“A startup is the living embodiment of a founder’s dream. It represents the journey from concept to reality. It is one of the few times when you can take something that is only a dream and make it a reality, not just for yourself, but for the entire world.” (Wil Schroter, Co-founder and CEO of startups.com)
When it comes to defining the term “startup”, people come up with the most creative answers – which are all suitable in some way. The revenues, profits, and employment numbers shift drastically between different companies and industries. Therefore there are no hard and fast rules on defining it. What Schroter describes in the quote above is a nice yet rather broad definition. But what exactly differentiates a startup from a small business or a corporation? And what are the main values and the work ethic it represents?
Startup, small entrepreneurship, or corporate?
Startups are companies that find themselves in the early stages of their development and are focused on growth. This represents the main difference to small entrepreneurship: a startup wants to expand, while a small business usually intends to stay small. In contrast to bigger-sized corporates, startups moreover enter industries without any pre-existing resources, experiences, and capabilities.
Challenges and Opportunities
Startup companies may have to face a lack of access to personnel and financial capital. They also tend to have less experience with related technologies or capabilities to manage growth initiatives. So they are more dependent on the external environment to receive financial capital or other resources that are required for growth.
A startup is basically starting from scratch, which implies heavy challenges and risks. However, they also have their advantages compared to bigger-sized corporates. They benefit from less rigid organizational structures that can easily change. Therefore, they are more flexible and adaptable to the rapidly changing circumstances and situations with extreme uncertainty. Especially in today’s steadily changing and developing world, this feature is of great importance for startup companies.
Managing a startup company: Scrum
As an approach for startup company management, agile management systems have become very popular lately. Scrum, for example, is a kind of agile project management that focuses on delivery and execution rather than on long planning phases.
It gives a startup the ability to self-organize and rapidly improve both speed and quality of work in collaborative, self-managing, and, ideally, cross-functional teams. Regularly held meetings streamline the coordination between projects, team members, and clients. They furthermore keep every team member up-to-date. Agile management styles such as scrum most often lead to higher motivation levels of employees, greater team-spirit, and in the end the most effective and successful results attainable.
Startup is a state of mind
So to summarize, a simple quote by a startup-cofounder Adora Cheung may put it straight:
“Startup is a state of mind. It’s when people join your company and are still making the explicit decision to forgo stability in exchange for the promise of tremendous growth and the excitement of making immediate impact.”