Most of the time, people interchangeably use the term “startup” and “early-stage company” like they mean the same thing. If you’re not in the business, you might think that this is fine. But if you work at a startup, it completely misses the point. Why? Because startups are radically different from the purpose of a company, and of course, misunderstanding your purpose from the very beginning of your journey is never a recipe for success.
By definition, a startup is a temporary entity, working to find a scalable business model that solves a compelling problem in society. It is a company that is in the initial stages of business.
Transitioning from the raw passion of creating something unique and innovative to leading a company that must function more traditionally to support the needs of its expanding customer base can be a serious challenge for many entrepreneurial-minded chief executives.
For instance, the transition forces them to decide whether they want to sell the company or the product off to another organisation so they can create a new vision. Products or companies can grow too big, too soon, and sometimes extra support is needed. The founder could want to maintain their role as CEO or move to another position. Either way, shifting from a startup to an established company requires another level of dedication and commitment.
The United Kingdom has a growing number of 672,890 that were founded in the UK in the 2018/2019 tax year. Now what do these startups need to brace themselves for the change to a bigger company?
Need for formal organisation
One key factor of managing a company is to have leaders accountable for each department in your business.
Need for policies
Employees need to have rules and guidelines, structure and organisation that they know, understand and can build foundations from. These are the backbone of your company’s culture. This will protect not only you but your employees as well.
Need to retain innovators
As the company starts to transform into a more mature and formalized organisation, there is a risk that it could lose the very innovators who put its product together and launched the company. You, the company must develop a strategy to retain these innovators by creating an environment that continues to foster and reward creative effort.