In honor of Denver Startup Week, I’d like to try to answer a question we’ve thought about at Crowd Favorite: are we a startup?
In the most traditional sense: no. Startups, as they’ve come to be known, can typically be seen as small technology-centric companies founded by a handful of individuals to build a produce or service, sometimes for businesses, other times for consumers. Most startups grow quickly, add employees, take on investments, and have some sort of exit planned.
On the other hand, design and development firms (or consultancies) like Crowd Favorite share a lot of traits with startups:
Talent
We hire from the same pool of smart individuals: designers, developers, and even managers. These people typically sit at a computer, work on the web and solve interesting problems.
When hiring a designer, we’re all looking for someone who can create user experiences, solve business problems, and communicate visually. Developers are folks who see technology as a series of moving parts that need to work together to achieve the designed solutions. Managers can take various requirements and goals, turn them into milestones and deliverables, and see the process through.
Technology
We work on the web or, at the least, in the technology space. Designers use the same applications and share the same skills: Photoshop, Illustrator, HTML and CSS, etc. Developers speak many programming languages and often have worked with a handful and can move into others: PHP, Ruby, Rails, JavaScript, Objective C.
Culture
We work hard and like what we do: solving interesting problems with technology. We value freedom to get the job done, we understand the value of research, we appreciate resourcefulness. But we also feel that anything worth doing is worth doing well, and our work reflects that. What we put out into the world is a big reflection of who we are. We provide valuable services and we get paid for it.
Lifestyle
We come to the office to maximize the time we spend with our colleagues or we work remotely in a way that suits everyone, but we don’t clock in. We wear shorts, jeans, slacks, ties, polos, hoodies, t-shirts, sandals, sneakers, slippers. We have ice cream in the freezer and beer in the fridge. A team lunch together to talk about technology is a regular occurrence. We work until we’ve put in a good day’s work and never consider working an 80 hour week.
While startups and design and development consultancies are often working on the same kinds of problems in the same space with the same kinds of people, we’re different in at least a couple of ways:
We don’t typically work all day, every day, including weekends. We have families and outside interests and those are more important than “hustling” to get to launch or investor day. While we love helping a client launch a product, or website, or campaign: we manage reasonable expectations, timelines, and budgets and stick to them without sacrificing our lives.
We also don’t aim for a huge exit, we tend to grow at a steady pace, learn more as technologies and companies evolve, and plan to continue doing the work that looks most interesting to us at any given time.
Was Apple ever a startup? I don’t think so. Is a large agency like Crispin Porter + Bogusky? I wouldn’t say so. Is Crowd Favorite? No. But we’re all working together in an ecosystem that’s no longer an isolated community of designers and developers. This is the new “industry” and the lines between “being” a startup and working “amongst” startups are becoming blurry. The community in Denver know this which is why you see a lot of participants you might not expect: MapQuest, EffectiveUI, SpireMedia, just to name a few.
I look forward to visiting some of our neighbors at the startup crawl later this week.
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Hi Devin,
I grappled with this question for over 3 years while running a startup-focused meetup group called Atlanta Web Entrepreneurs. The first thing I found that helped me understand were these two articles from Arizona State University on the nature of Entrepreneurship:
http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1275
http://knowledge.wpcarey.asu.edu/article.cfm?aid=711
In a nutshell there are Replicative Entrepreneurs and then there are Innovative Entrepreneurs. In summary the former serve the existing economy by pursuing existing known business models and the latter grow the economy by creating new business models. While a consultancy may be working on the same kind of problems as startups, their business model is to serve existing companies in the economy.
Then I found an even better way to look at it from Steven Blank (from http://steveblank.com/2012/03/05/search-versus-execute/):
“A startup is a temporary organization designed to search for a repeatable and scalable business model.” That sealed it for me; I now know how to identify a real startup when I see one.
-Mike
P.S. Of course many consultancies are wannabe startups seeking to use client revenue to fund startup launch, mine included. But most never succeed in that because the activities and approaches one must take to be a startup that finds a repeatable and scalable business model are often at odds with what makes a business a competent consultancy. FWIW.
Thanks for the thoughtful comment, Mike. This gives more some good reading to follow up on. I think your recent conclusions are spot on and have helped frame the thinking a bit better for me.
Worth considering, while this is an interesting analysis does this level of nuance matter? The goal of communication is understanding, technical accuracy may sometimes hamper that.
If someone already has a useful “I know what a tech startup is” idea, describing your web consultancy as a “tech startup” may be the easiest way to give them a relatively accurate perception of what you do.
Of course, if you’re delving into the business model details it would be appropriate to make sure Mike’s findings are covered.
Hi @Alex,
Your comment made me think it would be good to elaborate.
The reason why I grappled with the question is that as a Meetup organizer I found the replicative web entrepreneurs needed and were interested in very different topics than the innovative web entrepreneurs. I also found that the more I catered to one group the more I would loose interest from the other.
As I was more interested in forming a peer group of innovative entrepreneurs I first had to understand why my gut was telling me they were different although initially I couldn’t explicitly describe to myself or others why. Understanding this helped me understand the next steps to take with my group and that was helpful. Of course that was before I burned out on organizing meetups, that is. :)
FWIW.
-Mike