Founders + Entrepreneurship.

Differences Between Startup and Entrepreneurship

Generally speaking, entrepreneurs engage in business to accumulate profits, whether for personal gain, to grow a business, to benefit a non-profit organization or for philanthropic reasons. Entrepreneurs can acquire profits in several different ways such as creating products, starting or investing in companies, purchasing resources, or facilitating an acquisition.

A startup is a company that begins with an idea of how to fundamentally improve a product, service, or fill a need within an industry. The startup’s founder takes the first steps towards turning the idea into a reality, building a company based on the most efficient way to bring a product to the marketplace. Many startups are created with the intention to one day be acquired by a larger company while others are able to leverage their success and become a stable, singular entity. 

What is a founder?

Startup Founder – A startup founder takes the first steps in turning an idea into a full-fledged service or product. Startup founders recognize a need for a particular item or service and set about finding ways to fill these gaps. Most startups require heavy lifting and tireless hours, especially early in their development, so founders do not generally create startups to acquire wealth. Rather, founders believe that their ideas can change the way people interact with their world and each other in a fundamental way.

Cofounders – Founding a startup requires a tremendous amount of output, a vast pool of knowledge, and diverse experiences bringing ideas to the table. From deciding upon the logistics of how to launch an entirely new idea into a marketplace to the daily needs of running any business, startup founders often work around the clock to make their business a reality. Many startups are able to succeed despite these demands by splitting up the workload amongst cofounders. Bringing on a cofounder in the early stage of a startup allows a company to become more nimble — one founder may be devoted to researching and developing a product while another may focus only on networking and acquiring funding. In exchange for a percentage of a company, cofounders have the potential to significantly reduce the amount of time required for a product to hit the market.

CEO vs founder – As a startup transitions into a company and products begin hitting the market, the role of CEO must be established. A CEO is responsible for overseeing the work of other top-level executives throughout the organization, ensuring the startup remains vigilant in its goals and realistic about expectations. While a founder will often take on the CEO title, that is not always the case. A founder may instead opt into taking a more hands-on position and leave it to a more experienced person to lead their company.

What is an Entrepreneur?

Types of business entrepreneurship

There are many different forms of business entrepreneurship one can pursue, each possessing a variety of benefits and costs of entry. Entrepreneurship requires a great amount of discipline, foresight, and focus, so pursuing the right form is crucial to success. Entrepreneurship can be categorized based on markets and entrepreneurial goals, with some of the most common forms including:

Social entrepreneurship – What separates this form of entrepreneurship from others is the end goal — social entrepreneurs don’t seek to make profits or accumulate wealth. Instead, social entrepreneurs build nonprofits and organizations that work toward facilitating societal change. 

Small business entrepreneurship – Small business entrepreneurship is the most common form of entrepreneurship and provides multiple entry points for entrepreneurs to begin exploring and finding a niche. Most entrepreneurs starting small businesses seek to build a sustainable lifestyle for themselves and their families on their own terms, with independence being a primary driving factor. Most small businesses do not seek funding from venture capitalists.

Large company entrepreneurship – All companies, particularly large companies, must continue a cycle of innovation to maintain relevance amongst their customer base. Entrepreneurs at large companies are focused on the design of new products and services to keep up with market demands. Large companies can also acquire smaller companies to keep their products and services fresh.

Startup entrepreneurship – Startup entrepreneurs seek funding from venture capitalists to bridge gaps in markets and create products that fulfill a clear need in the world. Startup entrepreneurs work to develop a product and company over time and are dedicated to successfully bringing products to market over maximum profitability.

Entrepreneur vs Investor – Often, entrepreneurs are owners of their companies or are heavily involved in the operation of the business. Entrepreneurs keep tabs on what a company aspires to achieve and the means necessary to achieve its goals. However, entrepreneurs can also be investors who are independent of companies, offering direct avenues to funding in exchange for a stake in the organization. Investors in large companies are often given a Board of Directors spot to remain up-to-date on a company’s opportunities, threats, and current operational status.

Successful Traits and Qualities of a Startup Founder

Startups are created to meet a variety of needs and come in several different forms. Every founder has a unique goal they are setting out to accomplish with their business, however, many have similar characteristics that steer them towards success. Some of the traits that are most necessary to succeed as a startup founder include:

Vision – The first step in every startup’s story is solidifying the idea that will bring a company into the public eye. By ensuring they have a well-rounded perspective on what a company’s growth and path to market looks like, founders can set their startup on a successful path.

Passion – For a startup to succeed, it must produce products or services that fulfill a specific need within a market or industry. Founders must be dedicated and passionate about unlocking a solution to this need while continuing to grow their company and compete in crowded markets.

Focus – Along with the drive to keep refining their product, startup founders must keep a company’s goals in mind with every decision they make. Without focus, startups can get caught up in pursuing ideas that distract them from bringing their big idea to market. Co-founders help each other remain focused on a company’s overall goals through a sense of accountability and checks and balances. 

Instinctual thinking – While focus and vision are top priorities for any startup founder, the most successful founders know when to follow their instincts and go with their gut. Market changes and new challenges inevitably emerge while laying a company’s groundwork, so startup founders must be able to process information quickly and make swift decisions.

Persistence – Every startup requires a tremendous amount of time to succeed, and along the way, many challenges may threaten a product’s ability to hit the market and a company’s ability to be profitable. Startup founders must be able to see these challenges through and keep a level head to lead teams to success.

Networking & entrepreneurial chops – One commonality amongst all startups is funding. Founders must be able to seek out and receive funding from investors to truly build a robust organization. This means that attending networking events, getting to know key industry investors, and having a well-thought-out pitch are all crucial parts of growth. 

Foresight – No founder can see the future but every founder must be able to analyze data and have strong insights into their industry to keep up with ever-changing consumer needs.

Traits and Qualities of Successful Entrepreneurs

Many of the traits required for a successful startup founder also apply to successful entrepreneurs. Regardless of the type of entrepreneurship one is pursuing, maintaining a sense of instinctual thinking, passion about a market, and foresight into how consumer needs may develop is essential to entrepreneurial success. Additionally, there are a few other traits that benefit any entrepreneur or investor.

Risk tolerance – Whether starting an organization or investing in a startup, the risk of failure always carries a high probability for entrepreneurs. Entrepreneurs must ensure they have the security and wherewithal to withstand an investment gone wrong and move on to their next pursuit. No successful entrepreneur will have a perfect investment record. 

Flexibility – Becoming an entrepreneur means working with a variety of people with a variety of ideas. Entrepreneurship requires the flexibility to acknowledge others’ ideas and find the compromise that works best for a product and company, regardless of personal feelings.

Collaboration – In addition to being able to compromise in business, entrepreneurs need to be able to collaborate with their partners to get the most out of a company. Great products are developed by combining the expertise of multiple stakeholders with insight over a product’s place in the marketplace, so entrepreneurs must come prepared with their best ideas to help a company grow.