Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Alyssa Royse
The word “startup” is used so ubiquitously these days that it’s hard to figure out what it actually means. When I hear that someone “has a startup,” it sounds no different to me than to hear that someone “has a dog.” Or you hear people ask how “that startup is doing” as if it is a patient in a hospital. And, of course, there’s the “startup community,” which is made up, presumably, of people who have startups or work for startups, one way or another. But what is a startup? Is it a noun? Is it a verb?
I may not be able to define it, but, like art and porn, I know it when I see it. And Zillow is not a startup.
This is on my mind, of course, because we’re gearing up for the Seattle 2.0 Awards, which are by, for and about the startup community. You all – LOTS OF YOU ALL – nominated and voted for your favorite Startup All Stars. And a lot of the nominees just make me scratch my head. Like Zillow. And Redfin. And Cheezburger. I just don’t think they’re startups.
In order to seek some clarification about what a startup is, I checked with the questionable wisdom of Wikipedia and the conventional wisdom of the Seattle Tech Startups list.
The simple definition on Wikipedia is as follows:
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. The term became popular internationally during the dot-com bubble when a great number of dot-com companies were founded. A high tech startup company is a startup company specialized in a high tech industry.
Tony Wright offered this definition:
A smallish, youngish product company aiming at rapid experimentation and growth. I generally qualify descriptions so I know what game they are playing. i.e. “Venture backed startup” indicates one game, “lifestyle startup” indicates another. If you’re done experimenting and done growing (in a dramatic way), then you aren’t a startup.
The thing that both of these definitions have in common is newness: rapid growth, frequent experimentation, evolution and limited operating history. I think that a startup is not quite up and running smoothly yet. That it is working on defining it’s offering, building it’s team, getting to market and getting to the point where it no longer needs to raise money from outside sources to get itself up and running.
I think of it like the process of starting up my car. I put the key in, I turn it, I push down the gas pedal, I wait until I hear everything engage, and then the car is started. There is that “in between” period next, where I’m backing slowly down the driveway, stopping here and there to look and see if there’s oncoming traffic and it’s safe for me to get on the big road that will take me where I’m going. But once I’m on that road, I’m no longer starting up my car. I’m running my car.
I think the analogy holds pretty true to illustrate when you’re done starting up a company and when you’re running a company. The folks at Zillow, Redfin and Cheezburger are running companies now. They’re on the interstate, not in the driveway hoping the engine will engage.
That doesn’t strike me as the whole story, however, at least when we refer to the startup community here in Seattle. It seems to me that any community is fundamentally built on the idea of commonness. That the group of people who “have startups” (cute little startup puppies,) are sharing a similar set of experiences. Off the top of my head, those experiences may include things like writing a business plan, defining their market, building a go-to-market strategy, identifying strategic partners, doing the fundingpitch circuit, building your team, defining your cap table etc…
Obviously there’s wiggle room in there, but there are some things that just don’t seem to fit in. Cheezburger, for instance. (And before anyone thinks I’m picking on them, I LOVE THEM. I am sick that it wasn’t my idea, it is brilliant and successful and they have executed well at every turn. They are a fantastic example of how to run a business, stick to a brand, be true to yourself and monetize the hell out of a hungry market. Genius.)
Although there is a lot to learn from Cheezburger about RUNNING a business, I’m not sure how they fit into the shared struggle of startup experiences. I could be totally wrong, but I think that their initial success was largely luck – their continued success is brilliant business. Did they define a product and a market, think through a long range plan with exit, raise venture capital, do the pitch circuit, etc? I think it was a little more like striking gold and then knowing what to do with it. Where is the common experience that we can share, learn from, compare other startups to? I think that by the time they did all that, they were already successful by any measure. Growth, however rapid and huge, is not the same as startup.
So, I gotta go with the “not a startup,” if being a startup is based on the shared experiences of startupness. (And even if they were, they’re not now, though I know this one is going to be very debatable.)
Tony Wright, again, offers his own take on when a company is no longer a startup:
When it stops aiming at rapid growth or rapid growth is no longer practical due to company size or size of addressable market. Or maybe just when it gets big. Or maybe when it stops experimenting significantly.
I’m not sure why I feel like it matters, but I do. It’s not because I want to see anyone kicked out of some club or anything, but in a community that is so prone to comparison and judgment, I think it’s healthier – and more helpful – to compare apples to apples and oranges to oranges. That’s how we learn from and support each other.
Beyond it just not being “logical” to compare Dan & Lara McComb (who built and bootstrapped Biznik slowly, deliberately, brilliantly and quietly) with Rich Barton, it also isn’t helpful. They do not have shared experiences, shared obstacles, shared struggles. Suggesting that Dan & Lara could do what Rich did (at least with that speed) would be insulting and unreasonable. They never had the resources that Rich had, their experiences were hardly related. And more of us face Dan & Lara’s struggles than faced Rich’s.
Lastly, I have questions about the difference between someone having “a startup” vs. just starting a business? A startup, to me, implies something that needs all that care, feeding and building before it can deliver its goods or services to the world. But there are lots of businesses that one can just start, with nothing, and grow organically using their own revenue and momentum without having to meet external investor and larger market expectations.
Matt Terich had an interesting way to look at that:
One question my business partner and I have been pondering is whether we are building a startup or operating a small business. As we haven’t yet even talked about raising capital, but have built technology that has already made, albeit a small amount, some money. By thinking of ourselves as a small business, we are focusing on business development and revenue and ignoring things like courting investors, making powerpoint decks, etc, I believe this mindset has helped keep us focused.
This kind of gets me back to thinking about “a startup” as a noun and “starting up a business” as a verb.
And on this one, Bryan Starbuck has a typically magnanimous thought:
I’m fine if a new mom & pop local restaurant wants to call themselves a startup. I often say ‘Tech startup’ or ‘Internet startup’ to capture the unique aspect of having the Internet or tech be a critical part of the business model giving it leverage.
People who want to filter often care about filtering to that sub-set that match ‘tech startups.’ This helps avoid the needless stomping on egos. It would be great if people were passionate about talking about their new service provider as being a ‘Services Startup’ or a ‘Consulting startup.’
I like the spirit that both Brian and Matt bring to this. And I think they’re right. I would like to see more people start more businesses, regardless of whether those businesses are nouns or verbs.