Hacker News Reader

Comment by wpietri | Hacker News Reader

That is definitely not Steve Blank's definition. His is: "an organization formed to search for a repeatable and scalable business model."

You can have a rapidly growing company with an old business model. Look at McDonald's, for example. The business model, selling hamburgers, wasn't particularly different. But they took great advantage of the rise of car culture and TV advertising. Or look at the Android phone market. Selling phones is a pretty well understood business model, but companies there have grown rapidly by continual incremental improvement.

View on HN

Repeatable and scalable sound like ingredients for fast growth.

To demonstrate that Steve Blanks definition is materially different from Paul Graham's, perhaps you could name a few successful startups which found a scalable/repeatable business model, but that were not designed to grow fast?

Seriously? I already demonstrated that it was materially different by showing that some-fast growing companies were not formed to search for business models.

All successful startups grow fast, because that's how we define business success. Not all fast-growing companies are startups, though.

Ok great, Steve Blank excludes companies that already have a scalable repeatable model? Somehow I doubt that's his intention

EDIT: Most ecommerce startups would fall into your "proven business model" category, and yet they, like McDonalds before them, do extensive experimentation to find the path to rapid growth. Which is why Steve Blank underscores that the search is never finished.

Not quite. His definition is about what the organization was formed to do.

If a company was formed to search for a scalable, repeatable business model, then he's still interested in it when they have found it. Then they're in the growth stage.

But if a company was formed, as most companies are, intending to use a proven business model, then it's not in his definition of a startup. No matter how fast it grows.

> But if a company was formed, as most companies are, intending to use a proven business model, then it's not in his definition of a startup.

This would seem to exclude virtually all delivery service, cleaning service, car service, etc. companies, which are usually considered the prototypical SV startups.

It depends on how they're doing it. Uber and Lyft, for example, are definitely startups under Blank's definition, because they were searching for a new model. Postmates too was new; I don't believe there was a successful delivery company that worked like they do.

If you were to start a Postmates competitor today, though, and were just doing what they did, then it wouldn't be a startup. At $250m ARR, their business model is already proven.

>That is definitely not Steve Blank's definition. His is: "an organization formed to search for a repeatable and scalable business model."

That's what "a company designed to grow fast" is.

>You can have a rapidly growing company with an old business model. Look at McDonald's"

McDonalds was a startup under this definition. If Ray's original plan was to take an old business model, redesign it for cars, and scale it rapidly with TV advertising, that's a startup by Steve and Paul's definition.

> That's what "a company designed to grow fast" is.

No. Most startups are designed to grow fast. But many non-startups are designed to grow fast. There is overlap in the Venn diagram, but they are not the same thing.

> If Ray's original plan

If that was Kroc's plan, you'd be right. Do you have some evidence it was?

As far as I can tell, he spotted an existing restaurant that had already found product-market fit and just scaled the operation using variants on known franchising approaches. I also haven't seen any evidence that at the time he foresaw suburbanization, white flight, and the resulting increase in value of heavy branding, trends that were nascent at the time he joined McDonalds.

I'd say it was more akin to the top-growing restaurants of today, ones I point out elsewhere in this discussion. They are fast growers, but they are scaling mild variations on well-known business models.

His insight was that the model was repeatable and scalable. The assembly line kitchen they developed not only made making burgers fast but also made them incredibly consistent. Because of this he could franchise the restaurants and be assured that quality would be consistent among them despite being operated by different people. He never intended to open large numbers of his own restaurants - just enough for experimentation purposes.

To this day this is a major selling point. When travelling you can take your chances on a local place or go with what you know.

Sure. I think we're saying the same thing: The McDonald brothers had found product-market fit. Kroc scaled it. Ergo, Kroc's approach was not what Blank calls a startup.

Reply on news.ycombinator.com