Stop Thinking Like A Startup

Cash Register CC HIstorias Visuales Stop Thinking Like A StartupIn my last company I was motivated by a desire to help people, but I didn’t think of it as a business. Until it was too late. I was thinking like a startup founder, not the owner of a business.

Enough pivots and we would find traction where others had failed. We were special.

These are the delusions of a startup founder. Business owners don’t think this way. At least not business owners that grow successful organizations.

Healthy businesses make money

It was near the end of the road when my co-founder told me, “The health of your business is measured in money.” Ideas and altruism meant nothing in the world of business.

This blog is part of a Startup Edition series on Lessons Learned Building Startups

I thought that was a pretty crude statement at the time. Now I embrace it whole-heartedly. It’s why I love ugly companies. They lack the razzle dazzle of consumer applications, but they solve problems that matter for business users with deep pockets.

Steve Blank says

 

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

A business model that is scalable. And repeatable.

Nowhere in his definition of startup does Blank say that a startup is a group of young men burning the candle at both ends, running up debt, alienating family and friends and missing out on life. When we think like startups we assume that these are the necessary actions that lead to success. They’re not.

Startups have become glamorous due in no small part to the high profile exits created by the Facebook IPO, Twitter’s recent Wall Street debut, and the $1 billion+ acquisition of Tumblr by Yahoo! It’s a gold rush. And here’s the secret, the only people who consistently make money in a gold rush are suppliers selling shovels, denim jeans and mining equipment to the prospectors. The people selling the startup dream are cashing in.

Stop thinking like a startup

We’ve been hypnotized to believe that startups are some alien form of business that does not abide by Earth-bound economics. Nothing could be further from the truth.

Startup entrepreneurs are not heroes. We’re just risk tolerant. And maybe a little crazy.

If you’re selling lemonade, your business model is to produce a cup of lemonade at a price higher than the inputs–sugar, lemon juice, water, cups, etc. With so much VC money sloshing around Silicon Valley (Series A Crunch or no), Bay Area techies often get a pass when it comes to putting on their entrepreneur hat.

If you’re not building something people are buying, you’re a hobbyist. You’re not running a business. What you have is a science fair project on the Internet.

Building Internet companies is great. It can be fun, rewarding, and it’s always unpredictable. But the sooner you stop thinking like a startup founder, and treat yourself as the owner of a business, the sooner you can create the impact you want to make on the world.

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  1. Stop Thinking Like A Startup | StartupTips | Sc... - November 25, 2013

    […] Startups are businesses that make money. Otherwise they're hobbies. Expensive ones.  […]

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