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Why A Startup Is Not A Big Company

Posted by: Wendy Torrance on January 22, 2014 Source: e360 Blog

Wendy TorranceOnce you've heard the insight--that startups are different from big companies--it seems so obvious. Yet too often entrepreneurs, and those that teach them, approach the building of new companies with the same goals, staff structures and assumptions that motivate the management of large companies. Startup founders build teams to focus on engineering, and on the process of creating a product and bringing it to market. However, it is important to understand that startups really begin in search mode, not execution mode. The distinction is crucial, and it can vitally inform the activities of startups and their teams.

The process, in the beginning, is one of customer discovery and a search for the right business model. The startup team is analyzing product-market fit. Do customers actually want the product or service you have in mind? Do they want it with the features and functionality you have in mind, or do they want something different? This process of customer discovery requires a different mindset on the part of the team, and a view of their roles that stress flexibility, an ability to shift gears, and a contribution to learning. As this process unfolds, it is important for founders to consider whether they’d like to grow with their startup (that is, grow their skills that position them to guide the build and execution phase) and how they can assemble the right team to join them.

Kauffman Founders School presents startup expert Steve Blank, a Silicon Valley-based serial entrepreneur, educator, and author to discuss what we know and what we can learn about the unique characteristics of startups. Steve, who teaches entrepreneurship at Stanford, U.C. Berkeley, Columbia University, Caltech, and University of California San Francisco, developed the customer development model to help founders tackle the early-stage challenges of a startup company, with a view to create a thriving company that meets a strong market need with the best possible product.

In our series “Startups” Steve addresses crucial topics to consider when building a startup. First, what exactly is a startup? What do we know about its goals and why is that knowledge important? And, how are startups different from big companies? The series includes an introduction to the lean (customer development) method, and elaborates on how founders who seek early contact with customers gain insights that are invaluable in the vital development stages of a startup. “Building Your Startup” offers suggestions for how a founder can gain skills and knowledge that will allow him/her to stay with the company through the build and execution phases. Finally, the series addresses one of the most challenging questions an entrepreneur may face: how do you figure out if the path you’re on is the right one?

In the coming months we’ll feature Steve in a second series that explores the process of customer development in greater depth: watch for this series entitled “The Lean Approach”.

Explore our series “Startups” today. Learn how you should think about the goals of your startup and the role you play within it. Understand the basics of the lean method, and learn how you can grow with your startup and how you can make the difficult decisions about whether and how to proceed once you’ve gathered those critical customer insights. Finally, ask yourself the pivotal impact question: How can what I’ve learned today change what I do tomorrow?

Tags:  startup, big company, Steve Blank, temporary, Kauffman Founders School, new series, differences, building a startup, pivot, proceed, skills, CEOs, customer development, lean method, getting out of the building, MVP, business model, business plan, metrics, product market fit

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