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Comment by privateersman | Hacker News Reader

A startup is a new business. It's not anything special.

It looks like you are falling for propaganda. When someone wants to purchase a car or a home, there's such a momentum behind the idea of financing that a customer who uses their own savings is viewed as odd... perhaps even a money launderer, yet it's perfectly normal.

I mention that because there's a similar momentum behind business financing. If you build software for a living, then you can build a new business with no overheads, no ties, no time limits, no favours, no budgets, no business plan and low risk. It's pure freedom to do what you want.

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> A startup is a new business. It's not anything special.

Your host, Y Combinator, strongly disagrees: http://www.paulgraham.com/growth.html

First two sentences in the linked article:

> A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup.

Of course he does.

A successful startup in the eyes of VCs grows fast. It has to, so VCs have some hope of making a non-stupid return. Which is why we get all the drama around unicorns etc etc and more etc.

Does that mean that you, as a founder, have any obligation to play that game?

No. You. Do. Not.

If you choose not to, that's very much your choice. It gives you a number of advantages, including no loss of control over direction or everyday running, a very much lower danger of being fired from your own project, and a wider choice of potential investment sources when you've been running profitably for a while. (Are VCs the only money source in town? Not even close.)

And if you have a solid business model, it significantly raises your prospects of still having a business - and a job - when the unicorn hunter scene crashes and burns around you.

Which it inevitably will - possibly quite soon.

The disadvantage? If the business is seriously viable with many real customers and profits and such, you may to have to settle for being a multimillionaire instead of a billionaire.

Tough break.

Is there any difference between a startup or a small business in your mind?

I see the two forms of business sometimes differentiated in that way.

I've always looked at it as a startup has a major focus in technology, while a small business could be any business that is, well, small.

The corner store and Snapchat are both businesses but they aren't the same. Saying this isn't the same as saying that startups are better, just that they are different.

African proverb: "If you want to go fast, go alone. If you want to go far, go together."

Startups are designed to go fast and cash out. The founders make a fortune and move on to something else, life doesn't really change for anyone else. A business with real longevity will go more slowly but everyone in the business will share in the ride.

I guess there is no right answer to a question of nomenclature, but "startup" is a useful term and probably shouldn't be applied all young businesses.

The opposite kind of small business, to me, is the "organic" company which funds growth out of earnings.

This is quite aside from our like or dislike for startups.

Actually, in this market, it's smarter to take out a home mortgage, and invest the remainder. Mortgage rates are low. If it were the opposite, and mortgage rates were high, you'd have an argument, but that hasn't been the case in decades.

It's true in this market, but not true if, for example, the stock market crashes and/or we have a deflationary depression.

Not saying that's particularly likely, but avoiding debt does remove risk in such scenarios--if you never take on debt you can never go bankrupt, even if your upside is also lower. People make different choices about how to balance risk, reduce stress, etc. It only looks irrational when one person imposes their values on the decisions of another.

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