Startups vs. Businesses: Defining Your Venture Along the Way

What’s the difference between a start-up and a business?

During a recent #StartUpEdu course, one big thing that stood out to me was how startups specifically differ from big companies. Particularly:

Startups are not smaller versions of large companies.

The lean definition of a startup is actually a “temporary organization designed to search for a repeatable and scalable business model”. I haven’t had it explained to me in this way before, and it’s definitely clear now. Therefore:

Searching for a business model is different than executing one.

Large companies sell recognizable products to a known market or target customer, whereas startups operate in uncertainty. Startups are often unable to develop full business plans (or if they do , they rarely survive their first contact with customers), as it involves a lot of trial and error. Because plans change, sometimes very frequently,  long-range forecasts in multiple areas of uncertainty end up being  fictional.

Instructor Keri Damen, who is also the Director of Entrepreneurship Programs at MaRS Discovery District, shared some hard facts about the real struggle startups face, and why many of them fail:

Why startups are challenging, and often fail

  • High costs of getting first customer
  • High costs of getting first product right
  • Long technology/product development cycles
  • People not always willing to take risks
  • Finding financing
  • Cofounders fight
  • Not enough customers
  • Didn’t find product/market fit

Despite the risks and doubts, it is not a better time than ever to take take the leap into entrepreneurship. Although traditionally this is considered more risky than anything, this spring I spoke at an event on entrepreneurship as a solution to the rising youth unemployment rate, and fully believe now is the time to take action. As Keri also shared:

Why now is the best time to get started with your startup

  • Entry barriers not as limited by technology
  • 98% of startups bootstrapped
  • Can reduce risk with customer development/lean startup
  • Communities to help
  • Decentralization of funding (crowdsourcing, accelerators, impact investing)
  • Availability of tools and information online

Through Now Creative Group, we began offering a Startup Package, to help entrepreneurs, activists and small businesses start strong with a focused visual identity, necessary promotional materials, and a brand they can be confident in.

Despite this, the question I’m left with is: How do today’s entrepreneurs, activists, business leaders, and founders choose to classify their ‘organizations’?

Follow along on Twitter @Francavilla, the course account @EntrepreneurSCS and the hashtag #StartUpEdu for more each week.

This is a sponsored post on behalf of University of Toronto School of Continuing Studies Certificate in Entrepreneurship program; however, the opinions provided are my own.