Venture Capitalist at Theory

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2 minute read / Aug 30, 2012 /

The tension between predictability and creativity

In every one of my conversations with Peter Lehrman, founder of AxialMarket, he always speaks about AxialMarket as “the business.” Never the company, the startup or any other word.

At first blush I thought it was a trivial semantic difference, a New York-ism, but over time I’ve come to realize this word choice marks a significant difference that manifests itself in culture, product and go to market.

Calling any company a business connotes a formality the word startup doesn’t share. A business is serious. A business is a stand-alone self sustaining entity. A business evokes thoughts of goals, revenue, profitability, execution and a performance mentality.

On the other hand, the word startup feels exploratory and casual and evokes images of tshirts, jeans, hacking, electric scooters, experimentation - a culture and brand image startups have actively cultivated.

It’s not to say many startups aren’t performance-driven organizations using management techniques like scrums and Trello cards, but startup culture doesn’t overtly celebrate blocking and tackling as success. Nor am I saying businesses don’t embrace the practices that startup culture uses to build innovation engines. They do. Startups and businesses learn from each other.

In fact, startups often evolve into businesses. A startup may start as a product and sometimes remain a product forever, eg Instagram, Blogger, Flickr. Sometimes startups become businesses, eg YouTube, Twitter, Facebook. Sometimes businesses are just born that way, eg Yammer, ZenDesk, LinkedIn, Square, AxialMarket.

When a startup evolves into a business, it introduces systems to create predictability. Why? Predictability is valuable. It helps with hiring, capital raising, morale, product planning, marketing, and s oon.

The best businesses are often called machines because they embody this characteristic. Apple is a consumer products machine. They predictably create insanely great devices. Google is a revenue growth machine - 30% y/y growth every year since they have been a public company - predictably.

I think every startup, company and business must maintain tension between creative chaos and a drive toward predictive performance. That’s how they grow and innovate and win. There are many paths to achieving success. Some founders choose to begin as a startup. Others, like Peter, choose to begin as a business. But despite the starting point, each type of company blends skills from the other to succeed.

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