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Startup = Idea

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33 pointsjusben136929 comments

A startup is whatever you think it is. There is no solid definition. I imagine most people will agree that a startup is always a newly formed business, which is probably geared to "grow" at a fast pace, and is probably not something traditional or brick and mortar.

The rest is just trying to figure out who you don't want calling themselves a startup.

(And by writing this I have joined the others in attempting to define this word.)

If I'm starting a flower business, is that a startup? No. I'm just starting a business. Selling flowers is a proven business model.

The difference between starting a business or a startup is that a startup is trying to solve a unique problem. It often tries to do this through the use of technology.

If I think I might have found the cure for cancer which could lead to a billion dollar company but I need to do 5 years of research, that's a startup! No bank is going to give me a loan for this so I need investors who believe in my vision.

Uh, no. Legally, a startup is simply any new business, whatever goals the business is trying to accomplish. The startup period is the period during which the business is setting itself up prior to begin its normal intended business operations.

The term "startup" derives from the tendency of technology based companies to remain in this "starting up" period longer than companies in most other domains. It has somehow been romanticized as a term exclusively belonging to tech.

After all, if "startup" only meant a business trying to solve a unique problem, then Twitter, Facebook, and even Google never were startups, because communication, social networking, and search were not unique problems when those companies were formed. For that matter, AirBnb and Uber would not be startups, as FRBO's and charter car services are solved problems.

"Legally, a startup is simply..."

I normally dislike "citation needed" responses, but what law are you referencing, exactly?

For the tax code laws, see §195, 248, and 709. For the state and federal laws, I suggest using Lexis to look them up as i don't have the time to provide cites.

I agree that "unique problem" probably isn't a good enough descriptor, but there's no such thing as something that's "legally" a startup or not. Now, there are regulations that define a "small business" based on number of employees or revenue, so you can say that you can be "legally" a small business. But startup is another animal. I personally prefer Steve Blank's definition.

> If I'm starting a flower business, is that a startup? No. I'm just starting a business. Selling flowers is a proven business model.

Amazon was never a startup then. Selling books is a proven business model.

Zappos was never a startup. Selling shoes is a proven business model.

Heroku is not a startup. Selling application hosting is a proven business model.

Github is not a startup. Code repositories have a long and storied history, and yes... are a proven business model.

When Amazon launched it was pretty unique. Trying to sell books in a different way.

Zappos had/has a unique customer support scheme that made/makes them very unique.

Heroku took hosting to a new level, in 2007 it was not so easy to find scalable application hosting.

Compare Github to Sourceforge. Github is pretty unique the way it adds the social element.

> The next test: If a startup = growth then by definition a new business that is not a start up cannot = growth.

I think Paul Graham meant it to be a necessary condition to be a startup, but not an exclusive one. Pretending otherwise is just a camouflaged straw man.

Start (New idea or approach) + Up (Scalable) = Startup (A scalable new idea or approach)

A new idea or approach that's not scalable would not be a startup (e.g. my uncle's underwater bar for scuba divers in Barbados). And a scalable idea or approach that's not new would not be a startup (e.g. another Coke/Pepsi clone).

After reading that I still don't know the concrete definition of Startup. Is it an idea? I have many ideas that I have jotted down over the years. Are all those Startups? Or do I need to execute? The post suggests that if someone is building something that already exists then it is not a startup. Why? Is Hipmunk a startup? There already exists many travel search engines. You might say they have a unique spin on something that exists. Your hotel idea with a treadmill in every room had that as well.

There is a legal definition: a newly formed business that has not begun its intended normal business activities. Legally, and in the tax code, a "startup" has various advantages that established businesses do not (i.e., for example, in some states a startup does not pay income taxes for its first year).

If you want to add more to the definition...that is a philosophical battle that will never be resolved decisely for any specific extended definition.

Rant/shameless plug:

The author raises a few valid points -- which I would summarize as "any short definition of a complicated thing will have at least a few minor problems" -- but overall this feels pretty unconvincing to me.

For example, I see nothing wrong with seeing a new company aimed at creating a global chain of barber shops as a startup -- yet I see plenty wrong with describing his grow-vegetables-on-the-moon company as a startup (cool space technology + no obvious business model = scientific foundation perhaps, but not even a business, let along a startup).

Which makes it frustrating to see this on the front page, because I wrote my own response to PG's essay several weeks ago, [1] which I think was better thought out and written, and it got no love on HN (though it did on Twitter).

/rant /plug

[1] https://news.ycombinator.com/item?id=4577525

I completely disagree with the theory "Startup = Idea".

My counter argument is: "Good Ideas Grow On Trees"

Working with a startup myself, I can clearly see why Paul Graham nailed it down to "growth" and not "idea".

The "idea" part of an startup is the easy one. I scientifically researched the topic 'innovation capability' and 'innovativeness' of organizations and the crucial part is not to come up with an idea. As said "good ideas grow on trees". The hard work is the execution of an startup idea to get "growth".

The main difference between startups is not their idea, but their growth. Many people can come up with a new startup idea in days, maybe even with a new idea within minutes. But it can take years to bring an idea to success.

Here are examples of good ideas that are growing on trees: http://www.quora.com/What-is-the-best-way-for-a-first-time-e...

There are endless startup ideas. Even the idea newness, how radical new a startup idea is, is not the main aspect of an startup. Again the main difference between startups is if they can execute the idea and get growth. For example with our startup we were the first to hit a large, untapped or underserved market. But the lack of execution and growth was what killed it. There are always other people who sooner or later have a similar idea. The main difference again is which startup executes the idea the best, the fastest and gets the most growth.

Is Integrity Funding a startup? Founded in 2007, it has seen 12,443% growth over the past three years and is currently the 4th fastest growing company in the US.

Website: http://www.integrityfunding.com/index.html Reference: http://www.inc.com/inc5000/profile/integrity-funding

There are a lot of companies on that list of the 5,000 fastest growing companies in the US that I (and perhaps others) wouldn't consider "startups" at first glance.

Also, in your argument you reference your "startup" but say that the company failed because of "lack of execution and growth." But wouldn't, by your own definition, your company not have been a startup because, after all, it was just another idea that fell off the idea tree and failed to grow?

Trendspotter you're mixing together a lot of thoughts into one bucket. "For example with our startup we were the first to hit a large, untapped or underserved market. But the lack of execution and growth was what killed it." So you were a startup. But you failed due to poor execution. Did poor execution make you not a startup? No, it made you a failed startup. "Again the main difference between startups is if they can execute the idea and get growth." What you're really saying here is the main difference between successful startups and failed startups. You're not defining a startup.

Good idea's don't really grow on trees or they'd be done more regularly. Again, all businesses need good execution or they'll no longer be businesses. All businesses need growth. So execution and growth aren't defining characteristics of a startup.

I do not think that this is correct. Ideas are a dime a dozen. I think that execution is the most important aspect of a startup. The idea might actually not matter all that much, indeed the underlying idea might change quite radically over the lifetime of the startup.

The problem though is that (good) execution is also critical for all businesses. We're looking for a unique characteristic to identify a startup from "normal" businesses.

The unique characteristic is the growth.

Startups (successful startups) grow much faster than "normal" businesses.

Facebook, Groupon, Instagram, Pinterest, you name it.

IMO a startup is a company trying to discover and prove a new business model or a radically altered existing business model.

Startup = a business = an organization that swaps value for money.

like the Post Office?

The book "The Lean Startup" defines what a startup is. No need for further explanations. Go and read the book if you have not. Save yourself time and money with it.

PG is at least as much of an authority on the topic of startups as Eric Ries so I think that's a bit simplistic.

I personally prefer the definition that Steve Blank offers: "a startup is an organization formed to search for a repeatable and scalable business model". This to me makes it clear where you should focus. Once you have discovered this model, your startup turns into a "regular" company and your priorities turn to operations and scaling.

Thanks for mentioning this. When I was reading this essay, my first thought was, "an essay that's seeking to define what a startup is that doesn't at least acknowledge Steve Blank's by-now-well-known definition just stumbled off the starting line."

It was really focused in on PG's essays vs all essays written around defining a startup.

There are also non-busines startups. That is why the Ries definition is the most complete. In the book he defines not-for-profit organizations as startups because they face the same challenges, and thus benefit from the Build-Measure-Learn approach. I'm not arguiing that yours is incorrect, I just reason that as defined by Ries is more complete.

Also, this is just one type of startup. Thus the inclusion of the term "Lean". Not all startups have or need to have the lean characteristics.

Startups as fast-growing companies take a very particular role in history, in economy and in a nation. This is a deep concept with a lot of ramifications and implications. Of course this is intrinsically linked to the concept of innovation and then new ideas but that sort of ideas and innovations which cause all the implication of fast-growing companies. This kind of companies are noteworthy in many scales since millennia.

For example, startups renew dying jobs, notably, at the nation scale.

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