Are you sure you want to be a startup?

“Startup” is a word that makes an impression. Dynamic, trendy, promising for the future. Over the past dozen or so years, startups have gained almost cult status, coming to symbolize modernity, innovation, and rapid growth. But as is often the case with popularity, over time the name has also come to carry... negative connotations.

Not every startup is another SpaceX. And not every organization that calls itself a startup actually operates with the scale and discipline that hyperscaling requires. In the post-dot-com boom world, where the word “startup” is overused, it is worth pausing and asking yourself a simple question: Will calling yourself a startup really help you build trust and your company's image? Because in some sectors, agility and innovation can be your greatest asset. In others, they can arouse mistrust and fear. And that's what this article is about.

So where did startups come from in the first place?

Let's start with the basics.

Startups are a relatively young phenomenon. Their intensive development took place before 2000, during the “dot-com boom,” a period of global investment euphoria associated with technology companies. Today, it is difficult to imagine a world of innovation without startups, although they still represent a small fraction of all companies.

Their importance to the economy is not based on their number, but on their quality. Innovation and dynamic growth mean that they play an increasingly important role in shaping new trends and solutions.

Okay, but what exactly is a startup?

This is where it gets interesting, because... there is no single, consistent definition of the term. But don't worry, we've gathered the most important approaches.

Steve Blank, a legend in the world of startups, says that it is simply “a temporary organization that is looking for a profitable, scalable, and repeatable business model.” Key words? Temporary, looking. So, not yet a company with a full plan, but rather a team trying to find one.

Eric Ries, creator of the Lean Startup method, adds: “a human institution designed to build new products or services under conditions of extreme uncertainty.” So a startup is not just a business plan and MVP, but also a team of people who are not afraid to experiment, even though they don't know much about what lies ahead.

In the literature, you will also find a more practical approach: a startup is a company in its early stages of development that:

• has a product (or is in the process of creating one),

• operates innovatively (technology, business model, mode of operation),

• has the potential for above-average growth (which is why it is of interest to investors),

• operates at low cost, with high risk, but also with the chance of a large return.

And what does the market say about this?

J. Adamczyk, based on the concept of the “Blue Ocean Strategy,” approaches the topic in yet another way: a startup is a response to a specific market problem or trend. One for which:

• an innovative solution has been designed,

• a business model has been developed to sustain it,

• and which has the potential to hyperscale, i.e., to rapidly increase sales, the number of customers, and thus... the value of the entire company.

He also emphasizes a set of typical characteristics of a startup:

• innovation (in product, technology, activities),

• competitive advantage resulting from this innovation,

• lack of large equity capital, and therefore the need to seek an investor,

• dynamic growth and quick decisions,

• high risk,

• flat structure and a partnership approach within the team,

• unpredictability – because everything is happening for the first time.

But... how do you know if you are a startup?

A startup is not just any new company with an idea for an innovative product. It is primarily an organization operating in conditions of high uncertainty, which is still looking for a scalable, profitable, and repeatable business model. The key is scalability, i.e., the ability to grow very quickly, capture markets, and increase the number of customers without having to proportionally increase costs. Because while innovation and a fresh perspective are important, a true startup must have the potential for rapid growth. Without this, even the best idea will remain just a promising company, but not a startup in the full sense of the word.

You may think that your project is super innovative, groundbreaking, with potential for global growth and expansion. And maybe it is. But the truth is that in most cases, it isn't. And that's not a criticism. It's just statistics.

Most companies that think of themselves as startups actually operate like classic micro-enterprises. And that's absolutely fine. Not every new company has to be a startup. Not every innovation is a revolution. Not every market is waiting for someone to “disrupt” it.

What's more, you can run a successful company that won't scale spectacularly, has no ambitions for unicorn status, but makes money, grows, employs people, provides value and a sense of purpose. And that's an equally valuable model. Not every company has to grow exponentially. Not every company needs an investor. Not every company wants one. And that's fine.

Anyway, if your idea really makes sense, the market will give you an answer very quickly. Either you will find your first customers, partners, investors, and real interest. Or... you won't. And nothing is lost. Maybe you just need a different approach.

But today we want to ask a slightly different question. Even if you meet most of the definitions of a startup, even if you really have a chance to make a difference, are you sure you want to present yourself that way?

Because sometimes how you talk about yourself can open doors. And sometimes you can unknowingly close them.

Okay... so why do most startups fail?

Because even though this whole world sounds exciting, with innovation, technology, and quick pivots, the reality can be brutal. Most startups simply don't survive.

R. Sobczak points out four things that matter most: a solid business model, a well-chosen and diverse team, financing (especially at the scaling stage), and product development and validation. So it's not the idea itself (because it may be mediocre), but its implementation and execution.

And where do problems most often arise? There is no real demand for the product. There is no well-thought-out business model. Competition is too strong. The team is not delivering. Customer service is lacking. Money is running out or is being mismanaged.

The lack of a marketing and communication strategy is one of the most common reasons for failure. In other words, the product may be good, but if you can't show it to the world properly, no one will know about it.

So... what next?

Before you decide to communicate that you are a startup, consider whether it really works to your advantage.

For some, the word “startup” means agility, innovation, and courage. For others: experimentation, uncertainty, and instability. The key is not whether you fit the definition, but what associations you evoke.

And here we return to the point: business and communication strategy is not something to be left for later. These are elements that can determine your success or whether you end up in the failure statistics.

That is why it is worth talking about it.

If you feel that you are at a stage where you need to decide how to present yourself, where to place emphasis, what story to tell, let us know. We will help you find the right words and build a coherent narrative that will work to your advantage. And that's regardless of whether you're a startup, a scaleup, or just a company with ambitions for something more.