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May 09, 2007
How long is a Start-up a Start-up?
When talking about companies that are Start-ups, how do we define a start-up? By age? By revenue? By profitability? By Funding? (pre-seed, seed, Series A, Series B, etc?)
Is a company that was founded in 2000 and producing revenue in 2007 still a Start-up?
Or is a Start-up only a Start-up as a friend says “while it is losing money?”
As a judge in a “Start-up Competition” I am wondering how long a company is considered a Start-up?
Thoughts/Feedback/Comments would be appreciated here.
Tags: IVA, Startup, Israel, Red Herring, Jeff Pulver
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Posted by jeff on May 9, 2007 07:46 PM | Permalink
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Comments
Awesome question Jeff. I'd love to know what answer you end up with. Make sure you blog it :)
I've recently stopped referring to Scouta as a startup, but maybe that's my marketing gene kicking in.
Posted by: Richard Giles at May 10, 2007 11:56 AM
We are an ideas business, currently making PS2 games for Sony, which is profitable. But the purpose of the business is to generate commercial ideas, wherever we find them. We have an early stage VON project which is not connected with games. We think it counts as a start-up. What do you guys think?
Posted by: Toby Moores at May 10, 2007 11:13 AM
As long as there's more passion then revenue..
Posted by: Gadi Shimshon at May 10, 2007 06:48 AM
You're not a startup anymore when you can't fit your entire staff in one room at the same time. This is the only reliable metric. You can squirm around the definition with smaller people or a bigger room, but you're kidding yourself if try to twist into some revenue/funding/customers based metric.
Posted by: Pablos at May 10, 2007 03:53 AM
Used to be very simple. In traditional biz, startup phase was first 5 years of business. Once you got past Year 5, the wisdom was you were in it for the long haul and less likely to go bust.
In tech biz, they may no longer be considered a startup after first year IF they can generate revenues on their own. But I think people still look for longevity. Three years and you're already ancient in this space.
I don't think profitability dictates startup status. Nor customers.
I write a column for Entrepreneur and they consider startup to be under a certain revenue amount - $1 million. So what about the hundreds of thousands of companies who have been in business for 10+ years but will never generate $1 million in a year?
It seems to also be influenced by industry. I think a tech company can get out of the startup phase relatively quickly if they can at least generate steady revenues or steadily obtain financing over time. But getting your first $3 million funding infusion in the first 3 months of business doesn't suddenly take you out of startup status.
Bottom line - it is more based around time but that time can be shorter based on industry.
Posted by: Aliza Sherman at May 9, 2007 09:17 PM
Another good sign that you're no longer a startup - when you're the leader and you no longer trust everyone in the company, and need to codify things because you can no longer directly exert your own good judgement on who you hire.
Posted by: Christopher S. Penn at May 9, 2007 09:15 PM
To me, a company stops being a startup when it loses agility, when it can no longer adapt rapidly to a changing environment and no longer move with lightning speed. Generally speaking, the day you get an employee handbook that's longer than "Use your own good judgement in all things." is the day you stop being a startup.
Posted by: Christopher S. Penn at May 9, 2007 09:14 PM
Is it funding?
Is it revenue?
Is it staff?
Is it the number of customers?
Is it something else?
(Like location/office or press coverage etc.)
Posted by: Mike Hollatz at May 9, 2007 08:57 PM
I would say a company is a start-up until it becomes profitable.
Posted by: Casey at May 9, 2007 08:57 PM