Startup vs. Company

http://spencerfry.com/startup-vs-company

by zachwaugh • 15 years ago

98 18 15 years ago

bdlocks• 15 years ago

i agree with the semantics and that startups are taking on a broader definition than they once use to, but i think it boils down to one thing: startup vs. company = business plan vs. business model. steve blank provides a lot more detail into this comparison - http://t.co/ObGV2jf

salemh• 15 years ago

Link: http://steveblank.com/2010/01/14/a-startup-is-not-a-smaller-...

JacobAldridge• 15 years ago

One of the key frameworks I use as a business coach analyses the Stages of a business' development. Startup is the first stage in that lifecycle.

It is possible to "have been around for five years, generate millions in revenue, and have fifty employees" and still be in the startup stage, especially if your vision is to generate billions and have thousands of employees; conversely, some businesses in an Advanced Growth stage would not have those numbers (except, probably, the time in business).

To take those differences into account, our Stages framework relies on the changing feelings that occur within an organisation, rather than things like turnover and profit (which are easily compared, but not necessarily comparable). Loosely, I define a business as moving out of Startup when it begins to 'invest with confidence' rather than 'investing with hope'.

That business you have in the garage making no money? You're probably investing your time and some cash with the hope it will succeed. Google? They're investing with confidence, because they've demonstrated their business model. Twitter? Is a good question - are they feeling hopeful and frantic, or confident?

webwright2• 15 years ago

I read a great definition the other day by Steve Blank:

"a startup is a temporary organization designed to search for a repeatable and scalable business model."

source: http://steveblank.com/2011/03/18/new-rules-for-the-new-bubbl...

DrHankPym• 15 years ago

That's interesting, so by that definition is Facebook still a startup?

calpaterson• 15 years ago

Only really if you want to argue that Facebooks business model is unsustainable. They're in profit now (I think?) so I'm pretty happy to say they're no longer a startup.

webwright2• 15 years ago

I don't know. Companies like Amazon, Facebook and Google are obviously creating lots of new products/initiatives where revenue and scalability of the business model are still a big question mark. Is Facebook's core business scalable? Dunno.

Related question: Can you have a startup within a non-startup?

alabut• 15 years ago

I crashed a few lectures of his MBA class and the first one was totally devoted to this one sentence.

He didn't just throw it out there, he quizzed the students with intense questions for an hour about what they thought startups were, like they were in law school and had a prof obsessed with the Socratic Method. It was surprisingly hard to define what a startup was and dovetails with the themes floating around HN lately.

dmitri1981• 15 years ago

I've seen some of them posted on-line in the past. Do you know if Stanford still do that?

thx

ekabanov• 15 years ago

One way to define a startup is explosive growth -- more than 2x every year. If you have such growth it's not an established business with well-defined market, products and processes and you have to reinvent yourself every year. Mind you they do differentiate between early stage startups and growth stage startups.

haploid• 15 years ago

We Internet geeks are being profiled as "cool" in the mainstream press, girls are more interested in us than Wall St. people or lawyers ... What happened to the days when I got made fun of for being on a computer all day?

What? I have never seen this. This could just be a NYC/SF thing( as the author points out )but outside those zones, I can't imagine this to be even remotely true. Nerd groupies? Ha.

To quote Ballmer's character in Pirates of Silicon Valley, "..they were moaning, 'oh, computer language, Oh Fortran! OH FORTRAN, OOOHHHHH!'"

true_religion• 15 years ago

It's actually a Virginia/UK thing too. If I tell anyone that I'm a software engineer their first answer is "eh? money is good huh?" with a wink and a nudge.

As far as social cred---we don't get as much as doctors since we don't save lives, but we have at least as much as lawyers.

sabat• 15 years ago

Maybe it's a New York vs. San Francisco thing, but in New York we're building companies, not startups

It's not a Bay Area thing -- unwarranted extrapolation. :-)

The problem seems industry-wide: I hear people (from all over the place) say "hey, look at my startup!" and point to a small Django app with no business plan or even a business concept, one "founder", and no indication whether that founder intends to stick with it and develop into a company.

Projects are not startups. A startup is, as Steve Blank says, a (small) organization that intends to develop itself into a company. A Rails app is not automatically a "startup".

mmaunder• 15 years ago

The source and type of funding you get often determines what kind of creature your company is.

If you get valley funding from super angels who know the IPO market is dead and their most likely exit is strategic acquisition, then creating product, growth and becoming a credible threat or opportunity is key.

If you are self funded or raise money from your biz school professor or an angel who built a profitable business, then your focus is going to be on building what the author calls a "company".

The nature of funding in the NE vs the Valley has a huge impact on the kinds of businesses that are built there.

Outside the States the difference in approach is startling - in most countries funding is never an option. Most business is designed to provide a living wage and "failing fast" is not a mantra because it means starving quickly.

bo_Olean• 15 years ago

Project vs Startup

>>they were currently working on a half dozen startups (what I'd term "projects"; a startup needs focused development)

Apocryphon• 15 years ago

There's also a distinction between a startup company and startup culture. Google, Facebook(?), LinkedIn, Twitter, and so on have startup cultures despite no longer being startup companies.

mrschwabe• 15 years ago

Until and unless you have put your career on the line by dedicating every waking moment of the work week on a single business idea: you haven't launched a "startup".

This is my own definition. I've been following this scene for a number of years. Seen a lot of half ass efforts calling themselves startups. Look, I've had countless side projects, have started multiple companies, and have been self employed for over 5 years - but never have I launched a "startup". Because I don't take this concept lightly.

When I launch a startup - you'll know about it - and you can bet your ass it's not some part time gig. A startup is a full time commitment, no exceptions.

mikekarnj• 15 years ago

Starting a company is really easy. Building a company is really hard.

Startup vs. Company

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