Startup part 2

A startup is NOT a company yet. It is only a “Temporary organization” that is still searching for a profitable way of doing business. You do not know whether you are successful or not. You do not have customers yet. And you have not making money yet. Actually you are spending money, your own money or money from your parents or relatives so you must be careful and do not make mistakes that others had made. As an entrepreneur, you have idea but you do not know if you can make money with that idea or not. That is why you are searching for customers to test your idea. To do that you must follow a DYNAMIC PROCESS, as it will change. What will happen if your idea is not good? What will happen if there is no customer? What will happen if there is no market? In that case what would you do?

Most people would quit but as an entrepreneur you do not quit (You have answered honestly in the personality test that you like challenge; you have self-confidence in your ability to continue even you fail many times; you are willing to learn new things and continue to learn from your failures). If thing does not work as you have expected than CHANGE the idea and START AGAIN. This is why I called it “DYNAMIC PROCESS” as it is designed for startup and failure is a part of it. Basically, failure is designed into the process that allows you to change the original idea to another idea until you find the “right idea and opportunity”.

Big companies follow a process, a “DEFINED PROCESS” because they already have customers and know their market well. They know exactly who the customers are, how big the market is, and how much they can sell their product for. Their business is known and well established. To manage its business, company must have organization structures and people with roles and responsibilities. The CEO is responsible for strategic vision. The president is responsible for managing the company operation etc. If company succeeds, owners give the president big bonus. If company fails, owners fire the president.

Startups follow a “DYNAMIC PROCESS” because they do not have customers or know their market yet. That is why I always suggest people do not follow the business model of established company. Forget the tittles like CEO, CFO or President as it is meaningless at this time. You are just a small group of entrepreneur who are learning, and seeking a new way to do business based on an idea. You have limited money so you must learn fast and adjust quickly. Time is important as opportunity does not wait, you must seize it before somebody else.

Many people do not agree with this concept. They often asked: “How can you run a company with no one in charge, no president, no managers, no sale representatives, and no secretaries?” or “How can you do business in an unorganized way like that?” These people are biased by business theories that they learned in school. The business school teaches students to be managers, accountants, financial analysts, sales and marketing representatives etc. so they can work for established company where the business is known, customers and market exist. Business schools DO NOT teach you how to start a company. Business professors specialize in accounting, finance, management, marketing etc. They know how to write a business strategy, they know how to develop a business plan, they know how a business operates; they know how the stock market works or how to invest money. They learned all of these from many years of data collection and analysis. They develop theories based on successful established companies.

Technology startups are new. The history is short and not documented. Steve Jobs did not write business textbooks. Bill Gates did not explain problems that he faced during the early days of Microsoft. Most business school professors, who never start a company, but are told to teach entrepreneurship often based on what they know and created training program based on established business. They often starts with company strategy, organization structures, roles and responsibilities, departmental functions, market analysis, business laws and regulations and sales and marketing. None of this is useful for startups. Graduates from these programs, often lack experience and knowledge in technology, start their own company and failed.

Entrepreneurship is NOT about how to MANAGE a company. It is about how to START a company. Of course, when you succeed, you will need strategy, business plan, marketing plan, organization structures, roles and tittles etc. Business school training can teach you to manage a company effectively and efficiently. However to start a company, grow small company into big enterprise, and making a lot of money require a completely different education and training.


1) Is it possible for a business student with no knowledge or experience in technology (Computer, Bio, and Nano) starts a high technology company?

2) Should technology entrepreneurship be taught in business school or computer science school?

3) What is the foundation of technology startups?

4) What is STEM and why it is important?


  • Blogs of Prof. John Vu, Carnegie Mellon University

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