Buckets of Innovation

Lessons learned from attempts to codify the startup world.

Buckets of Innovation

Lessons learned from attempts to codify the startup world.

Over nearly a decade in entrepreneur support, I've had a front row seat to several startup community "categorization" projects. The practice of categorizing entrepreneurship is not new, but it's recently become productized.

Sector maps are everywhere. A quick scan of Crunchbase, Pitchbook or CB Insights reveals the modern obsession with industry mapping and startup-classification-as-a-service. Despite these efforts, practitioners still lack a universal standard and categories remain subjective. Even Michael Scott has a take:

As for tactical support, these days nearly every resource for entrepreneurs (courses, toolkits, Slack workspaces) is by necessity organized around topics. Without a universal standard, however, many organizations have put extensive time and effort into creating their own frameworks, which often span fragmented tools and inconsistent spreadsheets.

I've led these data projects a few times now, and it's always been an interesting challenge. A comprehensive data strategy is too often a luxury for entrepreneur support organizations and, once created, it's hard to maintain.

As Union has taken shape, we've worked to lay a foundational data layer for the communities we serve. Along the way, I've had to personally "product manage" a list designed to encompass every startup industry, topic, funding stage and more.

Our list is decidedly imperfect, but through trial and error I've learned a few lessons along the way.

Lesson #1: Listen to the voice of the entrepreneur.

Roughly 5 years ago, I was lucky enough to be part of a team that created a global startup pitch competition, scouting early stage startups from 75+ cities across four years. The competition for prize money and investment required a thorough application and vetting process, but on stage it came down to a 2 minute pitch.

Great founders know their game front-to-back, and could speak for hours about their market, personas and strategy. The trick was to boil that all down to 2 minutes. When the best founders stepped on stage, they presented their companies as a promising story – not as an entry in a Dewey Decimal system.

I heard founders in their own words, and took note when I encountered new terminology or a genre-bending idea. Founders who seek a concise, relatable tagline often describe their startup as "Uber for X" or "Shopify for Z" –  I recently saw  "if [product 1] and [product 2] had a [sector] baby."

A matrix of "X for Y startups" by Andrew Chen

When it comes to learning entrepreneurial concepts, founders aren't going to get much out of a tag like "marketing resources." The advice they seek is not only hyper-specific to their product, market, stage and industry, but also ruthlessly tactical, sharpened down to the scope of the painful challenge at hand (launching on Product Hunt, driving SEO for specific search terms, etc).

Of course, these painful challenges don't fit nicely into boxes, but therein lies the lesson. The voice of the entrepreneur tells all: true innovations define their own categories, not the other way around.

Lesson #2: Bigger is not always better.

In my earliest days working with startups, I was on the ground floor at 1776, a global incubator and seed fund innovations tackling the world's biggest challenges. Our focus was to support entrepreneurs in 8 regulated industries.

The original industry list on Union focused on 8 key sectors. 

As 1776 supported more startups in these industries, Union's database grew wider and deeper to ensure all sectors and sub-sectors were represented. The industry list grew almost by default, especially when subject matter experts got involved and requests for help got specific.

As with many entrepreneur support organizations, 1776 also maintained a thesis on "how a startup ought to grow." This thesis translated into Union as a rigid conceptual pedagogy with self-directed learning pathways and associated tags.

Just one example of a "startup growth" framework.

After Union spun out of 1776, the market pulled us to revisit and expand our list. We absorbed customer suggestions, examined government taxonomies and referenced industry publications. Luckily, we didn't go so far as to crowdsource our list, but still ended up with far more tags than practical.

A snapshot of Union tags, 2018-2020.

In hindsight, we got a bit caught up in the academics of classification. A list this deep and wide might please some customers, but dilutes value for our users. I learned that a tagging system should only be as big as required for it to be effective, and no bigger.

Lesson #3: Mark it up as a work in progress.

In my most recent effort to revise our list, I tried my best to remember these two lessons. I listened hard and consolidated harder. It took hours, but I cut our list of almost 600 tags in half, culling our bloated taxonomy into what I hope is a more concise, actionable and meaningful list.

In the end, however, I've realized this work will always be "in progress." The splintering of innovation will branch out forever, tech hypes will come and go, and startups will continue to chart their own pathways from A to B. And let's be honest, every startup is a work in progress, but that's no reason to write "Acme Corp (WIP)" on a landing page.

Creative destruction constantly bends reality to new opportunities. Sectors evolve. Startups pivot. The actual rate of innovation will always outpace any attempt to box it up with a nice little bow. I learned that while these buckets feel important, it's really all about the water they carry.