What startups can learn from century-old companies

The startup phenomenon is a key element of today’s business world. With its pros and cons, it has brought a healthy wave of innovation and added value to products, services, and management methods. 

Netflix, Uber, and Amazon are now benchmark companies and were startups just a few years ago. 

Their most typical qualities also enhance established companies that are sensitive to new competitors: ambition to be disruptive, flexibility, speed, flat structures, focus on metrics and customer experience, and the ability to pivot (quickly change the business model if it doesn't work). 

However, little has been written about what startups can learn from century-old companies. It even seems that they are opposite worlds that cannot learn from each other. 

These long-standing companies have traits that are especially valuable for any organization, particularly for startups that have challenges and “temptations” that more established companies manage excellently. 

Many startups struggle to properly manage the short and the long term. Several factors can undermine service quality or success: the pressure to quickly raise funds to survive initial loss phases or the need to grow at all costs to generate good metrics. 

The greater focus on generating capital gains and selling the company in the short/medium term versus consolidating a good business project is a legitimate strategy but one that, in more than one case, has harmed the credibility of this excellent entrepreneurial world among customers, investors, and its own employees. 

Long-term vision

Can startups improve their management of these challenges by learning from century-old companies? 

In these companies, the long-term vision, loyalty to an inspiring and powerful purpose, knowing how to evolve without radically altering their foundational values, and turning customers into true fans prevail. Their differential value is, however, their team: commitment, love for well-done work, continuous learning, generosity with the company, motivation, optimism, cohesion, prudence in continuous growth, and closeness to customers and other stakeholders in the communities where they operate. 

Today there are large traditional companies over 100 years old that remain dominant in key markets, such as General Electric, Coca-Cola, UPS, Danone, Banco Santander, Siemens, Saint-Gobain, or Nikon. Their success stories are also good lessons for new companies. 

In Japan, and on a smaller scale, there are many ‘shinise’ companies, a Japanese word for century-old businesses that have maintained ownership within the same family and continue to operate the same business over that time. Temperance, rigor, and stability are not at odds with innovation and adaptation to changing customer tastes. 

There are companies like the Nisiyama Onsen Keiunkan or Hoshi Ryokan hotels (founded in 705 and 718 respectively). Wonderful examples of value contribution to customers, generation after generation. 

Two separate worlds?

Are these cases good examples for startups? Probably not all attributes of these companies are applicable to them, although their long-term vision and market reputation earned day by day are good aspects to learn and enhance in younger companies. At the same time, I believe that both types of companies share some key elements that bring them closer than we might initially think. 

Despite increasing contact and fusion between traditional companies and startups, I still see these two worlds as too distant. Potential synergies, possible businesses, and mutual benefits are still being missed. 

Hopefully, the good results of these collaborations will accelerate this positive trend towards business hybridization. Today, the market is increasingly quick to put each company in its place, regardless of the latest technological innovation, tradition or past successes. 

Now it is increasingly clear that the successful companies of the coming years (large or small, young or long-standing) will be those that best reinvent themselves every day.