Small Is Beautiful

Working on a startup is a tremendous learning process. Along with the technical learning, I also get to meet and work with a diverse bunch of folks. I firmly believe in the power of partnerships as a means for small firms to survive and grow, and have been lucky in forming a set of crucial tie-ups with firms that complement our own skills and abilities. Some of these have turned out to be mutually beneficial relationships that have provided a steady stream of work both ways, and crucial inputs on trends in the industry and what our competition is up to. Others have been more psychological comfort than hard cash, however their presence on our portfolio would have indirectly helped generate sales, as clients gained confidence in the spectrum of services we could provide through our partners, although they were only interested in the stuff we did.

However large or small, there is one thing that all my partner companies share - a desire and a passion for growth. In fact, I do not think I have ever met a businessman (and I've met quite a few over the years) who did not want growth. Until yesterday.

I was on the lookout for a partner company that could assist us in targeting a market that is currently facing a lot of growth, and an acquaintance referred me to this one. Looking at their website excited me so much I could not sit down - they were such a perfect complement to our work. Of late I've received so many enquiries that I've had to put on hold because I did not have the requisite experience and knowledge to execute it all. But if this company were with us, we could easily double our strength in a year, and more than double our revenues. If the partner were our size, it would be even better for them, as their share of the work was higher. Together, we could be the Very Large Finger that could tickle the market and make it purr.

However, the owner of the company did not want to grow.

I sat across the table and gazed and wondered at him, thinking if he was for real. I asked him no fewer than five times, in different ways, if he was interested in taking up at least a part of the work I was offering him. It was right up his alley. He seemed a very professional and meticulous person leading an organization that delivered on schedule. However, he didn't want any of it.

I rode back through the rain, nonplussed and frustrated. As KP pointed out, so far we had divided the world of startups into two kinds - the venture funded ones who grew explosively, and the internal-accrual funded ones (to whom we belong), who grew more slowly. We now had to add a third category - the ones who did not grow at all. And I am sure the fertilized startups would have an equally hard time understanding us organics, as we organics had in understanding the bonsais.

I also was reminded of "Small Is Beautiful", an influential 70's book by E F Schumacher. I first read it about ten years back, and liked the way Schumacher married economics and environmentalism. His views on GNP being an insufficient measure of progress, and the need for a quantity that measures well-being instead of money started a school of thought that eventually had some success in Bhutan. However, I had (and still have) a tough time swallowing the main theme of his book viz, that small firms are much better than large ones. To me, that somehow implies a denial of growth, which would lead to stagnation. But perhaps the MD we met was one of those enlightened ones, who had read Schumacher and been transformed. He had been in business for the past twenty years, and would have definitely seen the extreme highs and lows of the Indian Economy during that time. And yet he had a team that was about the same size as my four-year old firm. Or perhaps those kindly eyes knew things about the market that they did not want to disclose, lest it discourage us.

Of the two possibilities, I somehow hope it was Schumacher.