On the game of startups

What game are you playing really?

To run a company as best as you can, it seems that you need to be very aware of what game you are playing.

Founding and running a startup [1] is kind of a game of its own when compared to founding and running other types of companies (e.g., consulting businesses [2], restaurants, travel agencies, industries, etc.), just like running 100m sprints at the Olympics is a discipline of its own and very different from the Marathon, and even more different from doing half-Ironmans as a hobby or jogging on weekends to lose weight.

The game of startups [3]

Why is the game of startups so specific? Or, what's really the game 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 game of startups is the game of building the biggest companies in the shortest time possible [4].

Startups and venture capital

Venture capital is tightly associated with the game of startups but is not a requirement per se. One can totally play the startup game without it. It's just that in order to win, chances are that one will move faster if one uses the help of 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 successful swimmer uses them to some extent, just like just about every successful startup uses venture capital to some extent.

The game changes as the company grows

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

From founding to pre-IPO, for example, the game may be indeed to build as big a business as possible quickly; from pre-IPO to IPO and beyond, the focus of the game 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 the game of trying to make the company endure the test of time. We could even argue that the best founders are the ones that correctly time these changes and make them successfully (e.g., founders of Airbnb, Facebook, Stripe, etc.)

Seeking the best advice

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

Notes:

[1] For a great defintion of what a startup is, read startup = growth, by PG. TL;DR, a startup is a company that's designed to become very big very fast.

[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.