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What makes startups so powerful?
According to Eric Schmidt, the former CEO of Google and a seasoned tech executive, it’s their ability to take risks, move quickly, and adapt to change. In this article, we’ll explore Schmidt’s insights on the startup mindset, uncover why young people thrive in startups, and share lessons that even large corporations can learn from these agile, risk-taking organizations.
Photo: Getty Images
The Startup Advantage: Risk-Taking and Speed
Schmidt highlights the defining characteristics of startups:
“Startups, by definition, are huge risk-takers. You have no history, you have no incumbency, you have all these competitors, by definition, and you have no time.”
This lack of resources and time forces startups to prioritize intelligence and quickness over experience and stability.
“In a startup, you want to prioritize intelligence and quickness over experience and sort of stability,” Schmidt says.
Why Young People Thrive in Startups
One of the most striking features of startups is their reliance on young talent.
“Part of the reason why startups are full of young people is because young people often don't have the baggage of executives that have been around for a long time, but more importantly, they're willing to take risks,” Schmidt explains.
Young people bring fresh perspectives, boundless energy, and a willingness to experiment—qualities that are essential for innovation.
Example: Mark Zuckerberg was just 19 when he launched Facebook from his Harvard dorm room. His willingness to take risks and iterate quickly helped turn Facebook into a global phenomenon.
The Power of Flexibility: Startups “Wiggle”
Schmidt uses a vivid metaphor to describe how startups operate:
“Startups wiggle. They try something, they try something else, and they're very quick to discard an old idea.”
This flexibility allows startups to pivot when something isn’t working and seize new opportunities as they arise.
Example: Slack started as a gaming company called Tiny Speck. When the game failed to gain traction, the team pivoted to focus on the internal communication tool they had built for themselves. Today, Slack is a multi-billion-dollar company.
The Corporate Trap: Sticking to False Beliefs
While startups are quick to adapt, large corporations often struggle to let go of outdated ideas.
“Corporations spend years with a belief system that is factually false, and they don't actually change their opinion until after they've lost all the contracts,” Schmidt says.
He points out that the signs of failure are often obvious:
“Nobody wanted to talk to them, nobody cared about the product, and yet they kept pushing it.”
Example: Blockbuster clung to its brick-and-mortar rental model long after Netflix had proven the potential of streaming. By the time Blockbuster tried to adapt, it was too late.
Lessons for CEOs: Fail Fast and Measure Innovation
Schmidt offers advice for leaders of large companies who want to foster a startup-like culture of innovation:
“If you're a CEO of a larger company, what you want to do is basically figure out how to measure this innovation so that you don't waste a lot of time.”
He cites Bill Gates’ famous saying: “The most important thing to do is to fail fast.”
This means identifying and abandoning unsuccessful ideas quickly, rather than pouring resources into them for years.
Real-World Examples of the Startup Mindset
Let’s look at a few examples of startups that embraced risk-taking and flexibility:
Example 1: Melanie Perkins (Canva)
Perkins started Canva after noticing how difficult it was for people to design graphics without professional skills. Despite early rejections from investors, she persisted and built a platform now valued at over $40 billion.
Example 2: Tristan Walker (Bevel)
Walker identified the lack of grooming products designed for people with coarse or curly hair. By taking a risk on a niche market, he created Bevel, a successful grooming brand.
How to Embrace the Startup Mindset
Inspired by Schmidt’s insights? Here’s how you can adopt the startup mindset, whether you’re running a startup or a large corporation:
1. Prioritize Speed Over Perfection
Don’t wait for the perfect solution—test your ideas quickly and iterate based on feedback.
2. Take Risks on People
Hire talented, passionate individuals who are willing to take risks and think outside the box.
3. Be Willing to Pivot
If something isn’t working, don’t be afraid to change direction. Flexibility is key to survival.
4. Fail Fast
Identify unsuccessful ideas early and move on. Use failure as a learning opportunity.
The Bigger Picture: Innovation Requires Courage
Eric Schmidt’s insights remind us that innovation isn’t just about having great ideas—it’s about having the courage to take risks, the flexibility to adapt, and the willingness to fail fast.
As Schmidt puts it, “Startups wiggle.” And in a world that’s constantly changing, the ability to wiggle might just be the key to success.
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