Are startups conventional business?
Having watched the rise of the startup scene over the last decade, we might ask ourselves: Is there more to this phenomenon than being a new way of making fast money? OK, the answer is obvious: Of course there is! Startups are young, hip and exciting; all ordinary business is not.
So we can’t help but wonder: Why can startups oppose conventional business and work? How does it affect society? To find out about that, we have to understand: How do economy and society relate?
Work – more than just working
According to Karl Marx, work is more than production: It is a “life-activity”, the basic way we engage with our social and material environment. That is why the economy – money, staff, technology and ideas – is the driving force of social change. In the long run, it determines the outlook of society, its politics, laws, and most importantly, the distribution of wealth. But how?
Marx’s answer: Society is all about conflict! The proletariat is the dominated class exploited by the profit-oriented capitalists and alienated from the joy of production due to repetitive and standardised factory work. One class is doing the work while the other gets the benefits. Fortunately, with growing social strain, the proletariat unites and is able to overthrow the rule of the bourgeoisie.
How does the startup scene fit into this picture, though? Startups challenge the conventional ideal of business and work. They question big business, hierarchy, the 9-to-5 work day, social insurance, job security, etc. Their enemy is the dependent employer, populating the suburbs and enjoying the advantages of a secure and well-paid job.
Startups are independent entrepreneurs located in big cities and metropolitan areas. They don’t do what a boss tells them to do, but try to make something happen. That means scanning the market – figuring out what people want – creating a product and trying to launch it as quickly as possible. Those people are crazy about what they are doing and don’t mind working some extra hours to cut costs and keep deadlines.
Why can startups oppose conventional business? Startups sell new kinds of products that require a particular way of working. In order to develop, say, a smartphone app, you only need a small team, basic equipment like computers, and someone with programming skills. But most importantly: You have to know what people want. That is why there is so much talk about the potential value of an idea. A good idea will get the necessary capital, staff and infrastructure, not the other way around.
This has major consequences on how people work: You are often willing to go on with no pay for quite a while. Thinking out of the box is a must and your fellow startups are not your competitors. Everyone is part of the same movement, probably even hanging out together in fancy coworking spaces. Here, the functional business interior is replaced by modern or retro furniture, carefully picked out and nicely played to the gallery. We all know that companies often force their employees to work so much, they end up eating and even sleeping at the office. Creating a hip and homelike atmosphere, startups actually make people want to do all that!
OK, startups do have a different style of working but in what way does this change society? By promising autonomy and focusing on one’s creativity, the young and well-educated are likely to start a career in this field. Of course not everyone will end up in a startup, but many companies will follow Google’s lead trying to become a “fun house” in order to win the race for high potentials.
The world of economic capital is another area challenged by startups. Compared to traditional businesses, young entrepreneurs usually do not have the money or financial credibility to realise their ideas. Economic success can hardly be predicted: The truth is, trial and error are part of the game and often the unforeseen pivot makes all the difference. Creating new ways to fund their projects – you might think about crowdfunding or business angel networks – startups are beginning to change the financial market. Even high ranked politicians are starting to see startups as an area of new revenue and job opportunities.
But how extensively has society been modified by the startup scene? Can anyone become an entrepreneur now? At first sight, startup businesses appear to offer high chances for everybody in this respect – due to a general ignorance towards standard education and diverse possibilities of funding. However, as sociologist Pierre Bourdieu illustrated, the distribution of wealth and power in contemporary society is not limited to “economic capital”. Success has become increasingly related to whom we know (“social capital”) and what we know (“cultural capital”). In addition to business and technical skills, it is your ability to connect with other people and your knowledge about culture and taste that make you a successful entrepreneur. Startups rely heavily on such social and cultural resources because their ideas and products are a result of everyday experience. As some in the scene ironically admit, there are people who already have the resources, others don’t.
The entrepreneurial self
Clearly, a lot has shifted: But it is not so much a social revolution we are observing but the evolution of a new personality. Today, the business world is characterised by an entrepreneurial self, as Michel Foucault put it: an active, autonomous and self-reliant individual.
Not being controlled by others, the entrepreneurial self has incorporated a tight and extensive regime of self-control. Since each project is based on one’s own ideas and hard work, it is only natural to be prone to a high degree of self-exploitation. But it doesn’t feel that way. People seem to be having a good time thanks to occasional foosball breaks and office parties.
About the author:
Alexander Hirschfeld is a 29-year-old sociology Ph.D. candidate who has studied, worked and lived in Bamberg, South Carolina, Vienna and New York. His doctoral thesis is on the changing perception of the human psyche, which he investigates by analysing the emergence of the so-called Burnout Syndrome. His main interest lies with sociological theory, which means lots of reading and knowing the nicest libraries in every city by heart. Apart from that, he enjoys cooking, soccer and watching the same old movies over and over again. Alex lives in Berlin.
Read more about the origins of the “From the sociologist’s notebook” series by our co-founder: Introducing: From the sociologist’s notebook
Here is the rest of the series:
Part I: The habitus of IT entrepreneurs and startup geeks by Manon Pierre
Part II: Commitment turned commodity? by Alexander Hirschfeld
Part III: Is God an Entrepreneur? by Alexander Hirschfeld
Part IV: Startups, buzz, and glory by Manon Pierre
Part V: Is the party over? Startups and the experience society by Alexander Hirschfeld
Part VI: One startup culture for all? by Manon Pierre
Part VII: A favour you can’t refuse by Alexander Hirschfeld
Part VIII: An unbalanced relationship – startups and investors by Alexander Hirschfeld