The formation, development and growth of so many digital start-ups is transfiguring the business world, although not all the changes they are driving are easily identifiable. Some effects are clear: today four of the five most valuable companies in the world that started as start-ups and many of the things that have changed our lives in the last generation, including browsers, WhatsApp and Amazon, come from start-ups.

But start-ups are changing more things. For example, start-ups are informalizing old business standards. In the past, high professionalism, ambition and financial affluence went with suits and shirts without pockets. No longer: entrepreneurs run their businesses with ruthless diligence and go to expensive restaurants dressed in flip-flops and shorts. Welcome these changes if they help prioritize matters of greater substance.

The formation of so many digital start-ups is transfiguring the business world.
Start-ups are also propelling telework. While it is covid that has implemented telework on a massive scale, it is the start-ups, with their flexibility and obsession with results, that have adapted most effectively to telework, forcing the rest of the companies to follow suit or lose talent.

The impact has also changed the way the world’s large companies innovate. Some innovations require the flexibility of smaller teams and shareholders accustomed to competing in high-risk sports. Other innovations need an intellectual uniqueness that does not arise from established structures. All this is very difficult to happen in some areas of large companies, so large companies often innovate by acquiring innovative start-ups. Considering that all the most prosperous societies have large competitive companies and that this also feeds and finances the entrepreneurial ecosystem, it can be said that this is a positive phenomenon.

Perhaps the most relevant transformation that start-ups have brought about has been in our cerebral cortex: they have helped us to perceive how financial and labor success is associated with risk, obsessive dedication to work, talent and training. They have taught us how serendipity is essential, how ambition and professionalism are necessary and how questioning realities without dogmatism can change the environment. All this is commendable, as Keynes said: “The difficulty is not to create new ideas, it is to escape from old ones”.

Start-ups, then, are helping to clean the hull of our ship. But not everything is purifying fire. There is a tendency to hide failure, to ignore the centrality of fortune in all entrepreneurial achievement, to ignore too often what has not worked, and to greatly exaggerate the power of meritocracy in societies where starting points are very disparate.

Napoleon supposedly said disparagingly that the English “are a nation of store owners.” As history would have it, it was those same shopkeepers who defeated him at Waterloo. Presumably, the great general did not grasp the extent to which proprietors and SMEs help in the development of a society. It could be said that today’s start-ups do not cure everything, but that they are a new type of owners that can have as great a positive impact as the British shopkeepers, who, let us remember, also brought about the industrial revolution.

Article written in La Vanguardia:

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