Startup?

Recently, I was asked to open an evening event for an initiative called NL Innovators. This is a short transcript of the topic and slide deck.

After a short self introduction, I asked the audience if anyone could tell me the definition of a startup. One person responded that it was “a new company”.

I find it fascinating that entrepreneurship and startups are very sexy and hip right now, yet we don’t necessarily understand what they are.

I then shared four quotes of people/companies which are extremely influential within the entrepreneurial world:

Steve Blank wrote the book on modern techniques for building businesses and then went ahead and re-wrote it. It’s not for nothing that he’s known as the godfather of modern entrepreneurship.

A startup is an organization formed to search for a repeatable business model.

Eric Ries is the protégé of Steve and wrote the book on how to create a lean startup.

A human insitution designed to create something new under conditions of extreme uncertainty.

Paul Graham founded YCombinator, a seed level startup accelerator with over 500 startups to its credit. Including AirBnB, Dropbox, Reddit and Disqus.

A startup is a company designed to grow fast.

The Kauffman Foundation is the largest foundation which focusses on entrepreneurship.

A startup is any firm that’s younger than one year.

I find it bizarre that all of these entities have such a wildly different definition of what a startup is.

Mark Suster, a Silicon Valley entrepreneur turned top tier venture capitalist has a slightly different perspective. It’s all of the other definitions we see here, as well as “to aim at changing a small corner of your world or industry. Or your life.”

“…to aim at changing a small corner of your world or industry. Or your life. And I applaud all of you who try.”

I’m inclined to agree with Mark. Rather more, I’m in no position to disagree with any of the above statements, which leads me to conclude that a startup is what you make it.

Entrepreneurship on the other hand, is much better defined, and tends to fall into two fairly distinct categories, Small/medium sized enterprises and Innovation driven enterprises. The differences aren’t subtle, and despite the Silicon Valley snobbery, both are incredibly important to the world.

The motivations and consequences are usually starkly contrasting

The difference of their impact is most obviously seen in terms of revenue growth.

To understand what an innovation driven company really is, we can consider that if, just ten years ago, I told you in a whatsapp that someone Facebook messaged me a photo they found on instagram, via twitter, and I’ve synced directly in your dropbox, you would have thought I was insane. More to the point, had I described each of these services to you, you would have thought those founders were insane.

And now their products have become so engrained in our lives that they have become verbs.

So now we know that these two types of entrepreneurial company are different, and need to be treated very differently - and yet, actually, there are a lot of similarities.

The most obvious similarity, is that they both create jobs and provide economic stimulation. Established companies, particularly those more than ten years old, have been firing faster than they are hiring, causing a net negative impact on the global job market. Startups on the other hand, by default, have a net positive impact on the job market.

At the same time, like the moth and butterfly, the origins of both types of company (SDE/IDE) are also the same. A person or group of people have some form of revelation, inspiration or idea.

This is the begining of a journey that not everyone will take, but for those who are curious and courageous, what comes next?

This is a recipe for entrepreneurial success:

And yet, just like you cannot expect a child to ride a bicycle after watching videos on YouTube, this recipe itself is useless without support and nurture.

It’s our job to educate the entrepreneurs of tomorrow - but not just in a class room. It’s our job to facilitate that these experiences can be real and not simulated. Like many things in life, entrepreneurship is learned much better by doing it for real. It’s also our job to get involved and be active - not just point people in the right direction and push.

We also have as much to learn from these people as they do from us.

And that’s the very foundation of the NL Innovators proposition.

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