Start-ups and established companies differ significantly in their purpose and structure. Start-ups, defined as temporary organisations designed to search for a repeatable and scalable business model, are high-risk ventures aimed at discovering whether a business model is viable. They are characterised by their agility and ability to pivot, adapting quickly to market feedback.
Contrastingly, companies are permanent structures created to execute a proven business model. Their primary function is to deliver value to customers and shareholders. They are designed for stability, with established processes and hierarchies in place to maximise efficiency and minimise risk.
Innovation within companies is often difficult due to their risk-averse nature. The fear of failure and the need for predictability often stifle creativity and experimentation. To foster innovation, companies need to create a start-up-like environment, where failure is seen as part of the learning process and not a catastrophe.
In short, start-ups are about searching, companies about executing. Misunderstanding this distinction can lead to failure in both start-ups and companies. Understanding and embracing these differences can help both types of organisations thrive.
Go to source article: http://steveblank.com/2014/03/04/why-companies-are-not-startups/