On the "sport" of startups

Unlocking Potential is a newsletter by me, Kiko Homem de Mello, CEO of Qulture.Rocks

You can read most of these posts from Unlocking Potential on the Qulture.Rocks blog.


To run a company as best as you can, it seems that you need to be very aware of what "sport" [1] you are playing.

Founding and running a startup is kind of a sport of its own when compared to founding and running other types of companies (e.g., "lifestyle businesses" [2], restaurants, etc.), just like running 100m sprints at the Olympics is a discipline of its own, when compared to, for example, running marathons competitively, running the half-marathon of half-Ironmans as a hobby, or jogging on weekends to lose weight.

The "sport" of startups [3]

Why is the sport of startups so specific? Or, what's really the sport of startups?

The game of startups is not just the game of starting new companies. Startups are special kinds of new companies designed to grow really fast. The sport of startups is the sport of building the biggest companies in the shortest time possible [4].

Startups and venture capital

Venture capital is tightly associated with the sport of startups but is not a requirement per se. One can totally play the sport of startups without it. It's just that in order to win, chances are one will have to use venture capital. It helps to think about Olympic swimming: fancy wetsuits are not a requirement per se of doing the freestyle 50m, but just about every swimmer uses them to some extent, just like just about every startup uses venture capital to some extent.

The sport changes as the company grows

One specificity about the greater game of building and running companies is that the player playing the sport usually changes sports as the "game" progresses.

From founding to pre-IPO, for example, the sport may be indeed to build as big a business as possible quickly; from pre-IPO to IPO and beyond, the focus of the sport changes slightly to building the most valuable business, even if that means sacrificing growth a bit; as time progresses, a founder may switch gears and play a sport of trying to make the company endure the test of time.

Seeking the best advice

Seeking (and giving) advice that's good requires one to understand what discipline they are seeking advice for, and as important, what disciplines the people you ask is qualified to give advice on.

Notes

[1] I think the sports metaphor is a good one. Bear with me.

[2] Whatever that means.

[3] Let's just recursively define "startups'' as the types of companies one tries to build when one plays the sport of startups.

[4] By the way, the sport of startups is not really to build the biggest companies in the shortest possible time but to build the most valuable companies in the shortest possible time. It's just that in the early stages of a company, size [5] is probably the best proxy for value.

[5] We could also discuss what "size" means. Usually, it's revenue, but sometimes some other thing will be measured, such as the number of users a service such as a social network has if the people playing the game think that users are a reliable indication of future revenue and then value.