Digital Strategy for Startups –Then and Now

The thought-starters on the editorial calendar for this month’s column were “Start-up Nation,” “Self-Starter,” “What does it take to really start a business?; What must be in place legally?;” and “Succeeding Against all Odds.”

This gave rise to a variety of thoughts, including the evolution and revolution of start-ups over the past 30 years.  Computing and connectivity have played major roles in this. Digital rethinking and recasting, the once creeping and then supersonic speeding of technology into so many aspects of business and life, has prompted new business ideas, seemingly more each year.

This evolution mirrored the growth in the technologies themselves.  In the early 1980s when IBM introduced the IBM PC, the very earliest of home-grown programs were, in fact, start-up businesses. Garage or basement operations, small cottage industries, they made a mark of sorts.  As is the case in these affairs, many perished, a few persisted with great success, and others found it better to join forces and offer a bundled package than to go it alone. Or to purchase other small operations, adding them to create a bundle to round out a product offering.

Small though that may seem, those were mergers and acquisitions.

By the mid-to-late 1980s and early 1990s a significant level of sophistication and maturity had been reached. Digital and technological products and services for both the large enterprise and small and medium businesses, as well as home and personal use, rapidly developed from a minor category a into to a major financial force. Companies large and small entered the market.

And thus this flurry of inventiveness, innovation and disruptive thinking paved the way for hundreds upon hundreds of new start-ups.

But how many would find success? And how has the game changed between the early 1980s and now?

For a deeper look at these questions we interviewed Stuart Leudan.  He’s a recently retired corporate attorney who also served as President of a Technology Incubator for 10+ years working in the Technology and Communications industry and as well as other emerging digital technology companies.

“Back in the 80’s starting a company was pretty easy. Your lawyer drew up relatively standard documents and you were on your way. Partnership agreements might have taken some time to negotiate, they usually do, but for the most part, things were pretty straight in those days.”

He added, “When it came time to raise capital for those start-ups back then, the pool of investors was very different. I’d represented a good many real estate people in my practice, and knew other lawyers and accountants. Finding interested, qualified investors was not so hard. There weren’t a thousand deals a week floating around, or VCs in the financial pages and on the news every day.”

He went on to say, “Thirty years ago there weren’t a lot of what we know now as angel or early stage investors. They didn’t know the kind of question to ask that are standard now. Lawyers and accountants were expected to vet the company. Investors put money into deals if they thought it was smart. It could or could not scale, maybe, maybe not. The management team? Maybe smart, maybe not. The same goes for the investor team; they might have been smart at running their companies, but the new companies, especially in tech and communications, were out of their areas of understanding.”

In the course of the interview and exchange of emails we discussed the changes technology and digital disruption have had on startups and the business world.

In 2018 start-ups must have a thorough digital strategy. This includes sharp legal and sound business operations advice. Thirty, even twenty years ago, these issues were not as technology or connectivity driven as they are now.  Intellectual Property has taken on a new meaning and level of importance with software so prevalent among many start-ups.

“Communications and internal security is a concern and a business development issue now given great consideration,” Leudan said. “Technology has made the world smaller. But that’s constricting. You cannot get away from it. It used to be if employees were traveling, you could not get in touch with them.  At best you’d wait until they could get to a payphone. Now? If there’s a delay, you know it before the plane lands, and you can call them on their cell phone before they’ve gotten off the plane to talk about rerouting them or making other plane.”

He went on to add about security within a company, “Now everyone has an email address, a company email address. But if I use my personal cellphone for work, or use it to send work emails, it makes it less secure. It used to be easy to compartmentalize information, not like the sharing economy or collaborative workspaces to the extent we have today.  More people now work in teams, in groups – these are good things – but things more than ever are complex, and it’s complicated keeping these complex items secure. We live with greater immediacy now. No longer are we waiting for things in the mail, or for a fax and taking time to review and fax it back, which might be a day or three.  Collaborative tools now on documents, whiteboards, tools created in real time, across geographies, can contain -digital signatures.” 

He observed that how far these concerns can go can depend heavily on the stage a startup attains.  “To keep employees, suppliers, vendors from knowing higher management concerns, it becomes more challenging. Usually too many people have access. If a company is doing or even contemplating an IPO or a merger, access to this information and any delicate data that may be shared must be restricted. This is difficult to do in the environment we now face.”

Back to the editorial calendar questions: “What does it take to really start a business?; What must be in place legally?;” and “Succeeding Against all Odds.” Stuart Leudan had this to offer.

He addressed a common bugaboo that afflicts many start-ups, the need for management, marketing and financial guidance. “After 40+ years of practicing law, running an incubator and advising countless companies, I keep seeing entrepreneurs, people with great ideas. People who can write code, connect things, create brilliant disruptive concepts. But the vast majority of them don’t know about running a business, or appreciate what lawyers and accountants do, or understand the process of bringing a product to market.  Bringing in professional help in these areas is crucial to success. Legal, financial, and go-to-market are make-it or break-it for start-ups. Otherwise they’re just a good idea sitting on a shelf that didn’t get anywhere.”

 “Our winning clients, winning companies in the incubator, were the ones that followed our program. They had to bite their lips at times, tighten their belt, and accept outside help that was foreign to them. It was common among many of them to think that their product was so good it would just meet with super success right out the door. We would build in long-term planning, contingencies, competitive strategies, and the tools for success to complement their products and services.”

“Winning means facing up to the fact that outside help is necessary. And then listening to it. Bringing in advisers like me, lawyers and accountants, then consultants and digital strategists and marketers like you.”


As a side note to the above, I met Stuart Leudan two decades ago when a company I was advising brought a product to a company in his incubator to propose a joint venture. We shared a big picture world view and a common business sense, and have stayed in touch ever since.

 (disclaimer: Stuart Leudan and I have known each other for decades)

Dean Landsman is a NYC-based Digital Strategist who writes a monthly column for PR for People.





Dean Landsman

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