Startup or New Business?

Startup…or is this just another New Business…

Over the weekend, at a Hackathon I was attending, I struck up a conversation with a young entrepreneur I know. He stopped in to hang out for a bit and see what was happening at the event. Now this guy is what I consider an Entrepreneurial Tech Sector Startup. A classic SAAS (Software As A Service) model product. He’s been up and running for over a year, and has a fair number of paying clients. During our conversation, I asked him how the Sales side of it was going, and as he stated…

We have customers, but we could sure use a whole lot more to made it comfortable.

So I asked…what’s the latest issue holding you back. He said they were having success with the small brands and venues, but the large brands and venues were proving to be a challenge. Just too “Risk Averse” to make a commitment to a new company and new product. They all give the same answer…

We’ve tried Startup Products before and either the Company fails and is no longer around or the Product cannot deliver as promised in the timeline promised. Either way we are left hanging!

As we progressed into the conversation, this was the part that really struck me. He said he was really tired of hearing the word “Startup”. I said Tell me More!…
“Every Business was a “Startup”. Take the First guys to build a Flying Machine, the government had been trying to get something to work for years and even with all their resources, two lowly Bike Mechanics from North Carolina were the first to make it work. No one called them a “Startup”. They were known as Inventors, a New Small Business.” I said that I agreed, every new business does Start Up at some point.

I had a small business, at one point in time, that I purchased and built up. Definitely NOT a Startup in my mind or anyone else’s. My wife Started Up a BtoB Services Business from scratch, but was it a “Startup” as the word is tossed around today. Neither of us were strangers to the issues new businesses face every day, some common to every new business that is or has ever been started. I could feel his pain and frustration.

Curiosity Grabs Me Again

The next day, my mind wondered back to that conversation about “Startup”, so I did what any person seeking knowledge does…I asked my favorite Know-It-All…GOOGLE…

Startup vs New Business 

I needed to clarify it better in my own mind. Of all the references presented, this one stuck with me the most. This short 3 minute video of Steve Blank’s definition of what the difference is…not only today…but within the Entrenched Startup Cultural Meccas the average person thinks of when you say the word “Startup”. This was really what my Entrepreneurial Friend was talking about, with the Risk Averse Customer base, Risk Averse Investor base, Risk Averse New Business base. Now I can understand why he stated…

I feel like you Just Have to Get Out of Here to make it work

After watching the video, I was walking around the Hackathon Event, looking at the teams in deep concentration building and iterating their ideas into workable products.  I started to put a few new labels on the concepts they were working on, “New Business Potential” or “Startup Potential”. There is a difference…some in the mind, some in the culture, some in the location, some in the resources available. Every business does Start Up…but every business does not need to be or will become a “Startup”

What it comes down to is that as a City, State or Region trying to foster Business Growth, we need to help get the barriers out of the way and give the Entrepreneurs the tools and resources they need to build and grow their businesses to their level of comfort. Every one of them can create value or at least have the chance to create value. We have to continue to find better ways to Share the Risk instead of Run from it! Everyone will come out ahead in the long run.

 

PS…In case you do not know who Steve Blank is, or just want to learn more, Here is a link to his Wikipedia Page

Please note: I reserve the right to delete comments that are offensive or off-topic.

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