The journey from the corporate world to the startup world might seem simple to some. There’s no reason you can’t take what you learned working at a successful, established company, apply it to your startup and expect the same results, right? Wrong. Entrepreneurs who come from a corporate setting need to “unlearn” what has been ingrained in their brain for so long, or they risk putting their startup at jeopardy.
Here are a few important points and comparisons to keep in mind when making the transition from the corporate side to steering your own startup:
Creating a market versus extending a market
Corporate: In a corporate setting, the ability to get reports for the relevant market, analyst estimates for your market and comparisons to competitors' products are common practices. Often times you're extending a product line or creating a new version of an existing product. Branding has already taken place -- it’s recognized, so anything you do is to keep up with the market and maintain the level of success the corporation expects for their product or service.
Startup: Instead of maintaining an already recognizable product or service, startup founders must focus on the actual creation of a new product category, service or market. By taking an entirely new approach to solving a problem, startups are forced to make an innovative point in a market that might already be booming, or one that has yet to be created. Their mindset is about changing the world, not necessarily taking over the world … yet. Trusting your guts and your users is a top priority.
Approach product launches differently
Corporate: Many corporations plan a product or service release around a multi-month timeframe, allowing sufficient time for development, testing and support training. You need to release a stable and ready product as well as train a large customer base and support staff in its usage before it meets the public eye. New releases are expensive in this part of the business, so more precaution takes place prior to launch.
Startup: It’s a bit more risky here. If startups use the same model, they’ve just lost months of feedback from their potential users. It’s more important to release the minimum viable product -- which is probably 40 percent less than your already minimal list -- and see how users actually use the product. Since a strong customer base doesn’t already exist, you are your own support staff. Releases should be cheap and quick, and they should be made to work for you. Once your product is live, conduct a lot of A/B testing (a test that shows different users different views of the site to see what works better) and improve site conversions -- clicks, registrations and purchases.
Re-define business roles
Corporate: It’s a well-defined role in the corporate business model: you’re the engineer, the product manager, the team lead. Responsibilities are clear and someone else deals with the “other” stuff, such as customer support. There are very few “fine lines” when talking job titles and responsibilities.
Startup: In a startup, you’re it. The one and only. You’re in charge and answer to yourself. Product ideas, website code, testing and technical support are on your shoulders. You rent an office, handle the payroll and manage the insurance plan. Did we mention the trash needs to be taken out at least twice a week? You get the idea.
Stability or flexibility?
Corporate: People are hired for specific roles at corporate offices. Brain power, stability, ability to stick around for two years -- those are all criteria considered in the hiring process. Training is standard and usually expected when hiring recent college graduates or those taking on unfamiliar roles and responsibilities. There is a system, if you will.
Startup: Flexibility is the key because your website for cat-food connoisseurs could turn into a mail-order sushi-grade tuna service next week. People are hired for their execution skills because there's no program manager checking up on them every day. Traditional work hours don’t apply. Every new release, which can be daily, requires late nights and early mornings until the product is up and running. You hire people with common sense (which is surprisingly uncommon) who can hit the ground running with little direction. The brand isn’t what attracted them (because it isn’t a brand just yet), so it’s important for them believe in what you’re trying to do, too.
Network from the bottom up
Corporate: Existing customers, a trained sales force with nationwide (or even international) contacts, and established sales channels are all readily available in corporate businesses. They also usually have a budget that blows startup budgets out of the water, say a marketing budget that’s 10x your seed round. Yikes.
Startup: A rolodex of networking contacts, LinkedIn connections and Facebook friends are your step one. A very compelling product needs to be in place to have your users jump the fence to download, install it or create a user account. If they like it, they’ll likely spread the work to their friends who can then do the same. It’s all about going viral, word of mouth referrals and grassroots marketing. If you succeed, you just might get to that marketing budget one day.
While the end goals are all the same -- to succeed -- the process of getting there is not. After spending 15 years in the corporate world, I found the most important path for success in the startup world was to unlearn what I had focused on in my daily routine for so long. Doing so is exactly what leads to success.
Eran Davidov is the co-founder, CTO and Geek in Residence at Lifesta, the first and largest secondary marketplace for daily deals. Prior to Lifesta, Davidov spent 12 years at Sun Microsystems where he did everything from write code to manage a 200-person team as director of engineering for mobile Java.
[Images via Vladitto (top) and Alita Bobrov (bottom)/Shutterstock]