What is the difference between business, entrepreneurship and startups?
Entrepreneurs run new businesses vs businessmen/businesspeople who run businesses, old or new. Entrepreneur-run new businesses are of two types: Startups and MSME (Micro Small & Medium Enterprises.) MSME, like salons, gyms, dairy farms, software houses, digital marketing firms, web design firms, and freelancers are usually relatively risk averse, service-oriented, lifestyle businesses, which grow to a certain size, depending on preferences of owners. Note that just because a firm creates digital content or does programing, even at a world class level, does not make it a startup; it can still be a tech SMSE. Owners usually own 100% of the business and if they seek funding, its in the form of credit or maybe grants, if they are a non profit.
On the other hand, startups are risky, innovative, and product-oriented. They abstract their business model and seek to scale over time. They obtain equity investment, in the form of angel or Venture Capital to fund product development and market expansion, and therefore the ownership/equity share of founders dilutes over time. They may also qualify for innovation or R&D grants. Chaye Khana is an MSME; McDonalds was a startup, before it grew up.
The key differentiator between a startup and an MSME is scale. So how does one discern scale potential in a startup? After all an MSME can also express intent to scale. The litmus test is that startups abstract their business model in a way that it can be replicated. This abstraction could be in the form of “franchises”, like McDonalds Restaurants, EasyPaisa Mobile Payments Retailers, and Sehat Kahani Telemedicine Clinics, or it could be expressed in a product, such as the Apple iPhone, LMKR Geographix, unconventional hydrocarbons E&P software, and Mauqa UI for the illiterate, or it could be expressed in the form of specialised services like in the Google Search Engine, WebHR, and Telenor mAgriculture, a farmers information network. I use “products” to refer loosely to all three categories.
Startups can disrupt the way people live, work and play: For example, Rozee.pk, like monster.com, changed the way employers hire, Careem, like Uber, is changing intra-city travel, EasyPaisa fixed domestic remittances in Pakistan, AirBnB is fixing housing for travellers that limited hotel space cannot address. These are also examples of Tech Startups, because unlike McDonalds, tech is core to their business models. Innovation is now coming through tech like Artificial Intelligence, Internet of Things, and Augmented Reality, which together with other such tech, is sometimes called 4IW, Fourth Industrial Wave.
Entrepreneurs run new businesses vs businessmen/businesspeople who run businesses, old or new. Entrepreneur-run new businesses are of two types: Startups and MSME (Micro Small & Medium Enterprises.) MSME, like salons, gyms, dairy farms, software houses, digital marketing firms, web design firms, and freelancers are usually relatively risk averse, service-oriented, lifestyle businesses, which grow to a certain size, depending on preferences of owners. Note that just because a firm creates digital content or does programing, even at a world class level, does not make it a startup; it can still be a tech SMSE. Owners usually own 100% of the business and if they seek funding, its in the form of credit or maybe grants, if they are a non profit. On the other hand, startups are risky, innovative, and product-oriented. They abstract their business model and seek to scale over time. They obtain equity investment, in the form of angel or Venture Capital to fund product development and market expansion, and therefore the ownership/equity share of founders dilutes over time. They may also qualify for innovation or R&D grants. Chaye Khana is an MSME; McDonalds was a startup, before it grew up.
The key differentiator between a startup and an MSME is scale. So how does one discern scale potential in a startup? After all an MSME can also express intent to scale. The litmus test is that startups abstract their business model in a way that it can be replicated. This abstraction could be in the form of “franchises”, like McDonalds Restaurants, EasyPaisa Retailers, RiseMom DayCare Centers, Sehat Kahani Telemedicine Clinics, and Buksh Foundation Village Incharges, or it could be expressed in a product, such as the Apple iPhone, Aero Craft Engine, Orbitz AR mobile education app, LMKR Geographix, and Mauqa UI, or it could be expressed in the form of specialized services like in the Google Search Engine, WebHR, Telenor mAgriculture, Autosoft mobile wallet engine, and BeautyHooked salon services. I use “products” to refer loosely to all three categories.
Startups can disrupt the way people live, work and play: For example, Rozee.pk changed the way employers hire, Careem is changing intra-city travel, EasyPaisa fixed domestic remittances, AirBnB is fixing housing for travellers that limited hotel space cannot address. These are also examples of Tech Startups, because unlike McDonalds, tech is core to their business models. Innovation is now coming through tech like Artificial Intelligence, Internet of Things, and Augmented Reality, which together with other such tech, is sometimes called 4IW (Fourth Industrial Wave.)
The leaders selected in this list are either CXO of Tech Startups, or CXO of Corporations, where they are leading tech product innovation, or CXO of incubators that focus on tech startups, or CXO of funds that invest in tech startups, or CXO of media firms or popular media programs that project tech startups, or CXO of Government organizations that help tech startups. In most cases these leaders are not techies and neither do they have to be to lead tech innovation. Steve Jobs was not a techie. Brian Chesky of AirBnB is not a techie. Meg Whitman, former CEO of eBay, who took the company from just $4 million to over $8 billion in annual revenue, is not a techie.
MSME are a backbone of the economy, and 4IW is trending work toward a “human cloud” where work is discovered, assigned and performed through gig exchanges. Tech Startups revolutionize the economy and take it to a new level; the five most valuable corporations in the world were tech startups. Both are important.
