Which are you of these 2 types of startups?

business tools

People often ask me what the difference is between a startup and a new small business. At Pollenizer and in their terrific book Focus, the difference is defined as follows:

A new small business – has a proven business model and method of success – e.g. a cafe.

A startup – tries to prove a new business model through solving problems in a new way.

If it is that you are the latter – then it pays to know what kind of startup you are having a crack at. Is it an If & Then or a When & Who?

If & Then – A business where something needs to happen during the building process for a commercial model to emerge – possibly critical mass or wide adoption of a new concept. Then, it will work…. The IF bit is what makes it hard and the most unpredictable type of startup. I’d put Airbnb in this category.

When & Who – A business which seems inevitable, often aligned with a technology curve jump. It can either be a race to get the tech ready or a timing issue for when people are ready for it. I’d put social networks and most e-commerce categories in this category.

Knowing which one you are matters. It changes everything from how and when we scale, to who matters when we launch. The challenge of course is that when it succeeds, even the If & Then startups seem like When and Who’s.

You should totally read my book – The Great Fragmentation.