Growing Startups
Many entrepreneurs do not distinguish a startup and a small business. The major difference is startup is designed for growth when small business such as restaurants, retail shops, barbershops, coffee shops is designed to be stable so they can stay in business. Because the foundation of startups is technology and technology changes fast so if you do not grow with it, you will not stay in business for long.
If Steve Jobs was happy for Apple to be a kit for hobbyists then personal computer will never be created and we probably are still using mainframe computers today. If Apple is only a computer company then iPod, iPads and iPhone will never be created. If Google is focusing only on search engine than there will never be Android phone or Chrome. What make Apple and Google special is their willingness to change with the market demands in order to grow bigger. To prosper and grow, entrepreneur must have a vision for the future. It means startup must be able to provide value to a large market; it must make something that many customers want; it must be able to reach customers as quickly as possible; and it must be willing to change as the market or technology changes. For example, if you create a product to be used only in your local market, you may reach a limited number of users but if you create it for the global market then you are thinking of fast growth. If you want to start a company, why not start with something that has the most potential? If you only want a stable business so you can survive then you are aiming at the small business but not startup. If you start a restaurant, you only have to compete with other local restaurants. If you start a search engine business then you have to compete with the whole world. That is why in startup business, you must come up with something that can be delivered to a large market so you get more customers.
During the era of mainframe computer, only very large companies can afford to buy computers because they were very expensive. However, technology changed and it was possible to build small computer using integrated circuits. The idea was known among computer engineers and university students but no one would even thought about building one. The design for small computer was taught in university for years as a theory in the electronic engineering classes. Students talked about them in Computer Homebrew club at StanfordUniversity then one day a young person named Steve Jobs attended the meeting and learned about it. He asked his friend Steve Wozniak to build a small computer to prove that it can be done. They built one for themselves but Jobs wanted to build for anybody who wanted to have a small computer to play with. He reached out first to his friends who were mostly hobbyists then to university students. The first hundred Apple computers were assembled by hands in the garage of Jobs’ parents. As more people wanted to buy then they moved to a bigger place and hired more people. By the end of the year, Jobs sold a million computers and it was obvious that personal computer was a big market. By that time Apple was already well established. Steve Jobs wrote: “My friend Wozniak wants to build it as a kit to hobbyists but I have a different opinion. My vision is why not built for anybody who wants a home computer. As long as they are willing to pay, we will build to meet their need, we must grow the company beyond the small market of hobbyists, we must target the whole world.”
As students, Larry Page and Sergey Brin wanted to search the web. But existing search engines were not as good as they could be. Since they had the technical expertise both knew that they could do better. They started as a project in the university but as the web grew bigger with more contents, existing search engines were not good enough and often crashed. Larry and Sergey started a small company in nearby building to provide a new tool to search the web which was faster, better, and easy to use. As happened with Apple, as more and more people were switching to Google, they realized how big their market could be and that was how Google was established.
What clearly distinguish Apple; Google from others was their startup ideas and technology. Rapid change in technology always opens new opportunities. Sometimes the change is obvious but sometime it is not. It takes a technical people who follow the trends to identify the opportunity and seize it before somebody else does. With Apple, the key technology was the improvement of chip technology that replaced transistors by integrated circuits that allowed Steve Wozniak to design a small computer. With Google, the key technology was the fast growing of web contents on the Internet. As more people were surfing the net, they wanted better and easy to use search engines.
The key success of startups is that they create new ways of doing things based on new technology. Entrepreneurs are people who understand technology and ask themselves what they can do with this technology to provide faster, better, cheaper way of doing things. From this simple idea, they start to imagine what could happen and establish a vision of what it could be. With a clear vision, they begin to model their business with enough details to ensure that they can achieve success.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
