Starting Up by Rebooting Something Old
Most idea-stage startups are recently incorporated entities starting from scratch. They are founded by entrepreneurs who are taking a gamble and putting money, time, and opportunity costs on the line.
However, that’s not the only way to do a startup. Another approach is to reboot an older company that already has a presence in the target market by re-purposing its strengths into a new product.
Last week I had the opportunity to meet with two local guys who are rebooting their company. Talking with them was like talking to any other entrepreneur. They were applying lean principles, they were going through the steps of customer development, and they were searching for product market fit. However, they belong to an older company. They are looking to re-purpose technologies used in their legacy defense-industry business for other markets (like oil & gas and entertainment).
There are many challenges in rebooting an old business. Legacy concerns can be a distraction. Equity ownership may not be allocated sufficiently to the current contributors. Resources may not be adequately provided to develop the new product. Patience with “the new” may run thin. Re-branding may be difficult. And on and on.
But there are benefits in the reduced risk, the existing name recognition in the marketplace, the systems already in place that may be leveraged to scale, the availability of resources.
The biggest consideration is culture fit, to ensure that the culture of the old company is the right culture fit for the new launch.
Rebooting something old may not be the most popular approach, but there are times when it can make good sense.
What older small companies have you seen reboot into something new?