startups, beyond the hype

First let me start that this is one of my pet peeves and not meant in any way to offend anyone or specifically point to any one person, organization or company.

With that out of the way… Why the F*** does everyone think they are doing a startup nowadays?

Startups are all the rage at the moment. On the world markets the headlines are mostly about startups going public and new emerging companies taking control of markets. They even pop up in regular news now and then when new apps or new concepts are released. It’s all about Silicon Valley in San Francisco, CA, USA. So much even that in London there is a roundabout nicknamed the Silicon Roundabout. On top of that HBO started this year with a new series called “Silicon Valley” that follows a startup.

But why am I so pissed of about it? I’m gonna be complete goth/emo/hipster about it and just say it. Making it popular killed it!

Okay, so maybe it’s not that bad but I do get generally annoyed by people stating that they are in a startup or have one. A lot of people I get to talk to are just shelling it out that they are in a startup and they are awesome because of it. But I find that in lots of cases it’s just a newly founded company or a company with a casual culture. Although these are traits that many startups have they are by no means the definition of what a startup is.

Definition

The article about start-ups on Wikipedia states: “A startup company or startup is a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.”. This is a definition from an article by Steve Blank that clearly states a couple of components that make up a startup. So, it’s temporary and searching for a business model. Being in technology, the casual culture, the nerds or even being funded by an investor are not part of definition. And I agree with Steve on that.

I however would like to add something that I think is crucial: “A startup company or startup is a company, a partnership or temporary organization designed to search for an innovative, repeatable and scalable business model.”. By adding this one word I excluded a lot of startups out there as in my opinion startups are only so if they are doing something other have not done before. This is also where the line get’s most tricky as you might operate in the same market as others but you might have a different business model/approach to it that tries to innovate. For me opening a bakery in a new part of town that does sort of the same thing as every other bakery but in a new area is not a startup. A bakery that tries to sell and create products in a way never seen before yet I would label as a startup.

The difference

The main difference is the type of people who will work for a startup. Working for a startup is not as well payed as it is for a regular company. As startups grow and have success they can have great benefits. But many won’t reach that success and their employees will not see those benefits. But employees of a startup are different in the core that they work on their ideals and not just a product. You must be a bit mental to get yourself into creating a new product out of scratch without a lot of certainties. Many startup people are different from the regular employees. They tend to stand out by being smarter than their peers, take more risks and in many ways are more entrepreneurs than they are employees. Employees of a startup don’t just work for the company, they own the company.

Because of this difference in employees the culture is also very different. Hierarchies are almost flat, companies try to keep small and personal and in general there is a more relaxed atmosphere even when there is high pressure. These are all results of the difference in employees and are not causes of their own. They might cause a better performing employees but that is only a result of a result. Cultures within startups differ dramatically due to different personalities working for them. Thus there is not a real definition of startup culture compared to corporate culture like in the finance sector. There is one thing that it’s for sure; a startup culture will never successfully be the same as a corporate culture in the same sector. This mainly because the goals of the different organizations divert so much from one another.

What’s the fuss?

Startups are, because of their core nature, very different from regular companies. However a lot of regular companies want to get from the people working for them the same as that people who work at startups do. Thus companies who are not really startups are labeling themselves as such to achieve this. On one hand foolish as they are just trying to emulate the results without the actual causes being in place. However it does seem to work in some cases as the culture does seem to attract the current day youth more than the “old” corporate culture. But this is more of a general culture change throughout society and not just taking over what startups have been doing. But for the people who are truly working in startups this can be frustrating as there are multiple consequences to these changes. The biggest one is that the employee pool shrinks as people get a safer alternative that has some of the traits they liked when working for a startup. Another one is that funds that used to go into innovative startup projects now go into these regular projects. And for many startup employees who look for a new project it means that they have to filter out these companies from their search manually.

My biggest problem however is that the popularization does not only cause the name of startups to be tainted but also that the talent pool on the other side of the same coin gets polluted. Not saying that some do not deserve to be part of a startup or that people working at a startup are better than others. I’m only stating this because working at a startup requires a different mindset than working in a regular company. For instance the “Why?” question should be native when working on a startup. Challenging the status quo is the reason why startups are created in the first place and when people working on that do not have that natural instinct it can become a problem. Also because the culture flows from the people it can become difficult creating the right culture with the wrong people. If your employees are not able to take ownership of the problem and get involved with it finding a solution could become a challenge. I’ve also seen that in some cases when these employees enter a startup culture they create havoc by either not adding to the culture but going against it. This can be devastating to a team.

There are also some lighter sides to the popularization of startups. As an employee I can get a better salary than what I used to get in the past. It makes the “real” startup people hard to come by and compared to before I can ask more and more for a year of work. On the financing side it has also become more popular to invest money into a startup. Largely fueled by the hype it still allows many startups to focus more on their product rather than having to raise funds. Although personally I don’t see the rising cost and the more risky ventures as a good thing as the bubble can burst at any moment.

One last note!

I know that after reading all this is should be clear what a startup is and what is not. But just to be clear; If you’re an organization that builds custom solutions for other organizations, you’re not a startup! If you’re an organization that produces goods on a large scale, you’re not a startup! If you’re an organization that is young, hip and trendy, You’re not a startup!

I know I’m kinda vocal about this, but with good reason. The popularization of the startup culture is doing damage to the work that is being done all around. From initiatives to get more diversity within the tech community to investments being done. They are all hampered by the stereotypification of people who do and work on startups. While it has always been that anyone could do it in any way they could want as long as they had the drive and the mindset to change the world around them it has not become a cliche limited to 20 to 35 year old white males with above average intelligence. Not so inspiring, nor effective, as we might have hoped to.

TL;DR

Although popularization of startups has increased the talent pool to pick from and has increased the amount of funding available for them there are a lot of down sides due to it’s rise. Talent pools might have grown but there are some issues where the wrong people get on board or where the right people go to the wrong companies. The funding pools is bigger but there are also a lot more fish trying to feed from the same sources. But by far the biggest issue is that more an more the 20 to 35 white male of above average intelligence is established as the stereotype for a startup. As startups are fueled by ideas and creativity ground in diversity from the norm this image is going against what a startup should be.

Even though there are benefits, do we really want them compared to the trade-off?

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