If you want to gain real insight into a start up company, ask someone to tell you the story of how the company was founded. Start ups have precious little history and culture and therefore, since these stories may be all they have to bind the company together, they are elevated to the status of myth.
In The Hero with a Thousand Faces, Joseph Campbell deconstructed classic myths and identified a recipe for myth creation that spans cultures. (For those of you who are not aware, George Lucas borrowed heavily from Joseph Campbell’s recipe when he wrote Star Wars). Founding myths also have a common recipe:
- The founder(s) was toiling away in a related, but somewhat different, job
- He/she identified a problem or need
- He/she developed a vision for how to fix the problem/fill the need
- He/she became so convinced in its widespread appeal, they were compelled to start a company
Founding myths are incredibly powerful. They are critical recruiting tools for start ups, who in absence of more tangible factors like rapidly accelerating revenue, use them to sell the promise of the company to prospective employees. Internally, they provide a common vision that everyone can hold on to – especially important as companies are finding their way in the market. Founding myths actually grow more powerful over time. Companies use them as a lens that sees every success as a reinforcement of the myth’s validity and setbacks as caused by other factors.
However, founding myths also have a downside. If (actually when) the founding myth collides with market reality, it takes a very long time for a company to adapt. The myth is so interwoven with the fabric of organization that it takes a major negative event before companies are willing to let go.
Documentum, where I worked in the mid 1990s, is a company whose founding myth cut both ways. Documentum was founded to be the Oracle of Content. Buried into this myth was the vision that like Oracle, Documentum would have one repository into which all types of content would be stored. Initially, the myth led to the creation of the most scalable, feature rich, and flexible content management system on the market (it had to store everything). This enabled Documentum to easily tailor its solution to meet the needs of its customers. However, the myth ran aground when the Internet and HTML came along. Unwilling to part with the idea of a single repository, the company tried to force fit HTML into a system that was never designed to support it. As a result, the company opened the door to Vignette, Interwoven, and other web content management companies. Only much later did the company abandon the one-repository vision.
While failing to challenge the founding myth ended up costing Documentum a major opportunity, it can be fatal for companies whose founding myth runs into market reality earlier in their lives. Therefore, we recommend that challenging the founding myth be an integral part of all strategy development work. Start by listing the core beliefs about the company (one repository for all content, we are Open Source, etc.) and consider the following three questions:
- Where did this core belief come from?
- What facts do you have to support or refute its validity?
- What would happen if you tossed it out?
If you are short on supporting facts and you can come up with a few good things that would happen if you tossed it out, it may be time to let go.