Characteristics That Make a Startup a Startup | Hacker News Reader

Characteristics That Make a Startup a Startup

startuporbust.com

9 pointsdrm2379 comments

What characteristics do startups have that small businesses lack?

There's one root difference between startups and other small businesses: startups are meant to grow very fast.

The other differences all follow from that one. Startups do technology. They're usually product companies rather than consulting companies. They have exits (either IPO or sale) and give employees options.

Just to clarify, if smugmug never planned on a sale or IPO, then it was never a startup? I may have to adjust my own thinking on what startup means.

It's not so much what they planned. More like if there's no hope of a sale or IPO, it's not a startup.

how would you categorize something like craigslist, or 37signals?

Craigslist clearly didn't intend to be huge at first (it wasn't even sure it wanted to be a web app), and Craig has made it pretty clear that he doesn't intend to IPO or sell (though a big chunk was purchased, by EBay, I think). Aside from that, it does have the profile of many startups - small, technically oriented, programmer-driven, massive growth.

37signals fits to some extent as well - bootstrapped by consulting, but product oriented, technically oriented, programmer driven, substantial growth.

Neither companies seem to want a sale or IPO - they're happy to settle into a role as profitable businesses. At that point, I suppose they are no longer startups.

While these companies are the exception, the approach they advocate does seem to be growing. So maybe you call them startups and say that there are many paths - and the IPO/sale exit is more typical.

first, what does it mean to finish building a product? --take a look at this interview i did that was in the same series of posts as the article in question: www.startuporbust.com/2007/07/dharmesh-shah/ To me finished, is the first time you "release to the unexpecting." second, would I describe a startup as dfranke did? i think he's on the right track but also have trouble with the idea of an unfinished product; a little too vague. third, is facebook a startup? i think so, although they are a pretty established company, they appear to still have a startup mentality.

just my two cents

It would be easier and more accurate simply to define a startup as a company which intends to derive its profits from a product which it has not yet finished building.

What does it mean to "finish" building a product?

FaceBook's product is on the market, and it's profitable. It's obviously not "finished", as they're adding to it daily. Most people would call FaceBook a startup.

Microsoft Windows is on the market, and it's profitable. It isn't "finished" either: just look at Vista. And certain areas of Microsoft - Silverlight, F#, LINQ - are most definitely not finished, and nobody knows if there's an eventual market for them. Yet most people would not call Microsoft a startup.

I don't call Facebook a startup. They were once, but they're an established company now. Once your first product is earning a profit (and I mean your real product, not Reddit T-shirts), you're out of the startup phase.

If foo.com causes enough people to buy foo.com t-shirts to feed you and clothe you, why not consider that "established"? Case in point: the guy who runs http://xkcd.com works on xkcd full time and is entirely supported by the stuff sold through the xkcd store.

(P.S. xkcd rocks)

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