Fear of starting a business: how to work with it instead of waiting for it to go
Fear of starting a business doesn't disappear before you begin. It shrinks when you begin small. This is the most honest way I know to face it.
Leer más →What is a startup (and why not every company has to be one)
A startup is a company designed to grow very fast. That isn't the same as a new company or a tech company. Knowing the difference saves you a lot of wrong decisions.
"I've got a startup."
You hear it everywhere. And it almost always means different things.
Sometimes it's a new company. Sometimes it's a tech company. Sometimes it's an idea in a notebook.
Let's give it its real name.
What is a startup?
The most useful definition I know comes from Paul Graham of Y Combinator: a startup is a company designed to grow fast.
It isn't about age. It isn't about technology. It isn't about industry.
It's about growth.
A startup looks for a business model that can be repeated and multiplied at huge scale. And it usually needs outside money to do that at speed.
A startup isn't just a new company
A bakery that opens today is a new company. It isn't a startup. And that's fine.
A two-person consultancy isn't one either. Nor is an agency. Nor a software company that lives off its clients.
They're companies. They can be very good, very profitable and very solid. They just don't play the same game.
Two different races
I like to think of it this way. There are two different races:
The startup race. Grow as fast as possible, take the market before anyone else, and reach a size that justifies the money invested. Lots of speed, lots of risk, very big outcomes or nothing.
The profitable company race. Grow on what you earn, look after customers, build something that lasts. Less speed, less risk, more modest outcomes that are more your own.
Both are legitimate. The mistake is running one while believing you're running the other.
You don't have to be a startup to build something worthwhile.
Startup examples
The ones we all know started this way: Airbnb, Uber, Glovo, Wallapop. Companies that went for very fast growth with investor money and bet on huge markets.
But there are also tech companies that chose another path. Mailchimp grew for almost twenty years without investors. Basecamp has spent decades being small and profitable on purpose.
Both routes exist. And both can work.
How to tell what you're building
Three questions:
- Is your market huge or a niche? A niche can be very profitable, but rarely justifies a round.
- Can you charge early? If so, you don't need outside money to start.
- What do you want? Something huge, or something of your own? Speed, or freedom?
We answered that years ago. Foxnice isn't a startup. It's a company that makes software for sports clubs, rural guesthouses and restaurants, and lives off its customers.
To the startup world, we don't exist. To our customers, we do. And that's the count that matters to us.
What to take away
"Startup" isn't a title. It's a strategy.
If you choose it, choose it knowing what it involves. And if you don't, don't feel any less of a founder for it.
Building a profitable, small company of your own is also entrepreneurship. Maybe the purest kind.
P.S. I told this from another angle in our customers are the only investors we've ever had.