Startups for the 99%

I believe that a business being referred to as a "startup" should be something akin to an insult unless you're very, very early stage. It usually means you're running a business that's basically failing - no customers, no revenue, no profit. The sooner you stop being a startup and start being a business the better.

Obviously there are a few caveats to that as certain things that take more time and money than others (hardware, biotech, etc), but for most SaaS businesses (eg most startups) it's true enough.

It would be great if the author has specified what kind of advice isn't applicable to non-VC-backed companies. IMHO a part of it is still relevant even if you don't shoot for the stars. After all every business (even the "lifestyle" one) needs some good practices to (at least) stay on the market and avoid the fate of an expensive hobby. Yesterday I had a similar discussion on the workshop with a group of SMB owners/managers (mostly experienced people running the business for many yrs - up to 30, but there were also a few startups). All of them were in real need for an actual change to either grow or keep up with the evolving market. We were working on their business models and I was using well known examples of companies as illustrations. One of the guys suddenly asked "Why are we talking about such big companies? We are not them." The answer was pretty simple - if you want to learn and get inspired there's only one direction to look - up.

I wonder if part of the reason why most everyone uses the word 'startup' is because the alternatives 'small business', 'lifestyle business', or 'SaaS business' are just not sexy or cool to say.

It would be good for the overall entrepreneurial community if both were given their due attention (and the credit they deserve) but the tech media loves to drum up the hype for the former and it's hard not to be influenced by it.

I'm fairly unaffected by the hype and would like to start my own company but even I cringe at the thought of calling it a small business even if it has no chance of raising VC (and doesn't need to).

They're two different things, but often have significant overlap. Both need to get new customers, hire employees, create infrastructure, and so on.

I'll suggest "bootup" for "bootstrapped startup".

Not to mention that the term "startup" in general usage doesn't even have to mean a technology company. In general terms it could mean a small , new business with low revenue.

On HN you will often see companies with multi million $ valuations referred to as startups.

> "...how many investors can you name who don’t have an active blog?"

Six months ago? Zero. Today? Four, off hand. This blog post has some sound advice about evaluating whether your startup should seek outside funding, but it is based on the false premise that the only VC money worth taking comes from the top-tier VC firms like USV, Sequoia, etc.

There is a whole world of capital investors outside of the ones you read about in the news. Think of it as venture capital for the 99%. That doesn't mean all startups should take outside money; it only means that you shouldn't believe that just because USV wouldn't invest in your company that no one would.

This is very, very true. The waters are a bit muddy though, because a lot of those smaller 'would never take VC' startups actually transition into the VC kind of startup. This is even true for many of the big players in the tech landscape today. When they started out and before they gained their incredible traction, a lot of VCs would have laughed them out of the building.

There should still be some way to differentiate the name though. Maybe something as simple as 'VC-Startup' and 'LS-Startup' (lifestyle)?

The author's key assertion is that there should be separate terms for the different types of startups: those that fit with the venture capital model, and those that don't.

While separate terms may make the differences clearer, the same differentiation can be obtained with 2 widely used qualifiers: fundable, scalable

A fundable startup / scalable startup is a business that, if successful, has a high probability of being huge (>= $1B in market cap).

However, its questionable if the media, bloggers, etc. would start to use each term accurately.

I was thinking the same thing as the OP the other day - most of the sites I visit every day are tailored toward the 1% that gets VC and goes for the gold.

I recently registered startupsinhardmode.com and plan to blog there about the day-to-day challenges that "the 99%" go through (the DNS should propagate shortly if anyone is interested in checking it out).

The second category he defined has a pretty good name: small and medium business.

He even mentions it in passing (as "SMBs").

Here's a chestnut from over a decade ago that spells it out in black and white:

Are you Amazon or are you Ben and Jerry's?

http://www.joelonsoftware.com/articles/fog0000000056.html

Some words should be universal... like shark. But I don't think start-up falls into that category.

Startup vs. small business.

This link is relevant to the "What defines a startup?" conversation: http://michaelochurch.wordpress.com/2013/03/26/gervais-macle...