This fall, I’ve been speaking at a variety of tech and startup events at Danish universities. It’s been quite educational – for me and for them.
First stop on my university tour was Copenhagen Business School and their CBS Entrepreneurial Event, where 15 startup companies pitched their business concepts, followed by DTU High Tech Summit at the Technical University of Denmark, where 5 startups fought for the first prize. I was in the jury of both competitions, and I was proud to present the Milestone Award to the winners, a cash prize and a mentorship with Milestone’s Executive Management Team.
So why does Milestone Systems commit to supporting startup companies at Danish universities? I strongly believe in supporting a strong and sustainable community of innovators and entrepreneurs. We are going to depend on these people to be the ones who will develop the technology of the future and whom we will hire.
I was here when Milestone Systems itself was a startup company some 20 years ago, so I believe I have some useful advice for these young millennials, both in terms of the things I did right and the mistakes I made and learned from in the process.
Purpose and Culture Make Progress
At first, being a startup company is a bit like a roller coaster ride: it’s fast, it’s overwhelming, but above all it’s fun! And you never doubt why you started the company in the first place because you know your idea is unique. The question is how to maintain this entrepreneurial spirit and passion and at the same time grow the full potential among your employees? I believe it boils down to three things: establish a purpose, define a culture and ensure progress – also in the long run.
Purpose, or ‘the why’, is one of the most important parameters. If you haven’t got a purpose, you have no direction and that makes it difficult to create a successful business. A company driven by profit alone often focuses on resource management, while a company driven by a clearly defined purpose inspires people, and generally these companies have a stronger business compared to others. Over a ten-year period, purpose-driven companies outperform their counterparts in stock price by a factor of 12. It’s about enabling the company and its employees to understand and communicate the purpose.
What is culture, really? Do you have culture in a startup or is it something that grows over the years? Can you decide on a certain culture or is it something that comes about naturally? I don’t know the simple answer to this, but I know how it works at Milestone.
I decided early on to lead Milestone Systems based on a Scandinavian Management concept, meaning an uncomplicated, non-hierarchical organizational structure and an open feedback culture that supports the employees, giving them the courage to challenge status quo, and by this, challenging the management team. It also means challenging your colleagues, to push them over the established edge, enabling them to challenge themselves. Only by challenging yourself is it possible to see things in a new light and come up with new solutions and ways of doing things. It worked at Milestone, when we were young, and it works today, 20 years later.
A company needs to grow, that goes without saying, and growth should be visible to the employees, so they can feel part of the success. But it’s also about progress for the individual employee, ensuring they have a career that is meaningful to them.
An example: A couple of years ago, we decided to create a sandbox for our innovation team. We set them up as a company within a company and told them “you’re in charge of your own destiny.” We called them the Innovation Business Unit. We gave them their own budget, their own employees and their own location in Silicon Valley. And trusted them to come up with new, ground-breaking ideas.
It worked. They delivered two ideas in three years: Milestone’s Husky Network Video Recorder that transformed our business by enabling us to enter the hardware appliance segment. And Arcus, a new concept to provide a cloud-based enterprise video surveillance service. Arcus is a great idea, but it was outside Milestone’s core business model, so we turned the team into a startup.
Summing up: Purpose, Culture and Progress. That is what I advise startups to focus on when they enter the phase where they need to transform ideas to sustainable business. And this is advice that established companies also need to live by.
So what did I learn during my university tour this year? I gleaned so much, especially to experience the boldness that characterizes the startup community. I will now have a hard think about whether Milestone still has this boldness. And if we don’t, how do we get it back?
By Lars Thinggaard, President & CEO, Milestone Systems