“Only describe, don’t explain.”
― Ludwig Wittgenstein
According to Merriam-Webster, a startup is a fledgling company. According to Wikipedia, it’s a partnership or temporary organization designed to search for a repeatable and scalable business model. According to the Chicago Manual of Style, you spell start-up with a hyphen. But most people who work in the startup community omit the hyphen.
There are many experienced startup veterans who have rigid understandings of what they understand a startup to be. But there are many more who are new to the community and don’t know what to think or whether the term applies to them.
Perhaps you’ve heard the expression: “A startup is a company that either grows very quickly or fails quickly.” Venture capitalists, incubators, and accelerators like this idea. Their strategy is to recruit companies with potential for exponential growth and to profit when a few achieve it. But in so doing, many companies with modest or decent growth potential implode in trying to reach for the heavens.
Still, achieving 100-times return on capital isn’t the end goal for everyone. Other entrepreneurial leaders, such as popular writer Chris Guillebeau, who wrote the book “The $100 Startup,” teach people how to acquire personal and financial freedom by starting a business. He sidesteps most conversations about venture capital and big returns. Guillebeau calls “startups” what many in the venture capital community would call “small businesses.”
I studied linguistic philosophy in undergrad, and my educated opinion on this debate is that it doesn’t matter. It’s important to learn as much as you can and arm yourself with the information you need to succeed, not to create uniformity in a definition.
But while the question of how to define a startup may be irrelevant, the question of which type of startup you want to work with isn’t. When you ask people why they want to work for a startup, not everyone is looking for the same thing. Some want to work in an innovative environment. Some just don’t want a boss. Others are looking to make big money.
Knowing the type of startup you want to form will impact every decision you make from the partners you seek to the entity you form to the capitalization structure of the owners. That’s why it’s important to reflect on your own motivations before you begin searching for co-founders or a business strategy. Because, duh, it’s hard to get what you want unless you know where you want to go.