It seems things are different for kids these days. I say that because of two very different, but eye-opening things I have noticed lately.
The first example comes from the fact that I am so incredibly busy these days, the last thing I want to do during one of my few weekend hours at home is mow the lawn. So I figured I'd hire a neighborhood kid to do it. Certainly, in my neighborhood full of kids, one of them has started a lawn mowing business. Right? Nope, I can't find a single kid doing anything to make money by working for themselves.
The second thing I noticed is the proliferation of motorized scooters. Kids of all ages are zipping around the sidewalks and streets on electric motor powered scooters. I no longer see them riding bikes, skateboarding, or even pushing an original Razer scooter. Nope, these lazy slackers are letting a motor do all the work while they stand on the board, with a spoiled grin on their face.
I know I sound like an incredibly old, grumpy man, but what has happened to the youth of our nation?
When people ask me what I do for a living, I frequently say that I am the founder of a software startup. Sometimes, people respond by telling me that they are also into startups. They have a food truck, a house cleaning service, etc, etc. With all due respect, those are not startups!
Eric Ries wrote the best definition of a startup that I've ever seen, in his book The Lean Startup:
A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.Awesome, right? I love it because it is so simple and short, yet it covers the key areas. Human. New. Uncertainty. So why isn't a cupcake shop or a bar a startup?
For starters, these are not new services. There is no question that most markets demand a bar. People have been buying and eating cupcakes for years. For the most part, nothing new has been created here. Sure, there may be a new way of delivering these products or a slightly different value prop, but in the end the product is essentially the same.
Which brings us to the next point: there is not extreme uncertainty. Sure, there may be some uncertainty but proper research and planning around starting your cupcake shop or neighborhood bar can reduce the uncertainty to minimal levels. It's relatively easy to figure out how many bars or cupcake shops a community can support, based on population. There are known, best practices that can be followed. Heck, with all the information available to use via technology and the web, it's probably never been less risky to start a small business!
I'd like to add one additional piece of analysis to Eric's definition. Based on the two points I make above, I'd also so that a startup is a business unable to attract bank loans or other sources of traditional debt financing. If a Starbucks executive left to start their own neighborhood coffee shop, there is little doubt that with a proper business plan, he or she would be able to obtain a small business loan from a local bank. There is little uncertainty in this venture. Little risk.
So what are these businesses called, if not startups? Small businesses. They are wonderful and critical to most economies. I take nothing away from the founders of small businesses. The successful ones are smart, adventurous people. Their businesses just aren't startups, and that is okay.