• jzitek@harborcapitalgroupinc.com
  • +1 612-978-7222
  • Bloomington, MN 55437


The New Startup Model 



According to Steve Blank, entrepreneur, and professor at Stanford, a startup is a temporary organization in search of a scalable, repeatable, profitable business model.

A little history. Until 1950, the traditional way to start a new business was to use traditional tools and methods. But, as entrepreneurship grew, and many startups failed, entrepreneurs realized that startups are not just small versions of large companies.

Large companies knew and understood who the customers were, their business model, the problems involved in their company, markets, and industry. Startups, on the other hand, we’re searching for a repeatable and profitable business model.

The startup model required different rules, roadmaps, skill sets, and tools to minimize the risks and optimize the entrepreneur’s chances for success.

Some of these new tools include

  • agile development, an incremental and interactive approach to engineering that allows product development to pivot to customer and market feedback,

  • A business model design which replaces statistic business plans with a nine-box map of critical elements,

  • New tools for creating and fostering winning ideas

  • Lean Startup which allows the customer and agile development  to process simultaneously

  • Lean  user interface designs to  improve web/mobile interface and conversion rates

  • Venture and entrepreneur finances were attractive to managed funds, which freed up innovation.

These processes and tools allow startups to refine and scale their ideas faster and more affordably.

Different types of entrepreneurship

The main types of startups we are concerned with here are:

Small business entrepreneurship: the 5.9 million small businesses that make up 99% of all U.S. companies and employ 50% of all nongovernment workers. Most of thee entrepreneurs define success as making a profit, not build a 100 million dollar business,

Scalable startups are entrepreneurs that start a company believing their vision will change the world and generate 100s of millions of dollars in sales. They are looking for a scalable business model and require venture capital.

Buyable startups are relatively new With the advent of developing low-cost apps, startups can fund themselves (often on credit cards) and raise small amounts of money, The goal is to get acquired by large companies.

 


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