This is the second post of my blog journey towards an ideal startup support system. The first post can be found here.
It’s probably a good idea to first go into the two main characters of our play: startups & support systems. It won’t surprise you that there is a certain tension between the two. Startup founders are generally speaking not the “best in class” students (not saying they aren’t bright, just saying that most likely they aren’t a fan of “classical learning”) and can be stubborn and arrogant. Support systems are often focused on traditional learning (Hi, I’m the teacher, now sit straight and I will tell you how the world works) and not very flexible in the way they’re structured. Let’s dive into startups first, and I’ll save the support systems for the next post!
Different kinds of startups
The very nature of a startup is that everything continuously changes: the goals, the milestones, the people, the commitment, the culture, the awareness, the management and management style, the sales, the technology, the products, basically everything. But it gets worse: Just as we tend to talk about continents as if the entire continent has one culture, one history and one legislation, we do the same with startups.
I once met a managing director of a large consultancy firm and he mentioned that they were losing good candidates to startups very late in the hiring process. I couldn’t understand why young ambitious graduates were not able to decide between a large global consultancy firm and a small tech startup. Turned out that when the MD talks about startups he has companies like Picnic (1300+ employees) or Takeaway on his mind (1700+ employees). When I think about startups I see a struggling graduate student with his high school friend renting their first office space.
In general we make only limited distinction between small and large startups, software and hardware startups, cleantech or medtech, or B2C and B2C. Unfortunately, all startups have different development paths, different targets and milestones to reach. And to top this: as startups are continuously changing they might be B2B at the start of the year, and B2C at the end of the year or they might change their target customer group from hospitals to oil & gas.
In other words: We talk about startups as if they are static, yet the one thing which defines them is their dynamic.
I mentioned startups are going through different phases (or stages, or whatever you like to call them. I’ll call them phases for the rest of this series). Lets dive into them for a quick moment.
Just imagine a single founder startup where the founder is still working part-time at a large firm and who is looking for another founder. Setting him up for VC meetups and organizing meetings with potential clients is useless and the result of the program will be minimal. Not because the program is wrong, or the startup does not work, it is just not the right phase, the goals/milestones of the startup do not match with the goals/milestones of the program.
It doesn’t really matter how you define the phases (just google, there is a lot written on them), or what you call them, as long as you realise there are phases every startup goes through, and in these phases there are a lot of changes. If support and phase of the startup are not well aligned, the support is useless.
Because of this potential misalignment it makes it even more important to distinguish where the startup is in their lifecycle and how they can be best supported. Just to give you an idea, I generally use 7 phases, where the last one can be considered out of scope:
- Discovery / Ideation
- Founder Commitment
- Customer Validation
- Founding / Early Stage / Product Dev
- Later Stage / Sales
- Sustain / Maintain
As mentioned earlier, I’ll not go into definitions of the different phases, or what kind of activities should be done in each phase (use google if you’re interested in all the different opinions). For the purpose of this blog series it is enough that you understand that all of the above mentioned (the goals, the milestones, the people, the commitment, the culture, the awareness, the management and management style, the sales, the technology, the products) will change from phase to phase.
It might seem a startup is basically (organized) chaos with all these changes (some are..), but that’s not the case for most. Luckily most startups go through the phases above and although a lot changes from phase to phase, within the phases there is general alignment on milestones, goals, challenges, etc.
The same goes for startups within the same customer segment, or that use the same core technology, or that have the same value proposition, etc etc. We’re able to categorize startups in many, many ways. The hard part is: startups switch between one category and the other, sometimes even mulitple categories in the same time. The silver lining here: while they are in the same category (that might be phase, or customer segment, or anything else) they share goals, milestones, challenges and more (hence, the endless scouting/selection procedures of the programs to determine a phase-match and a category match between startup and support).
Now we know that startups are defined by change, and they go through defined phases where there are (short) moments of shared milestones, goals and challenges, we can ask ourselves what kind of support systems are best suited to cater the needs of startups. More on this in blog #3.