When you read about entrepreneurship, you can get the sense that there is only one type of company. Invent some new technology, get hundred million users and IPO. The theme was echoed by the always thought-provoking Steven Black in his fireside chat on Startup Hacking. (link). During the presentation he caveats his point by outlining four types of entrepreneurs and suggest that there are other kinds of entrepreneurship that might be different from a classic Silicon Valley Startup;
– Lifestyle entrepreneurs, like a surfer that take a few students to help her finance her passion.
– Mum & Pop entrepreneurs, like corner shops and small family businesses
– Tech entrepreneurs, like the founders of Facebook and Google
– Feature entrepreneurs, people who make features or technology that then get bought by bigger tech companies.
I find it to be a refreshing thought that there are different types of entrepreneurship and that founders should build the kind of company that fit their temperament, skills and region. Especially because, I as a non-Silicon Valley founder, often find the advice and methodology provided by many in the startup community to be very specific for the type of tech startups that Silicon Valley create so well. What seem to be especially lacking (and sometimes even looked down upon) is what we can call the ‘Old School Startup’. New companies that are not enablers of new technology but powered by it. Startups that might not create a whole new behavior or industry but are replacing or expanding an existing one. Companies like Warby Parker, Vice Media and JustEat. I realize that for a VC, a perfect home run is a new tech startup where the returns are incredible. However, I suggest that there is a host of big innovative startups that are being built that use a different methodology than what is best practice in Silicon Valley. Theses companies might never become as valuable as Uber, Google or Facebook — but they, not small Mum & Pop shows either. A few properties that make them different;
– The are powered by technology not an enabler of a new one
– They are most often disrupting an existing industry that have been dormant or not innovated in their product, business model or service layer
– The founders are often not engineers
– They often have a business model in place from day one and can scale their business while they expand their user base (vs. focusing on getting a big user base and then figuring out the business model)
– They are often made by creating fresh brands — and using web tools to make products/services/experiences better and cheaper.
There are several other types of entrepreneurship (agencies and service startups comes to mind), but in our fascination of companies like Facebook that grow from nothing to 100B in a few years, we seem to be forgetting that the world is filled with these other amazing companies. Now the world is not binary, and there are certainly startups that are a hybrid between ‘Old School Startups’ and Tech Startups. (e.g. Uber), but as we talk about startups in general, we should become more aware that there are different types — and methods that work for growing one type — might not work for others.