Startup Innovation: From Chaos to Order

Startup Innovation: From Chaos to Order

When I was a young entrepreneur, I used to think that all you needed to build a successful startup (and become a multi-millionaire) was to raise a lot of money, at a huge valuation, and life is set. There are many people today who think the same and only the people who have been down the path for a bit know the reality.

Startups are the chaos that is trying to get into order. You start with a little bit of chaos and then you try to bring order to the chaos you created. Early-stage of a startup will be 90% chaos and 10% order. Maybe if the chaos can be controlled, with time, effort, and process, you can bring the chaos to 30% and order to 70%.

One cannot go to 100% order because that would lead to old processes and the startup would become obsolete soon. Kodak and Nokia were probably at near 100% order with their processes, systems, products, hierarchy, and so on.

No matter how big you grow, if you do not have a culture of creating chaos, you are going to become extinct because you couldn't adapt to your environment (changing market conditions). You need new genes and you need to prevent in-breeding of the ideas and execution.

In startups, new ideas, new processes, a complete U-turn on certain things, and new people from time to time are mandatory to ensure the survival of the startup. Pivot is the name of the game. That's the process of innovation. But more often than not, too much chaos can also kill a startup.

Innovation doesn't include just adding some new element to the way things were always done. It needs to be followed up with building new processes and systems that will sustain the change. Whenever new ideas are introduced, it takes manual fire fighting and fixing.

New ideas will inject entropy into the system and there is a tendency to gradually descend into chaos if processes are not built to sustain it.

Just like building new muscles, you need a period of pushing limits followed by a period of healing. Without healing, if you keep pushing the limits, then the muscles can get damaged for a long time. That's why too much innovation and too much chaos will lead to breakage.

Once chaos is introduced into the systems of a startup operation, you need to follow up with a period of healing (building systems and processes) to convert that chaos into order.

You can introduce new chaos into the system only when there is a certain level of order in the system. It needs to be introduced at the right time, not too early when it can break the system taking it longer to heal, and not too late when the processes and systems have become too rigid to introduce chaos into it.

Just like anything in the world that is living and being, startups need a rhythm. A perfect rhythm of chaos and order, over and over again.  

You can only create a mess when you have a clean table. You cannot cut through the clutter by adding more the clutter. You need to clean up so that you can create a mess again.

And in my opinion, finding the balance of messiness and cleanliness is the key to startup success. Creativity leads to creation, but the creation can impact more creation, and hence you need some creative destruction to make room for new creation.

In my startup journey, major chaos has come around once in 2 years. And we spend the rest of the time converting that chaos into order. There are no clear data-based indicators to tell you if you are getting settled into the comfort of too much order. Maybe there is, but I have not yet learned to see it.

So far my intuition has served me the best. I do feel a sense of uneasiness when there is too much order, or when it is too much chaos. When there is too much order, I pull something out to disrupt the system (like introducing a new product to my audience). When I feel that there is too much chaos, I take a break to let things run as it is and use the time to bring order to the chaos.

Do you feel the same as an entrepreneur?

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Deepak Kanakaraju