Will the next startup be an enterprise? The words are synonyms in conversational use so the question may seem unusual. In economic terms, a company is a for-profit organization disconnected from the day-to-day business solutions. The mark indicates some kind of progress that is taking place behind the doors of the company, whether through new manufacturing processes, new organizational practices or previously unknown goods.
The words are not mutually exclusive, just to be sure. Some startups are businesses but not every company qualifies. Only companies doing creative things that simply purchasing and selling cannot be achieved in full are businesses. Startup-turned-superpower Uber, which tried to improve the way customers order taxis, is a corporation because it introduced a new approach to the market. It might not be Uber clone Juno, and definitely will not be potential ridesharing services. They will be depending on bots and the expertise of others to outsource, but they are not businesses.
So if you’re willing to bring creative ideas to the world then consider the business. How do you put yourself on a solid footing here?
- Bring a new valuable product for communities
You should focus on both “new” and “valuable.” While serving coffee has value, another coffee shop’s value is neither fresh nor creative; it’s just an old concept at a new venue. Find a group to represent, define a problem, and apply design strategies and technology to solve it in a different way, to build a company. The issue you’re tackling may be as focused and serious as leaded water in Flint, Mich., which David Tarver helps his group tackle through an initiative on urban entrepreneurship. Or it may be as common and unexciting as a boring coffee buying experience that the Google Ventures portfolio business, Blue Bottle Coffee, is helping fix. The ecommerce startup uses a micro-roasting subscription model with ads based on brewing types before bean varieties.
Regardless of the problem’s complexity, find a way to solve it like nobody else does.
- Distance yourself from the mindset of investors
As investors decide which company they want to fund, will they prefer the copycat with 100 rivals, or the first-mover entrepreneur with the market all to themselves? Especially with less venture capital available, investors would like to know whether a business concept is a company. That doesn’t mean the concept of your company should be entirely different to what’s been done before — concepts that are too far from the beltway are risky — but it does mean you need to find an unexploited space, a fresh way of slicing old ideas.
That is just what Climate Company is doing and investors have taken note. The agricultural data firm, which was sold by San Francisco entrepreneur David Friedberg to Monsanto in 2013, blends old ideas into a new, profitable package that attracted $109 million in four investment rounds. It helps farmers secure their livelihoods in the era of climate change through water and soil monitoring software, accompanying hardware, and crop loss insurance. As Climate Company has, be prepared to show the specific angle that your startup has towards a solution to draw investors.
- Find out new business models
Established business ideas — another dry cleaner, burger joint or online clothing store — are important to daily life, but their business models are fairly “simple” and not creative.
Forging a new organization, however, demands a new business model. Take, for example, Infibeam, an Indian ecommerce enabler that is hard to categories. The business offers the merchants its program selling everything from books to electronics to car accessories. But this isn’t an Amazon-like platform where sellers only post deals. More than 30,000 merchants have built full-fledged online stores to peddle their goods using Infibeam’s Buildabazaar. Use what you know and who you know, as Infibeam has done, but bring it together in a different way.
- Test your business skills
The flat, frank truth about companies is that they must rely on entrepreneurial judgment in the first place. Since businesses are creating new niches, the designers have no previous examples or evidence to look at. That is not the case with a coffee shop, where existing metrics will provide a clear indication of the viability of a new venue. But that’s why a seasoned entrepreneur is the ideal match for a firm: Not only does an accomplished founder have vision; he has mastered the business sense needed to make important instinct decisions.
The late Steve Jobs was renowned at Apple’s helm for having faith in his stomach. “Intuition is a very powerful thing,” he said to the biographer Walter Isaacson; in my view it is stronger than intelligence. Of course intuition isn’t fine. When the first iMac was introduced to Jobs, he decided to rename it to “MacMan,” citing gut instinct. Using methods such as prototyping, focus groups, and strict market segmentation with restricted releases to get a better understanding — albeit not a complete one — of whether an understanding can launch into the mass market. Do you have enough faith in your entrepreneurial ability to stake a company there?
Ensuring that the next venture is a business is far from important and many companies are doing amazing things without having firmness. But businesses are true pioneers: they do something different and better, building new markets with innovations that have yet to be conceived by other business leaders. And isn’t this the type of businessman we all want to be?