Developing a Startup’s DNA

The creation of a 'Startup DNA' is one of the first processes we work with people on to transition their idea into an early stage company. The output is a foundational document that sets out principles that drive the unique value of a company.

It gives an idea a purpose and identity of its own, which is important for communicating the idea, attracting the necessary people and creating initial momentum.

Character illustration of someone communicating an idea using startup DNA concepts

What does Startup DNA mean?

A Startup's DNA contains principles for why the business should exist, what's being created, what makes the company different and what drives decision making.

It describes the elements of a business that can't necessarily be seen or touched like you can a product, but are just as important for defining and driving the existence of a company.

We were first introduced to the term from our friends at The Happy Startup School.

Why is Startup DNA important for business development?

There are good reasons why having a strong 'Startup DNA' helps. Before we get into how you can create the Startup DNA for your business, here are the reasons why it's valuable:

  • It enables founders to communicate what they're doing in a compelling way before they have anything physical to show. People buy into a compelling vision. They'll engage with a person and their idea in a way that allows the founder(s) to collect specific knowledge that will shape the idea into a valuable product.
  • It drives action, for the founder and others who can add value. This has a lot to do with human physiology. Humans have a part of the brain called the Limbic System, which responds to emotional stimuli and drives humans to take action. When trying to sell something, whether it be an idea, a product, a job opportunity, or an investment opportunity, having a strong emotional stimulus helps. People usually also need some certainty of direction, which satisfies the more logical part of the human brain and provides direction for emotional energy.
  • Startup DNA provides a foundation for building a company's brand and culture. It gives those involved an idea of the identity of the company and what it stands for, which are important influencers of both brand and culture.

The key Startup DNA variables:

These are the factors that we consider as part of Startup DNA:

  • Vision or Purpose - provides an emotional hook
  • Mission - creates certainty of direction
  • Values - set of rules to guide decision making
  • Story - a compelling way of communicating what the company does and why.
  • Philosophy - the view of the world that the company is built on and what makes it unique.

“Values matter. A lot. In a hypercompetitive world where technology eats at every advantage you have over time it is good to have unique and distinct values that you live as a company. That’s a form of differentiation that is not easily copied. It matters and is at the core of building great companies. ” — Fred Wilson, VC


In the next section, we describe each of these variables and provide the question to help early-stage founders define the Startup DNA for their company.
Startup DNA Infographic, covering vision, mission, values, story and unique philosophy

Vision and Mission

We describe the vision as the 'why' that drives the company and the mission as what the company is creating to achieve this.

If it helps, think of the vision as the outcome that the company is working towards, e.g. a world where...., and the mission as the vehicle for getting you there, e.g. a web platform to connect...

Below are some questions to help founders think about the vision and mission for the company they are creating.

If you are working through this, we recommend taking out a piece of paper and writing the answers down.

Vision - why the company exists

Questions to consider:

1. When it comes to your idea or business, what do you feel passionate about, or driven by?

2. What change do you want to see in the world, or in your industry?

3. What experience have you had that makes you want to start this business?

My company Vision is:  [add in the first version of your Vision here, it doesn't have to be perfect yet]

Mission - what the company is creating

Questions to consider:

4. What are you going to create through your business?

5. When are you going to do it by?

My company Mission is: [write down the first version of your Mission here]

Values

Values are a set of beliefs that guide decision making. Having a set of values that the company does not compromise on helps with leadership and governance.

Questions to consider:

1. What are the principles that you would like to guide your decision making now and going forward (your company values)?

2. Why are each of these principles important to you/your company?

These values often change as founders grow and learn more about the direction of the company and what principles are important for guiding their decision making.

Story

The most effective way for founders to communicate what they are trying to accomplish by starting a company is by telling a story. Stories are engaging for people, and when told well, make it easier for the listener to correctly understand the reality of the situation.

The best way to tell a story is how humans have always done it, using a beginning, middle and end, with a key character at the heart of the journey. In this case, the character might be the founder, or someone else who's problems triggered the idea.

Question to consider:

What is your story, or the story behind your idea? Use the structure suggested above.

Unique Philosophy

This is the founder's unique view of the world and how it will shape the product they are developing and the experience they provide their customers.

Questions to consider:

  1. What is the current status quo when it comes to the industry or area you're building a business in? (e.g. fee structure, customer experience)
  2. What do you do that is different from everyone else?
  3. What is different about the experience you provide?
  4. How do you look and/or sound different from everyone else?
  5. How can you make this more apparent?
Vector illustrating demonstrating the unique philosophy of a founder, which is a component of Startup DNA

Other Considerations

When explaining an idea to someone, a founder can share the various elements of their Startup DNA to see what sticks.

Personally, I find that sharing the story behind the idea tends to work well, along with the short term vision or mission. Sometimes the big vision or mission can be a little bit much for people to believe and hard to explain in the early days of starting the company.

Observing how people respond to what is communicated and their responses, such as the questions they ask, the stories they tell or the information the relay, is a great way to help develop the pitch.

Culture, Brand and Strategy

Startup DNA provides a foundation from which brand, culture and the strategy of your company can develop from.

We'll be posting more on culture, brand and strategy in the future, so make sure you're signed up to our community to be kept in the loop.

Conclusion

If you are someone working on developing an idea, or you're a founder with an existing company, we hope this process has helped you to get some of the thoughts that are racing around in your head down into something that you can consider with more direction.

If this is an area that you'd like additional support in, you may be interested in our Ideas You Can Execute Program, which focuses on this stage of idea development.

Other resources you might find useful:

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