How startups can position themselves for growth in the next normal

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Michael J. Sikorsky, CEO and co-founder Robots & Pencils.

How do entrepreneurs and startup founders position their companies for growth during times of uncertainty and recessionary conditions? To answer this question, Ray Wang, CEO and founder of a Silicon Valley-based advisory firm Constellation Research, and I invited a startup CEO and co-founder that launched his company during the last time we experienced an economic recession, and then grew his business to the 34th fastest growing startup in North America, to our weekly show DisrupTV. 

Michael J. Sikorsky is the CEO and co-founder of Robots & Pencils. Michael co-founded his company in 2009 and grew it by 4,800% in the first five years. The 34th fastest-growing startup in North America, Robots & Pencils has become a trusted partner to some of the world’s most innovative companies with over 250 applications used by nearly 80 million people. Sikorsky was named the 50 most influential people in Canada. He was also named by Ernest Young as an entrepreneur of the year. Sikorsky has keynotes at Harvard Business School, Stanford, MIT, and the World Economic Forum.

Here are my 10 takeaways of our discussion with Michael J. Sikorsky, CEO and co-founder of Robots and Pencils:

  1. The future of business is a permission-less organization. Sikorsky reminds us that AIs do not ask for permission and that the next generation of talent will also expect greater autonomy from businesses. In the fourth industrial revolution, disruption must begin with organizational design. Remember, companies do not disrupt, people disrupt. 

    “The declining need for permission and how it creates a competitive advantage.” — Michael J. Sikorsky 

  2. Organizational structure is your competitive advantage. How do you design your company for continuous movement, optimal flow and minimizing friction? How do you co-create value at the speed of need? Sikorsky believes there are three important key performance indicators (KPIs) in a permission-less organization: 1. Speed of decisions, which is really based on trust, 2. Judgment and 3. Measuring entrepreneurial thinking
  3. Snow melts from the edges. Sikorsky reminds us of the belief from Andy Grove, former CEO of Intel – snow grows from the edges which means asks ‘how do you push as much of the decision rights to the edge of the organization, and then how do you follow the talent to lead you there?’  With the explosive growth of technology, how can any business lead from top-down mentality? Sikorsky is building company based of flow principles of living organisms. Andy Grove also reminded us of the importance of a healthy dose of paranoia in order to achieve high performance. Today, given the health, climate, economic periods of difficulty and uncertainty, speed, and relevance are two important business currencies. 
  4. Humans are poor substitute for robots. As we shift from the third industrial revolution to the fourth industrial revolution, we want humans to be more uniquely human. We want our employees to have more opportunities to be creative and engaged by meaningfully introducing automation into our businesses. 
  5. Growth-oriented business leaders are race track designers focused on the drivers. Sikorsky said that his goal is to build a race track and then invite talent that can drive at the highest speeds on the track. He designed a race track to allow his people to execute at the fastest possible way. He believes that talent will drive you to the future. As a young entrepreneur, Sikorsky builds a race track for a top-down model, focusing on optimizing his own speed. Later on, he realized that the focus should be on the talent, not the CEO or management. Ultimately the growth of your business is the function of the growth of your people. 
  6. Decisions are either one-way doors or two-way doors. A two-way door allows your team to go fast and comeback if the decisions are incorrect. One-way doors are harder so you need more thinking and analysis. 
  7. Challenge assumptions, starting with your own. Sikorsky references a quote from Charlie Munger, ‘If you didn’t destroy one of your best love ideas each year, then you probably wasted a year.’ There is a 6-9 months gestation period to know if your organization structure is designed for optimal speed.  
  8. No matter who you are, most of the smartest people work for someone else. Bill Joy’s Law. We asked Sikorsky about how can founders stay humble and teachable when they achieve hyper-growth and success. Sikorsky said that he always surrounded by smarter people wherever he goes. He also mentioned having a growth mindset. Sikorsky wants to be the smallest fish in the biggest pond – giving him the most opportunity to grow. 

  9. As a young entrepreneur, you will experience turbulence and uncertainty. Sikorsky said that he started he did not have the expertise, he didn’t have a plan, the vision was unclear and yet with permission, he forged ahead. Demographics are destiny, according to Sikorsky, if you can tie yourself to a wave then everything else can be easier. 

  10. Maximizing evidence that you learn per dollar. Are you learning from your mistakes? Are you iterating and making improvements based on your decisions and actions? All of this gets us back to execution velocity (speed and direction), trusting your talent, and iterating along the way. Gratitude is super important. Sikorsky was super grateful for the people that helped him build a successful company. 

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Wang and I asked Sikorsky about the ethical use of technology, specifically innovation in the artificial intelligence (AI) space and use cases for AI for betterment of society. Sikorsky is incredibly smart and his answers to our questions were superbly rich and thoughtful. I highly encourage you to watch our video conversation with Sikorsky. I did my best to capture 10 key takeaways but the video will give you deeper understanding of Sikorsky’s brilliance and advice. 

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