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Comment by kevindong | Hacker News Reader

> "Startups are laying people off!"

> Examples: Publicly traded companies Uber and Lyft.

> Sorry, they're not startups.

As an aside, I don't like how the tech industry/news sites call any non-behemoth tech company a "startup".

For example, these companies are not startups; they are large (and in some cases, deeply unprofitable) enterprises: SpaceX, Stripe, Airbnb, JUUL, Palantir, Epic Games, Wish, Coinbase, Robinhood, Instacart, DoorDash, WeWork, etc. [0]

Furthermore, 89% of American businesses have fewer than 20 employees [1].

[0]: These are the largest US-based "unicorn startups" per Wikipedia: https://en.wikipedia.org/wiki/List_of_unicorn_startup_compan...

[1]: https://www2.census.gov/programs-surveys/susb/tables/2016/us...

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Startup has been consumed by its use as a marketing buzzword and as far as I can tell just means 'company' at this point. People just say they 'founded a startup' instead of 'started a company'.

I suspect most air conditioning contractors and electricians would be called 'startups' if they worked in software.

“Founded a startup” is absolutely but trivially correct because every company is a startup by any definition in the immediate aftermath of its founding. The question is just about what criteria make sense for declaring that a company has graduated from a startup to an established company.

Criteria like “founded in the last Y years”, “has fewer than N employees”, “has market cap under $X”, “is in a fresh/hot industry” alone or in combination end up including dramatically different sets of companies.

I don't agree. Startup has a fairly specific task or operating style that is irrelevant to its size and age and number of employees. A startup is a company that is experimenting with ideas and its main goal is to validate a business model. If those business models can't be validated in a certain amount of time, the company should shut down. If a business model is validated it needs to be implemented and the company is no longer a startup.

You can be a 0-day 1-person company but if you have a business model and an operating structure, you're not a startup. Most companies are started on a specific business idea and planned to run for long term on that idea. Those are not startups.

Where do you draw the line for "validating a business model"?

Uber was founded 11 years ago. How long do you need to validate the business model of a taxi app?

AirBNB was founded nearly 12 years ago. How long until they're done validating the business model of letting people rent apartments over a website?

I feel like a business model is validated when it becomes profitable, which it's why many of us don't validate the Uber/Lyft business model yet.

Okay, so it's partially computable. But non-viability can never be proven?

Startup implies tech and/or "nontraditional" business and also tends to imply VC money. A restaurant isn't a "startup" because it's a restaurant, a hardware store is a hardware store. But what is a VC backed meal kit company: a startup. There's no actual word for it so startup is the catchall term

Extremely insightful comment! I've been in the industry for a while and this is an excellent definition. It pertains to whether or not a business model is well-established or not.

> what is a VC backed meal kit company

How about a meal kit company?

Words mean what people who use them intend them to mean, so we end up with things like this:

noun

a new business venture, or a new commercial or industrial project.

adjective

of or relating to the beginning of such a venture or project, especially to an investment made to initiate it

https://www.dictionary.com/browse/startup

NB: dictionaries are not authoritative sources for living languages, rather they can only be historical records. Thus, words mean what people who use them intend them to mean.

I also think a more important qualifier is the primary focus being development of a proprietary product or service, as opposed to e.g. consulting or providing infrastructure. (Not sure exactly how to word it properly to make the distinction clear, but I think you get the gist)

In my book, a VC money is not a prerequisite for being a startup (although that tends to be how things go these days)

Plenty of startups are doing the same thing as giant companies that nobody is calling a startup. SpaceX started out building rockets just like everyone else in the industry. https://boomsupersonic.com/ designs and builds aircraft like say Boing.

Startup = new business model. However once those business models have become mature, it's no longer a startup.

Meal kits are not that revolutionary. Frozen meals have existed for decades, adding some different ingredients and shipping isn't a big innovation on it's own and is more of a standard evolution of food retail.

> I suspect most air conditioning contractors and electricians would be called 'startups' if they worked in software.

But do they provide innovative solutions and aim for growth?

Oddly, no. Most service companies are a lifestyle, not an attempt at an empire. Witness: when the owner retires, the company goes out of business. Unless a family member wants to carry on, most often they just lock the doors and walk away. Instead of trying to sell the business.

“Startup”, for me, means tech and “never consistently made a profit (yet)”. Some might add “and doesn’t really know how to get there, either (yet)”

Most air conditioning contractors and electricians are in a different category. Unless they set their tariffs wrong by an enormous amount, they are profitable almost (they may have to invest in tooling and transport) from day one.

> I don't like how the tech industry/news sites call any non-behemoth tech company a "startup".

And I don't like how they call these companies "tech" companies.

Yes, they use computers, but mostly in ways that we have been doing for decades. By that standard, every company is a tech company including farmers and banks.

If they must call them "tech", then call them "low-tech" unless they regularly and substantially publish in scientific journals.

And no, having a pet tech project like self-driving cars does not make you a tech company until it's getting close to your main source of profit.

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