Part 2: The disparity in the “story” and reality of start-ups

In my previous post, I explored how the “story” behind a start-up often follow a similar pattern: the hopeful inception, the mandatory difficulties which are experienced, and then of course how triumph prevails and overcome all obstacles. These stories are not only compulsory amongst start-ups, but are evident within all mediums of entertainment, such as TV and film.

While I have taken issue with the way these stories have distorted the reality of what it is to start a business, I also believe they have encouraged poor decision-making amongst entrepreneurs. This is because the general public’s instinct is to root for the underdog, which in turn has put pressure on start-ups to build small and independent businesses. Such businesses though are precarious and vulnerable; yet entrepreneurs still persevere with them because the allure of vindication is so strong. We look down on businesses that have started with the support of much larger companies. I think of the coffee chain, Harris + Hoole, which was conceived by the siblings Andrew, Nick and Laura Tolley and supported by investment from Tesco. Criticisms often had a “wake up and smell the corporate hypocrisy” air around them. But what if these type of corporate partnerships provide individuals a much stronger chance of success? What if the kamikaze, high-risk option of starting a business wholly independently, using one’s own funds is on balance the worst way to do business.

Another corporate start-up is that of Tea Pigs. This business was conceived by two ex-Tetley executives Nick Kilby and Louise Cheadle, who do not own a single share in the company. In effect, they approached their former bosses with an idea and in return they receive a salary in running Tea Pigs. However, when people find out that such businesses are not the small, quirky companies they originally thought there is a sense of feeling “duped” and “miffed”.

The reason brands such as Harris + Hoole and Tea Pigs portray themselves as “independents”, is that they know it is exactly what the people want, and they know it sells. If the public were a little more aware of the huge risks that are involved in starting a business without the support of anyone else, then maybe they won’t resent individuals who start their companies with the support of large corporations.

If consumers though demand that the market place be full of independent and diverse brands no matter what, then we need a more robust support structure. In my opinion, this would have to fall to the government to be more involved in providing the necessary and substantial seed-funding that is required by start-ups. We should also utilise those politicians with a successful business background to be more directly involved with small businesses; the House of Lords for example is packed with peers who have received their honours through entrepreneurial successes.

Yet, if this form of state intervention is simply unpalatable for the public, then we need to be more forgiving of brands and businesses that have been started with the support of larger corporations. If we shun state intervention as well as denounce those that are merely posing as “independents”, then I fear we will encourage businesses to pursue the high-stakes option of small start-ups with their fairy-tale story as their main selling point.

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