Columbia Business School

Startups Aren’t Just Small Versions of Large Companies

Presented by Columbia Business School

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Startups have a different purpose from mature companies, Steve Blank explains, and founders need different toolkits to have a chance at success.

There’s a hard reality many starting out on a new venture — whether a fresh line of business or an entirely new company — struggle to face: they have no idea what they’re doing.

More than twenty years ago, Rita McGrath and Ian McMillan wrote in Harvard Business Review, “Conventional planning operates on the premise that managers can extrapolate future results from a well-understood and predictable platform of past experience.” For those just starting out, they realized however, there’s a critical problem. Rather than a “predictable platform of past experience,” founders and corporate entrepreneurs, as they’d later come to be known, had only assumptions and a vision for what might be.
It’s hardly a surprise then, Steve Blank says now, that so many early startups failed.

Blank, a retired serial-entrepreneur-turned-educator and lecturer at Columbia Business School, explains that for decades startups were thought of as little more than small versions of mature companies — and startups approached everything from staffing to planning as if they were. Unlike mature companies, however, which are organized to execute a known business model, startups are in search of a business model. That idea lies at the center of the lean startup movement.

While the roots of the lean startup can be traced to the lean manufacturing movement of the 1990s, with its emphasis on eliminating waste, Blank is quick to stress that lean isn’t an excuse to be cheap — it’s a guide to focusing on what really matters: finding product-market fit and scaling as rapidly as possible.

Steve Blank is credited with revolutionizing how startups are built and how entrepreneurship is taught around the globe. A retired eight-time serial entrepreneur turned educator and author, Blank launched the Lean Startup movement, described in the May 2013 Harvard Business Review cover story, Why the Lean Startup Changes Everything.

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