When starting a new venture, prior related experience can pave the way to business success. Prior experience provides required know how that helps avoid pitfalls and leads to doing more things right. Without appropriate know how, a fledgling business is prone to making erroneous missteps. And, too many of those wrong moves can ultimately derail the business.
Thus, a business is more likely to thrive if it has or can obtain more of the needed know how. This often comes from previous experience. Without experience, large time and expense investments can be needed to learn how to make the business successful. The right experience can minimize the need for this kind of huge learning investment.
That’s why companies may try to recruit outside expertise that provides the know how not available internally. Yet, newly brought in outsiders may not always be a good fit for the organization. Nonetheless, since businesses do benefit from experience, there is value in finding ways to effectively bring in that experience. But, it is important to make sure that what is brought in fits, not distracts, from the strategy behind the company’s business model.
An interesting way to gain valuable expertise is discussed in the August 22, 2022 Wall Street Journal article “Tech Startups That Work Near Each Other Benefit From Social Interactions” by Cheryl Winokur Munk. The article reports on a study of startup businesses that were co-located with other startups. The study was done by researchers at Harvard, the Georgia Institute of Technology, and the Massachusetts Institute of Technology. Offering a recommendation to tech startups, the article says, “Set up shop near another tech startup, preferably one that isn’t in the same business.” “The benefits of working closely include the ability to quickly implement ideas that are working well for other companies,” the article reports about the findings from the study.
In my view, as someone who has been researching business success patterns for more than 25 years, there are important lessons to remember here. A business needs a certain amount of know-how in order to succeed. Much know how comes from previous experience. So, finding ways to compensate for missing pieces of experience can be very useful. Thus, learning from the experiences of co-located businesses has value.
However, just like with recruiting talent from outside, the business must make sure what it adopts from other companies does, in fact, fit its strategy. Keeping fit in mind, businesses should take advantage of available sources of know how, and this can include learning from co-located companies.
