Leslie Budd
Startups are sexy whilst market incumbents are conservative and boring, is a common view in business. But incumbents were once startups who have sustained their business over time. Bill Gates was once proclaimed the god of the startup geeks, but is often now viewed as a kind of corporate antichrist, a fate which may befall the founders of Apple as well. But the staidness of incumbent firms hides the fact that they are the source of large output and employment. The failure rate of startups in the UK is high. For every ten, two succeed, two are the living dead and six fail within three years. Public policymakers on the other hand big-up startups, particularly high growth ones, as though they were the panacea for the economy and the only source of innovation. Like Paul Newman’s view on extramarital affairs, in which he said why have hamburger out when you can have steak at home: the sexy appeal of startups may wane. And like these two foods, incumbents and startups are part of the menu that feeds the economy.
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