Every time I see a startup advice book, article, Stanford lectures, whatever it may be - it is always shooting for becoming the next Uber or Airbnb - including this article.
[1] http://www.paulgraham.com/growth.html
"There's a distinct word, "startup," for companies designed to grow fast. If all companies were essentially similar, but some through luck or the efforts of their founders ended up growing very fast, we wouldn't need a separate word. We could just talk about super-successful companies and less successful ones. But in fact startups do have a different sort of DNA from other businesses. Google is not just a barbershop whose founders were unusually lucky and hard-working. Google was different from the beginning."
No, that's the Paul Graham definition.
In fact, the wikipedia article on startups includes the grow fast component, suggesting to me that that is the most common usage:
> "an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing a viable business model around an innovative product, service, process or a platform. A startup is usually a company designed to effectively develop and validate a scalable business model."
https://steveblank.com/2010/01/25/whats-a-startup-first-prin...
You can have a rapidly growing company with an old business model. Look at McDonald's, for example. The business model, selling hamburgers, wasn't particularly different. But they took great advantage of the rise of car culture and TV advertising. Or look at the Android phone market. Selling phones is a pretty well understood business model, but companies there have grown rapidly by continual incremental improvement.
To demonstrate that Steve Blanks definition is materially different from Paul Graham's, perhaps you could name a few successful startups which found a scalable/repeatable business model, but that were not designed to grow fast?
All successful startups grow fast, because that's how we define business success. Not all fast-growing companies are startups, though.
EDIT: Most ecommerce startups would fall into your "proven business model" category, and yet they, like McDonalds before them, do extensive experimentation to find the path to rapid growth. Which is why Steve Blank underscores that the search is never finished.
If a company was formed to search for a scalable, repeatable business model, then he's still interested in it when they have found it. Then they're in the growth stage.
But if a company was formed, as most companies are, intending to use a proven business model, then it's not in his definition of a startup. No matter how fast it grows.
This would seem to exclude virtually all delivery service, cleaning service, car service, etc. companies, which are usually considered the prototypical SV startups.
If you were to start a Postmates competitor today, though, and were just doing what they did, then it wouldn't be a startup. At $250m ARR, their business model is already proven.
That's what "a company designed to grow fast" is.
>You can have a rapidly growing company with an old business model. Look at McDonald's"
McDonalds was a startup under this definition. If Ray's original plan was to take an old business model, redesign it for cars, and scale it rapidly with TV advertising, that's a startup by Steve and Paul's definition.
No. Most startups are designed to grow fast. But many non-startups are designed to grow fast. There is overlap in the Venn diagram, but they are not the same thing.
> If Ray's original plan
If that was Kroc's plan, you'd be right. Do you have some evidence it was?
As far as I can tell, he spotted an existing restaurant that had already found product-market fit and just scaled the operation using variants on known franchising approaches. I also haven't seen any evidence that at the time he foresaw suburbanization, white flight, and the resulting increase in value of heavy branding, trends that were nascent at the time he joined McDonalds.
I'd say it was more akin to the top-growing restaurants of today, ones I point out elsewhere in this discussion. They are fast growers, but they are scaling mild variations on well-known business models.
To this day this is a major selling point. When travelling you can take your chances on a local place or go with what you know.
https://www.merriam-webster.com/dictionary/start-up
"A Fledgling Business Enterprise"
That's exactly what it means, no more, no less. Keep in mind that outside of the HN crowd absolutely nobody would know who either Steve Blank of Paul Graham are and neither of them get to redefine the English language.
Did I say that somewhere or are you just straw manning me?
My post and paulsutter's are clearly referring to the Silicon Valley idea of a startup, not the general idea. The difference is one of intent, so it is useful to distinguish between the two.
Someone who opens a diner or a watch repair shop or a Kinko's franchise with the intent of servicing their locale is certainly doing "a fledgling business enterprise" and thus may technically be doing a startup. But SV is specifically interested in greenfield endeavors that can leverage the web or other new tech to find a large customer base and rapidly scale to billion dollar+ valuations.
Given your long history on HN I know you know this so why are we bickering over semantics?
It's true that lots of people use the word startup to mean fledgling business, and that's perfectly OK and cool, but if you use the term "startup", in Silicon Valley, to refer to a lifestyle business, people will view it as self-aggrandizement or delusion.
This is also true in any venture capital context anywhere in the world.
One book that's great, regardless of what scale of company you're trying to build, is Traction by Weinberg and Mares. It talks about how to pick marketing channels for getting traction + includes an introductory section on each of two dozen popular marketing channels. Very useful if you're trying to get traction for your product and not sure where to start.
Finally, a lot of startup advice should apply to companies more broadly: focus on building something people want; it's better to have 100 customers that love you than to have 10k customers that like you; do things that don't scale at the beginning; etc.
http://www.microconf.com/ (edit: not only the conferenece itself, but I mainly refer to the available videos of pasts editions: http://www.microconf.com/starter/past-videos/ and http://www.microconf.com/growth/past-videos/)
In startup terms, there are cashflow businesses and disruptor businesses (credit to Mike Dillard).
Cashflow businesses are generally sneered at in Silicon Valley ("lifestyle businesses") but in many cases, they are a great place for entrepreneurs to start.
Cashflow businesses can provide you with a level of financial independence on your own terms. Then, if you want more, either start more cashflow businesses or then focus on your disruptor business (Silicon Valley style startup). But if you do you cashflow business first, you are far less at the mercy of fickle VCs, etc.
The other useful thing to come out of this classification is it almost certainly informs your funding strategy.
If you're building a cashflow business, don't ever raise money. If you're building a disruptor business, definitely raise money, as much of it as fast as you can. If you've done your cashflow business beforehand, you'll already be quite well off and can think much more strategically in your disruptor business.
His talk "How to unlearn your MBA" in particular was fantastic in providing a counterpoint to Silicon-valley style Startups: https://www.youtube.com/watch?v=MlhAkNWC1qo.
He directly comments on the YCombinator model at 53'57" (https://youtu.be/MlhAkNWC1qo?t=53m57s), but the whole thing is worth watching.
- http://justinvincent.com/page/960/how-to-start-a-sucessful-b...
- http://www.startupsfortherestofus.com
- https://www.indiehackers.com
- http://www.startupbook.net - Start Small, Stay Small
- https://blog.nugget.one/upstart/
This is just a quick list to get you started I'm sure there are better lists if you google.
Disclaimer: The Nugget blog and TechZing are some things that I have been involved in putting together.
Edit: On this subject, this podcast here should be essential listening for all entrepreneurs:
https://www.indiehackers.com/podcast/005-bryce-roberts-of-in...
Check out barnacl.es, an HN like site dedicated exactly that.
It is low volume, but has some good advice now and then, some of it from people already doing this stuff.
The first was to beware of survivorship bias. Some of us have had experiences that were very different from the reality that most people face.
Second, I'd absolutely not listen to anyone who suggested you start a business you're passionate about, at least not as a general rule. If you're really passionate about it, your own biases are almost certainly going to prejudice your business in harmful ways. That doesn't mean not to be passionate about it, it just means don't make your passion your business.
Third, don't do it with the goal of getting out, selling for millions of dollars, and being the next Musk. Those are unrealistic goals. Instead, do it to make enough money to comfortably provide for you and your family. That's a much more realistic goal.
I think that third one applies to your comment, which is why I mention it here.
Then again, go back to the first thing I listed. I'd not take advice from me. In my case, I saw a niche and it fit in with what my research was about. I left academia and was making a comfortable living. The offer to buy my business was unexpected and the price was surprising.
Selling had never been my goal. It was just a fluke. I wasn't passionate about what I was doing, I became passionate about doing it well. I became passionate about working with brilliant people and exceeding goals. It was traffic modeling, that's really not a subject one becomes impassioned over.
Sometimes, you just get lucky. Sometimes, you're in the right place at the right time. You can maximize your chances but, at the end of the day, it's 'good enough' to just be able to provide comfort and opportunity for you and your family.
But, then again, remember the first point.
I'd really like to hear more about this, because from what I've seen it's really important to "give a shit" about what you're working on.
Without a deep level of giving a shit you are quite likely to give up due to the waining of your interest level.
I mean, I've seen loss of interest as a major killer of side projects countless times in Nugget and also from speaking to lots of other entrepreneurs over the past 10 years.
People passionate about an idea can make great employees. Someone giving direction should be a bit more objective. If you can be both objective and impassioned, you're in a small minority. Lots of people seem to think they can, but wait until they fall head over heels in love and see how objective they really can be.
It's much different than building a small business that scales to 10 employees in the next 10 years.
The difference also starts from the foundation. For startups you are looking for Corp C. For your case you are looking for an LLC.
I mostly post links to seemingly pertinent things from HN, but the intent is along the lines of what you describe.
If that's what you're talking about, then a lot of this advice still applies. Looking at the "Pocket Guide" section, for example, I think that all still applies for a niche startup.
If, on the other hand, you're just talking about a new company, one where you're applying a well-understood business model to, say, a new location, then yes, you need different advice. But I think that advice differs a lot based on what kind of new business. The advice for a first-time Subway franchisee should be pretty different than somebody who wants to launch their own consulting company. There, it seems like people form up into specific communities around the kind of business.
Source: Bootstrapped a company to substantial profitability.
The chances of hearing some "new" advice about doing this that isn't just already out there is not terribly high.
One curious thing is it's more selfish than a startup - after all, you're doing it for you, not for the business. You want it to be sustainable, so the ugliness of competition is relevant sooner. One pg essay likens a startup to a charity, and some, like Craigslist retain some of that quality, helping a lot of people without making as much money as they could.
Note: I'm not criticizing you for wanting this. I'd like it too, I just haven't found a way of doing it that doesn't become nasty. YMMV.
Instead, they are obsessed with a definition of business success that doesn't involve ten-digit numbers.
There is one "lifestyle" business that's rampant throughout Silicon Valley, in spite of its efforts to deny it. This would be the bottom quartile of the venture business. It's all about picking up management fees, taking long weekends, and living large.
It's largely semantics as any small business should ideally be cashflow positive but I think the nuance here is one that you can build these businesses to scale, just without VC funding. The time horizon for growth is much longer as a result but definitely there.
Running a gas station is not a lifestyle business.
IIRC, Plenty of Fish never took VC money.
There are other examples out there. You have to research it if you want it, but it does happen.
* http://micheleincalifornia.blogspot.com/2014/03/i-love-lucy-...
A business is not a real person; you're not doing things "for it" anymore than I'm being charitable by gifting my car new tires.