Startups Aren’t Small Companies

November 9, 2009 by Ben Yoskovitz 21 Comments

Everyone says that startups are fast-paced, innovative and able to take bigger risks more quickly than large companies. But the reality is that too many startups are not prepared for the risk-taking and innovation that has to take place.

Just because a startup is small doesn’t guarantee that it’s agile or decisive.

The agility and decisiveness in a startup comes from its founders. The founders have to be ballsy, risk-taking, innovative and aggressive. If they’re not, they can very quickly find themselves running a “small company.” Small companies are fine, but they’re not startups.

A lot of people want to work at startups because they’re small. They believe that a startup has more camaraderie and less politics than a bigger company. They expect more innovation in a startup, and they expect their work to have more impact and meaning. And all of those things could be true but they’re not automatically true.

The truth is you can get a lot of the benefits described above in a small company that’s not a startup. The difference is that a startup is at a stage where it has to be more innovative, aggressive, soul-searching and decisive. If it’s not, then it’s not a real startup.

Founders: If you’re not decisive, aggressive, soul-searching and capable of pivoting and adjusting (sometimes drastically) then you’re not running a startup. You’re running a small company. That’s OK. Just don’t get the two confused.

Employees: If you’re not genuinely interested in pivoting, adjusting, taking risk, and sometimes flipping on your head with huge change, then you’re not really a startup employee. You’re a small business employee. That’s OK. Just don’t get the two confused.

Startups aren’t small companies. They have a lot of similarities, but they’re not the same. Understanding and executing on the differences is critical for startup success.

giffc

Can often be tough to know when to persevere vs when to pivot, but you try to make the best decisions you can and live with it. The worst is when you've come to the conclusion you have to pivot, but your investors refuse. Nasty nasty situation.
Gordie Rogers

Hi, Ben.
Interesting. I never thought of the differences that distinguish the two before. It must be logical and sometimes a good thing when a startup becomes a small company? Doesn't that mean that you're progressing and becoming more stable. You've taken the risks to get you over the initial phases and challenges and now you're setting your track on what you know works.
startupsarentsmallcompanies

You've taken the risks to get you over the initial phases and challenges and now you're exercise your body.

Penny Stocks
Penny Stock
vending locators

Great post with great stuff…!!!
Benjamin Yoskovitz

Gordie – That might be a reasonable path, but I'm not sure most startups want to become small companies as much as they want to become big companies –> jumping from startup to big company. There are startups that remain small, which is OK, but I think those want to and work very hard in most cases to keep a startup attitude, even if they've been in business for many years.
Benjamin Yoskovitz

Agreed 100%. That is a very unfortunate circumstance. I've seen it happen, but I'm not sure I have a great answer on how to avoid those types of conflicts.
giffc

after getting singed on this one, I would say only work with investors who are focused on early stage tech, because they'll have a more innate understanding that pivots are necessary and that they need to back up the founders.
Anonymous

i like reading this one, interesting post..
its great 🙂
metal roofing

I have seen such a situation before and I always tried to make a solution for them . But always I am failed in such situations. Nice sharing . From this I learned a lot on such issues.
Jay

good insight. I just started a small business and hope to one day have a “start-up”
Jay

good insight. I just started a small business and hope to one day have a “start-up”
saad

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Take Care
sikis

I just started a small business and hope to one day have a “start-up” ?
sikis

I just started a small business and hope to one day have a “start-up” ?
Estore

It is a great thing when a start up becomes a small company if the start up business has people who are willing and ready to invest some money into the business with this the business will be set to pivot which is a good thing but in a case where the start up does not have investors then the business will never grow into a small company.
yoli

wow its real good question of Small Companies.bcoz i have always that question in my mind so thank you so much.
prestitionline

Young companies have small margins for error. Mistakes made early on can sink a company before its gets off the ground. Below is a list of 10 common mistakes made by young, small companies. In the list below, I use the generic term “product” to refer to either a product or a service.
staryorkie

Nice Site. I am new here but will be visiting more often as you have done a good job.

Thanks
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Startups Aren’t Small Companies

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