I have something to confess. I live a double life.
After 30 years of business start-up and growth, sale I never refer to myself as an entrepreneur when I talk to other people.
On the other hand, the word entrepreneur is in the first sentence of my LinkedIn profile.
3 ways to tell if your company is still a startup
- That’s new.
- It’s not profitable.
- It is financed by private funds.
I’m also very careful about who my audience is when I call the company I work for a startup. But my startup that purports to provide services to other startups has one teach startup.
This term shift extends beyond entrepreneurship. Although I have a patent for my invention, I would never call myself an inventor. I’ve sprinkled my words across the pages of dozens of publishers, but I still can’t call myself a writer.
Words mean things. Labels mean more. And it’s not what labels like entrepreneur, startup, inventor, or author might suggest. A more harmful effect is when those labels prevent others from taking you seriously.
So what is the appropriate context to call your business a company or a startup? And when is the right time to put the startup label on your rearview mirror?
When does a company become a startup?
The first thing everyone must agree on is that the terms startup and company are not interchangeable. Strictly speaking, a startup represents a company.
Usually this means something new, but not necessarily. Some companies last for years, sometimes even a decade or more, before they fall into the public consciousness of the startup ecosystem.
That often means not being profitable, but almost every startup I’ve founded has been unprofitable. make a profit Within a few months, and certainly before hiring your first employee. Start-up companies that do not rely on institutional capital are always in a race against time to achieve cash flow and break-even, and successful companies quickly turn a profit.
This usually means private funding, but that definition can be too broad. His two businesses in my backyard in Raleigh-Durham— epic games and SAS software — are privately funded, but it seems silly to call these organizations startups.
Again, technically speaking, private companies can call themselves startups.you No one can stop you, whether you’re a teenager with an LLC and an idea or a 50-year-old in a law firm.
But here’s the problem. Start-ups were not actually used until the 1950s. Its usage exploded over time during the 1970s and 1980s (Apple, Microsoft, Dell). reached the peak Late 1990s to early 2000s (Google, Netflix, Facebook).
The later years are when the meaning of startup changed a bit and became a term connoting high-tech companies, at least high-growth companies, and companies that were in demand. venture funding Because it combines a high risk-reward ratio with its funds to achieve its growth.
At this point, startup became more than just a description, it became a concept and a philosophy. And that’s when the effects, good or bad, came into play.
When is a good time to become a startup?
Obviously, if your company is raising external capital from a venture; angel investoryou should call your company a startup.
Being recognized as a startup can be helpful if your company is promoting new ideas, concepts, or products to take market share from a group of established incumbents in a particular industry.
If your company is one or more people trying to launch a new type of business, then of course you can call yourself a startup.
But conceptually? Philosophically?
As recently as 10 years ago, at the end of the term’s peak usage, every company wanted to be seen as a startup – running like startup, or act like Startup or Something like that Startup.
Few actually did, but that’s neither here nor there.
Anecdotally, I’ve always found that the positive connotations associated with the startup label coincide with periods of general macroeconomic boom, particularly when money is cheap, technology is rapidly advancing, and consumer spending is booming. This is especially true when people are optimistic.
At times like these, the word startup conjures up fresh ideas that save time and money, increase convenience, and even boost motivation.
Google has put information at our fingertips. Netflix It freed us from the tyranny of cable. Facebook has connected our community and friends.
Yes, that sentence is true, but today it reads like 100 percent pure sarcasm. So what now? today?
When is being a startup a bad thing?
Let me be the first to say that being a startup is never a bad thing. But I’ll also address my opening statement and my hesitation in calling myself an inventor/author entrepreneur who builds startups.
Barf.
Therefore, I only use these labels when it makes sense. And today, in 2024, it makes less and less sense. While money is tight and consumers are drowning in inflation and technology, the economy is still said to be making exponential progress. artificial intelligencewithin a few months AI became a bad word.
Backlash is likely to occur like this.
AI startups are building Technology that will take away everyone’s jobs. Moreover, that AI technology can be built by his AI itself, reducing the need to invest in good old human ingenuity to build yesterday’s high-tech, high-growth startups. On top of that, the risk is generally off. Therefore, the funds of investors who do not invest in AI will remain on the sidelines.
What should non-AI startups do?
We call ourselves a company. When not talking directly to investors, I find that most people like me shy away from the word startup when talking about our startups. This is because, these days, its meaning tends to be more negative.
Employees don’t want to work for a low-wage startup that will bankrupt them because of their talent. Corporate customers and partners don’t want to sign a startup that could suddenly run out of runway tomorrow, leaving them and their customers in a bind. Consumers who believed in Google, her Facebook, and the promise of streaming are undoubtedly rethinking those loyalties.
But this is also not new.Anyone who survives dot bomb crush It turns out that people hated technology and startups even back then. Meanwhile, smart investors poured money into Google, Netflix, and Facebook.
When should you stop calling your company a startup?
Simply put, “until the company goes public, or the company stops raising outside funding, other than being a 50-year-old law firm, or its implications are old enough, There’s no reason to stop calling it a startup. Stop being positive.
But let’s be clear: in times like these, there’s really no reason to call your startup a startup in the first place other than to raise money.
term to start, 2024, is actually more of a concept or philosophy than a descriptor that gives any useful meaning to the company being described. Any car can become a sports car if you drive it fast enough and take corners more than necessary.
investors, partners, customers, employees, and most importantly, when the risk/reward ratio is high; Founder, that way you get a startup with honest good intentions. Call it whatever you want.
