Eh! Do I Have a Business or a Startup?
Posted on May 5, 2008
Filed Under Startup |
Answering this question has nothing to do with longevity, yearly revenue/profitability, funding received, or the size of the staff – it has everything to do with being at the cutting edge of innovation.
Innovation is the main distinguishing factor that propels all other distinguishing factors between a business and a startup.
So What are Those Other Distinguishing Factors?
- A Startup is built from nothing based on innovation and thin air. Vs. A Business is built from nothing based on established concepts, models, and examples.
- A Startup is focused on development of specific innovation/technology/product Vs. A Business is focused on sales and marketing to acquire clients
- A Startup is established on assumptions that need to be validated Vs. A Business is established on confirmed notions
- Startups are built from gaps that exist in businesses and markets
- Startups fulfill unmet needs Vs. Businesses cater to current needs
- A flourishing startup grows up to become a business or to get acquired by a successful business – and than the cycle starts all over again.
- Entrepreneurs create startups Vs. Businessman/woman run businesses.
What other distinguishing factors can you think of??
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2 Responses to “Eh! Do I Have a Business or a Startup?”
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The 37 gang (well, Jason that is) wrote this post several days back:
http://www.37signals.com/svn/posts/997-start-a-business-not-a-startup
With that post and yours, I have to say, I dance in the middle. I see Jason’s points of thinking a start-up is a business and yours that a start-up is a start-up. I think for a start-up to be successful, you have to balance both. A start-up should be driven by passion and not by business, business aspects have to be there. I’ve seen my fair share of unplanned attempts at growth and all start-ups (even though some may not admit to it) want growth. There has to be some semblance of a business plan. If you don’t have an outlined vision, you just end up treading water.
Of course, if it becomes too much like a business, then it loses that “ping pong table-wii playing-fose ball competition” madness that is a start-up.
Jason,
I strongly believe that startups need to have a plan for growing into a business…it technically used to be the flow of things but in the last few years we’ve seen a great deal more M&As (mergers and acquisitions) The quick M&As have caused a surge of projects, applications, and features to be called startups - when they are not.
You must use a business mindset in your startup - it ought to be that mindset which made you think of the new innovation to begin with because you saw a need and a market for it - which is all business 101.
Cool tech does not equal a need or justify a market. An example is twitter…it’s been thus far a cool application but it doesn’t really fit what a startup is and it certainly isn’t a business.