He searched for a repeatable and scalable business model. He found it. He scaled. He delivered excellent ROI to his investors. That's a startup.
People who think it's not real if it doesn't involve angels and VCs and TechCrunch write-ups and whatnot are fashion victims. Pity them.
Below you will find a comment by the OP that suggests he is going to really scale the business by expanding the offering and focusing on it. Probably using the revenue he is generating. Which is awesome — no need for VCs for his business as it was profitable from day 2. For this next tier of growth though, it probably will be a startup, one where he isn't sure whether the investment will pay off or not. If you ask me, that is the essence. Once you've figured that out, it isn't really a startup anymore.
In the end we had all partners (3 of us), and a full time employee -- so it was fairly big I'd say (all with profitability, etc. from day one).
Along the way we could have definitely hired more engineers and grown the team, but we decided to treat it as a passive business after we got some big successes and didn't think hiring / etc. would be necessary (at least for a while).
If I could go back in time and re-do that, I think the company would be much larger now (and more successful) had we scaled our engineering team early on with the money we got, and tried to shoot for quicker growth.
It seems scalable and repeatable enough as it is, to the point where I'm not sure what VC money and an enterprise sales team would add.