Do I Work For A Startup?
I've noticed many 30-second elevator pitches indicateÂ a company'sÂ size and scope, such as "Expeditors International isÂ a Fortune 500 global logistics provider" or "Pelago is an early stage company building Whrrl".
When does a company go from being a startup to being "early stage", or aÂ "small business"?Â Milestones for making the jump could be:
XÂ numberÂ of employees (30? 50?)Â and/or someone dedicated to HR full time
Heavy funding, or no expectation of taking additional funding
Existed longer thanÂ X period of time (4 years?Â 7 years?)
Enough revenue to keep your business alive, or profitable (now or in the past)
Publicly traded, or are part of a merger or acquisition
Keeping the "Feel" of a Startup
I can understand the desire to identify your business as a startup,Â even when you're technically not one anymore.Â Maybe some companies call themselves startups for longer than they should because they want to project a particular company culture:
Fast moving (running 100mph every day), with a sense of racing the clock
Scrappy and frugal when it comes to spending money
Open to new ideas, new directions, and able to seize opportunity quickly
Innovative and inventive, nothing is set in stone yet, no bureaucracy
You Can'tÂ Deny Reality
So why does this matter? It matters because saying, "It's okay, we're a startup" becomes a cop-out eventually. Saying this to potential employees, investors, or customers when it isn't true comes off as disingenuous and smacks of enormous denial of reality. Denial of reality (think ostrich with its head in the sand)Â is my numberÂ one red flag when dealing with other people.Â I find the inability to seeÂ the world as it truly is, isÂ rarely a one-time error.Â Usually, it can be found to be a systemic flaw in thinking that rarely results in success.
Some companies cling to the title of startup even when they are heavily funded businesses, hiding behind the label as an excuse for not having reached profitability.Â Being a startup is like being an entrepreneur, it's a temporary state.Â You can be entrepreneurial but not an entrepreneur just as you can be scrappy and innovative without being a startup.Â In the best case scenario the entrepreneur becomes a successful businessman and the startup becomes a successful business.
Breakdown of Business Types
Startup:Â a new company, working on building proof of concept
Early Stage:Â has achieved proof of concept, working on building revenues
Business:Â a company with revenues, working on achieving profitability
Successful Business: a profitable company