Someone asked me what I do and I had to decide whether to say “I work for a small product development company” or “I work for a web based startup company”. Invariably, the former received “ho hum” replies and the latter received “aah ooh” replies. The kick of “aah ooh” replies not withstanding, the question is still very real in my head. Are we still a startup?
The way I see it, there are two definitions for startups. The term startup company according to Wikipedia :
“A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets.“
This is the strict definition based on certain statistics about the company that many people consider as correct. Lets check its validity.
Take Google Apps for example, it was in beta (‘phase of development’) until July 2009. Does that mean it was a startup until then? The fact is that software these days is continuously under development. So that cannot be part of the criteria determining the definition of startups. Nor can age or size of the company because well, Steve Jobs described Apple as the “Biggest Startup on the Planet” at the D8 conference this year. Some say that once a startup becomes profitable, it becomes a company. Twitter has been ‘in operation’ since 2006, still has not figured out a business model and has a user base thats probably second only to Facebook. Now where does that leave Twitter? Lets face it. Definitions based on turnover, size and age just don’t work anymore.
The expression startup company now evokes an emotion that goes beyond numbers and figures.
Culture
Startups are expected to have a clearly distinguished cool culture. Bureaucracy is definitely frowned upon and so are cubicle farms. Work clothes are usually t-shirts and jeans and everyone is a decision maker in the company. Work and fun are interchangeable. Millions of Kilobytes of text have been written about startup culture. For starters, take a look at Brian Halligan’s (CEO and co-founder of Hubspot) “Startup Culture Lessons From Mad Men” and Greg Gottesman’s “Thirteen key characteristics of a great startup culture“. The reason many people still consider Google to be a startup is because of its famous work culture. Not because its products are ‘officially in beta’ forever.
Funds
Startups always function with restricted funds. They are always trying to cut costs by using open source tools, having fewer employees, doing more things at the same time and working longer hours. This can be true for various reasons. The key though, is that even those startups that find millions in funding through VCs and Angel investors don’t ever splurge money on 6 figure executive bonuses and private jets. Expenditure is disciplined. You will find more startups spending money on keeping a well stocked fridge and a foosball table in the office than on getting a new mahogany desk or chandelier. Again, the culture is what drives this habit. Making work fun for everyone takes precedence over luxurious spending. Its so obvious that big corporations should write it on a big hammer and bang themselves on the head with it for missing it.
Nature of operations
It is possible that a new product in development in an old company functions like a startup. A lot of development and research will be going into the product and business model. A handful of people will be in the team and the goal would be to make the product a business in itself. Take DoAttend, our event organizing tool, for example. Although its a product of a 9+ year old company, the DoAttend team still functions like a startup and is itself only a few months old. So think about it. You may be working for a company thats been around for a while, but what is the nature of your work? Are you part of a newly formed, small and tight team with a specific product to make? Are you looking to make it a profitable business in itself? Are you and your team self motivated and driven toward the common cause of making the product successful?
Startups are no longer merely a category of companies. They reflect a whole new work culture and nature of operation that is inspiring the next generation. Startups mark the arrival of a new Renaissance in work culture. The internet and the success of startups has shown that small companies can be disruptive on a large scale. This has in turn sunk into society so much that you would rather call yourself a “startup” than a small company now. Its a lot more media and employee friendly. Think about it, a true definition endures as an emotion. So what emotion does the word “startup” evoke in you?
Its no surprise therefore, that although we are going to be 10 years old soon, Tenmiles is still a startup at heart. We believe in, function under, follow and promote startup culture.
My mind is now at rest. I will continue to say that I work for a web based startup. I can now enjoy the “aah”s and “ooh”s with a clear conscience.
How else do you think the definition of a startup has changed? Feel free to let us know in the comments.
Hi Vinay,
Nice Article.
As you said, Startup could be defined as the work culture instead of categorization of the company.But I think factor of survival also makes a huge difference in a company. In a small company(by profits and cash reserves), you could not afford to make a mistake whereas in big companies, we can get time/money to correct those mistakes.
Regards,
Mugil.
Hi Mugil,
Thanks.
Like I said, startups always function under restricted funds. Expenditure is disciplined. And employees work harder in order to avoid mistakes. Culture, nature of funds and employee commitment all go hand in hand here in making sure that mistakes are minimal.
Well yes the culture part is ok and so is the cool quotient…But that is the most advertised part. However investor perspective can be slightly different…
It makes allowance for -
(a) betting on half-baked or never-baked ideas where you find it’s too risky to ask for your parent’s pension ;
(b) illusions of capability to thrive ;
(c) lifestyle businesses – can have a business card while waiting for a plum job.
(d) glorification of something that has a greater probability to fail without being dragged to a labor court for non-payment of employee dues; (Oh, they’ve been fed noodles and coke, yeah…)
(e) enjoying authority without responsibility;
(f) carrying on without knowing when to cut the losses and run because the losses don’t bleed you as much as it does the investor. And you are richer by experience and yeah, you look cool….
I think all those are angles that the investors should cover before investing. And I’m sure the good ones do.
For me, Startup is where every one enjoys the work they are doing, Period
start up – an object of observance in every ones radar…
I liked the defination of startup which states its with limited operating hiostory and researching. Although i work for a MNC with great global operations but in India they are still stratup as regards their understanding of the markets and operations.
For me startup is also surrendering your learnings and look at things with a fresh perspective.