What is sauce for the startup goose…

…may not be sauce for the startup gander

Tech startups tend to seek out other startups like birds seeking a flock. At the beginning, they are like all hatchlings — more or less the same as each other. But, this phase does not last. Once a startup begins to grow, it will develop the distinctive plumage that sets it apart from others.

The growth phase brings its own challenges. Tactics that worked during the early experimentation phase do not work as well now. The advice they receive from others is less applicable. The unique characteristics of each company can no longer be ignored. Benchmarking themselves against other teams, and learning from others, become less easy.

The startups not of a feather…may not flock that well together!

What now? Startups have to continue seeking comparable groups to learn from. What makes another startup comparable to yours? The answer is a shared operating context.

What defines the operating context of a growing company? Three factors — sector, user base and pricing model.

The Sector

The easiest factor to identify is the sector a startup operates in. Examples abound — ‘Healthtech’ or ‘Adtech’ or ‘Traveltech’.

For example, all these companies operate in the health sector:

Sleepio - scalable CBT programme for sleep disorders delivered online
Ginger.io - offers personalised care for anxiety and depression.
Speakset - helping healthcare providers deliver remote care via a TV set
Babylon Health - medicine via mobilephones, revolutionising remote care and triaging
Zocdoc, Docplanner, Zesty - find and book appointments instantly with clinicians rated by other users
Circular Wave - Connecting healthcare providers to their workforce for optimal work planning
Propeller Health - sensor-based Asthma and COPD management
Fourteen Fish - Appraisal toolkit and learning diary for clinicians

They will all need to know about trends and advances in the health sector. Many of these will have the same customers, purchase decision makers and influencers. Some may compete against each other in the future, while others may find chances to cooperate.

Sector makes just one of the factors that define operating context. Next up is:

The User Base

The users they serve set startups apart as much as it draws them together. Each user group has its own behavioural drivers, needs and expectations.

Some of the products listed above focuses on the same users.

Users are consumers/patients — Sleepio, Ginger
Users are consumers and clinicians — Babylon, Zocdoc, Docplanner
Users are healthcare staff and clinicians — Circular Wave, Nomad
Users are consumers and healthcare staff — Speakset
Users are clinicians — FourteenFish
Users are consumers and (possibly) employers — Propeller Health

A consumer product in healthcare has a lot in common with a consumer product in a different sector. Circular Wave is a workforce-planning tool used by healthcare staff. So, it will have similar challenges to other productivity tools aimed at enterprise users.

Finally, the operating context is shaped by:

The Pricing Model

Companies that share a pricing model often share the same user acquisition challenges.

Subscription-based products face the same challenges — be they in healthcare (e.g. FourteenFish) or in entertainment (e.g. Netflix). An on-demand healthcare product (e.g. Docplanner) will be much like on-demand products in other sectors (e.g. Handy, Zipjet). Sponsored services, which are free at the point of use but paid for by an employer for instance, (e.g. Propeller Health) often face the same challenges as other sponsored services like Perkbox. And so on.

Finding your flock

Match 2 of these 3 factors to find other companies with the same operating context. Once you find these, you will have found your rightful cohort to benchmark against and learn from.

​Building a successful startup is hard enough as it is — flying with the wrong flock can only make it harder!

(Disclaimer: All descriptions of the named startups are observations based on publicly available information. If you spot an error, do let me know and I will be happy to amend).

Photos by By Andreas Trepte / CC BY-SA 4.0, composed into a collage.