A startup is not a smaller version of large companies

People treat Startups like a large company. They use the techniques and strategies that they learned in big companies and apply them for startups. It doesn’t work that way. Even the things that I learned in the MBA don’t apply to what I’m doing right now!!

The major difference between large companies and startups is that startups are based on assumptions, nothing is proven yet. You think you know your market, your customer and your revenue model…etc. However, the truth is that all of these are just assumptions that need to be proven. In contrast, in a large company you know your market, customer and how to make money and you are ready to execute on them.

Business Plans are execution plans they work great for large companies, but they will destroy your startup. Startups should use Business Model Canvas instead. They should understand their assumptions and move towards validating them. Once they are 100% validated, the startup is ready to execute.

I made this slide to illustrate the differences between a startup and large company. You can also find it here

Most of the content above is based on the thoughts of the guru of Startups Steve Blank. You can also find more about this subject in Steve Blank blog