get enough support from VCs in Europe to ‘think big’, with a bevy of VCs weighing in on the matter.

And that’s what disruption and startups are about: thinking big. Because to my mind, not enough startups do that. Time and again I see pitches from companies that want to create, what in effect is a widget. An application. Something which simply extends an existing ecosystem, or tinkers around the edges. For instance, if I have to see another startup which wants to ‘aggregate travel experiences’ I will gnaw my right leg off. I don’t, in all honesty, care. Because, what would be better, would be a startup which disrupts the entire travel industry altogether – not allows me to book another skydiving holiday from ‘a variety of existing providers’ (as if I would).

I was reminded of this imperative to disrupt at eG8 Forum, the ‘talkfest in Paris earlier this year. Perhaps the best panel of all featured Niklas Zennström, co-founder of Skype, Sean Parker (involved in Napster and Facebook) and Yuri Milner, of investor DST. All three of them are involved in massive disruption from Skype, to Facebook to (in the case of DST) shaking up the investment market in Silicon Valley.

Not one of these guys would do anything small. All of their plays have been ambitious, almost crazy. Disrupt the entire entire telecoms industry? Skype. Change human interaction? Facebook. Assault the music industry? Napster. None of them bother with mere apps and widgets. They subscribe to what I have decided to call The Dirty Harry School of Startups.

It goes like this: You build the biggest handgun you can (in the real world this would equate to a .44 Magnum). You then hold it to the metaphorical head of the largest industry you can find (telecoms, music, media). You then say: “Do you feel lucky, punk?”

Because that is exactly what the three mentioned above did. Their ability to create extreme value came out of their extreme threats to existing industries. They did, if you like, threaten “with extreme prejudice”, to borrow a phrase from Apocalypse Now.

These are the startups I am most impressed with. Don’t get me wrong – the startups that are changing industries in a slower manner can still be good businesses. And likely as not they will start to pull revenues sooner, as they sidle up to partners, create white label versions or whatever. Often they are successful, but they do not – as the English Archers did at the Battle of Crecy – ‘aim for the moon’ to hit the charging phalanx of knights.

Note: I am not saying you have to find an industry to threaten. Your ‘big play’ could simply be a brand new idea, in the same way Twitter was a brand new idea. But ultimately Twitter has threatened something: from the news industry to the SMS revenues of big telcos (which I hardly do these days).

Of course, to build a big gun, you need big investment. Or, at the very least investors who believe in you enough to go with you on the journey towards the ‘weaponising’ of your startup.

So, is this something you want to do? Or do you want to tinker around the edges?

Do do you feel lucky, punk?