That question is at the center of the Princeton Merchants Association’s Tuesday, February 19, member meeting. We’re pleased to open the floor to experts from the startup community, including our keynote guest, Cornelia Huellstrunk, executive director of the Keller Center at Princeton University. She and other panelists will share insights into start-ups and entrepreneurialism.
So what makes startups different from small businesses? After all, every business needs funds to get off the ground, right? And they all have some form of customer interaction.
But there are some key differences between small businesses and startups. Small businesses like retail shops or restaurants tend to be more about direct customer service; interactions between real people that run on passion and interpersonal relationships with customers.
Starts-ups, on the other hand, tend to be businesses for which tech is the product. These businesses can start small, but they tend to try to create entirely new industry models; to disrupt or revolutionize the way people live their lives. In the process startups often have to awaken customer demand for their product or service. They need to identify innovative ways in which to connect with the end user.
This all gives startups a distinct culture that many local merchants find fascinating. Small business owners, like so many of our PMA members, really want to know more about the tools, processes, and mindsets that start-ups have embraced — and about opportunities for partnership between PMA members and area startups.
This is becoming more important by the day as tech continues to be an ever bigger part of life and the customer experience. And that means that even mom-and-pop shops on Main Street need to understand how to engage customers and potential customers in more innovative ways. In the era of E-commerce and online consumption, small brick-and-mortar businesses now find themselves in an increasingly competitive environment and are called to innovate.
One thing startups can teach to small businesses is the concept of design thinking.
Design thinking is a solutions-based approach to problem solving, which is increasingly being embraced by entrepreneurs. But you don’t start with a specific problem, you start with a topic area. Do you need, for example, to create a service? For whom? Moms? Single people? Travelers?
Huellstrunk says the design thinking process builds on these parameters and generates questions that challenge — or maybe disrupt? — ingrained and assumed ways of thinking. The aim is to empathize with customers by thinking through what they want and need, rather than just handing them something irrelevant.
“No one wants to create a solution for a problem no one has,” Huellstrunk says.
Startups use the analytics they cull from design thinking and apply them to real issues they face; and many of those issues apply to small businesses. A restaurant and a social media company both want to get the best talent on their payrolls, right?
But when it comes to attracting talent, startups can teach small businesses a lot, especially if that small business is looking to attract younger workers. Startups tend to focus on younger adults and usually offer a less hierarchical environment to work in than long-established businesses. Companies like Google famously ditch the fancy titles and cubicle farms in favor of a more fun vibe, right down to their famous slide at its headquarters. If small businesses want to have that youthful, playful vibe, they need to focus on how younger workers think about and interact with work the way startups do.
Of course, small businesses have a lot to teach young startup entrepreneurs too. Understanding how to not create a solution for a problem no one has comes from knowing people, face to face. That’s why so many of our members have worked with Princeton University to help budding tech entrepreneurs understand the basics of running a business, from building a vision to creating the best customer experience possible.
The Princeton Merchants Association knows that the best relationships in business go both ways. And we welcome opportunities to partner with our community and our future game changers.
This story was originally published in the February 2019 Princeton Echo.