Sunday, March 25, 2012

Start up Definition

I borrowed words from Steve Blank before about why I am drawn to work in start-ups, I also enjoyed the quote below from this article:
For years we’ve treated startups like they are just smaller versions of a large company. However, we now know that a startup is a temporary organization designed to search for a repeatable and scalable business model. Within this definition, a startup can be a new venture or it can be a new division or business unit in an existing company...
...The primary objective of a startup is to validate its business model hypotheses (and iterate and pivot until it does.) Then it moves into execution mode. It’s at this point the business needs an operating plan, financial forecasts and other well-understood management tools.
One of the things  I like about this definition is also clearly includes ventures like FACE AIDS, which Julie is leading, and other non-profit ventures that are searching for new ways to address social problems.

The article also particularly resonated with me because a couple of friends are considering business school in order to move into entrepreneurship. I tend to caution them against this, I think if a person going into business school wants to get involved with a start-up on the other side of that they need to have a plan to make sure it happens. An MBA creates huge opportunity cost for following non-traditional paths (ie not consulting or banking), and it can be a trap to think the skills you typically get from an MBA apply at all to a start-up. It seems to me that a business school student has to be lazer focused on what they are trying to do, if they really want to join or found a start-up and create value. I do think with a clear articulation of what you want to learn (like that in the article), and time to work on an idea in a dynamic environment, it can be a good thing. I have seen it work once very well, with Oliver at VigLink. While I tend to think of an MBA as a risk-averse move, I do think that with a clear idea of what the weaknesses are and what a person wants to get out of it, it can help them make the leap.

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