The Essence of a Startup
Jul 14, 2020 by Roger Scherping
In her great Startups.com blog from March of 2018, Emma McGowan talks to a number of entrepreneurs to answer the question, “So what is a startup, anyway?” To me the article really explains the essence of what it means to be a startup.
Eric Ries, the creator of the Lean Startup methodology, defines a startup like this: “A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”
Startups.co Co-Founder and CEO Wil Schroter uses this definition: “A startup is the living embodiment of a founder’s dream. It represents the journey from concept to reality. It is one of the few times when you can take something that is only a dream and make it a reality, not just for yourself, but for the entire world.”
Those are two excellent formal definitions of startups, but the remainder of the article focuses on 20 specific attributes of startups. This section is what I found the most interesting.
A startup is…
- Focused on growth: Its goal is to scale quickly.
- Solving a problem: If you’re not solving a problem, then you’re just an idea.
- A job you can’t live without: A startup is a job you cannot quit, that does not pay, and which you cannot live without.
- More questions than answers: It’s trying (struggling?) to figure out its business model.
- Searching for product/market fit: It’s still searching for that magical slot it can slip into.
- Filling a gap in the market: A startup is any newly formed and fast-growing company or business that aims to fulfill the needs or a gap in a relevant marketplace.
- Changing the ways things are traditionally done: It has a mission or goal to disrupt, change, or enhance the traditional mindset of whatever industry they’re in.
- Starting from scratch: A startup is any business venture that’s starting from scratch and trying to build something of value — that is, the business currently has no revenue.
- A company in its early stages: A startup is a newish company that is the early stages of branding, sales and hiring.
- Not successful — yet: “Startup” implies a phase of the company where success is not yet determined.
- A home for “the crazy ones:” That means the largest group of rebels, rule-breakers, and unconventional thinkers that you can find, convince and inspire to create breakthrough change in the world.
- A mix of emotions: That feeling in the pit of your stomach – is it fear or excitement?
- A company with few employees: Probably less than 10, or you are entering the small business world.
- Working toward an innovative common goal: The definition of startup is found in its goals.
- Lean and adaptive: Startups are heavily defined by their actions and execution, not just their ideas.
- A company with a small user base: The user base is too small to yet be profitable, and a team is focused on development of the product.
- Completely independent: Not a part of a larger entity – there is no backstop to help.
- Searching for a sustainable business model: It is trying to figure out an idea and then execute that idea with the goal of becoming a sustainable business.
- About making change: A startup is the conscious decision to form a group of people with the sole purpose of bringing about change in the real world.
- Prototyping a concept: When you are putting your ideas out into the world — getting feedback from potential customers — you are a startup.
Does that sound like your company? As I looked at my own entrepreneurial experiences and those of my friends, we have all struggled with these issues. With apologies to Jeff Foxworthy …
… If you are still trying to figure out your product/market fit, you might be a startup.
… If you have made multiple pivots on your marketing plans, you might be a startup.
… If you are still trying to figure out how your idea will become a sustainable business, you might be a startup.
Just understand that all of this is perfectly normal. Be prepared to keep adjusting your target market until you figure out exactly where your customers are. In your marketing, just keep throwing things against the wall until you figure out what will stick. Don't stop trying to figure out your business model and how you’re going to make money. And get used to the fact that things aren’t going to get easier for a while because you’re creating something from scratch, and that means that you have to figure out EVERYTHING.
I hope this is helpful. Email me if you have any comments.