Categorise your startup or die

Nowadays everyone and their mothers are calling their projects a “startup”. This makes for a problematic scheme where words of advice or play books are constantly misapplied. In a young business’ life a slight misapplication will wreak havoc in the long term trajectory of it’s journey. A secondary problem would be the misalignment of founders, employees and investors. The last problem would be mis-prioritising what to focus on in the early stages. In a very resource constrained condition this could be fatal. These are why I have always thought its important to categorise startups.

Startups, I think, have a good number of dimensions that determines their classification. This attempt on such a deep subject will undoubtedly require time but in the spirit of lean I will do my minimum analysis on it and improve it over time.

First to consider would be the startup’s primary goal. The founders should state if this is a revenue, acquisition or an IPO chasing venture. It’s called a primary goal because there can be a secondary outcome. A revenue chasing startup can switch gears to an acquisition or IPO focused if the business is growing beyond expectations.

Next up would be the market type. Is the startup targeted for consumers, Fortune 500 companies, SMEs, educational institution, government or scientific or industrial laboratories? The target market governs the approach to market which is a huge task of a startup perhaps its biggest.

The third dimension would be the product’s category and subcategory. This is a very important one since this is the part where the viscosity of the startup’s path can be more or less determined. The super-categories are Software, Hardware, Hardware and software, Software and People. This is ordered from easiest to hardest.

So with these 3 dimensions, one can start knowing apples from oranges and get the benefit of a more organised way of aligning interests, building play books or optimising events.