What is a startup, anyway?
Welcome back to the View from the Monolith! I’ve spent the last few years siloed in a monolithic organisation, but now I am adventuring in the world of startups. In this blog, I share the learning I glean along the way.
It took me a while to realise that there was one obvious word missing from my look at the language of startups (didn’t see that? Check it out here!). It is such a fundamental word to the discussion that it went right by me. But when I stopped to think about it, the definition wasn’t clear; when it gets right down to it, what actually is a startup?
Age
To my naïve monolithic brain, I hear “startup” and I think “recent”. How recent is recent, though? Is the organisation still a startup after two years? Five? Ten? I don’t know, I guess we need to look elsewhere to build our definition.
Growth
Certainly, in the sense we use it, it is not simply any recently formed company: a newly-opened coffee shop might attract a flood of clients from startups but is not one itself. Partly this is a function of the business type, the startups we’re talking about are generally tech oriented, but there’s something else there too. It’s about an ambition for growth. Most new independent coffee shops are not launched with a view to take on Starbucks, but every startup is looking for the next big idea, has a glimmer in their eye that they may become the next unicorn.
Wait, unicorn?
Another word for our startup vocabulary, here,the unicorn is a startup that has made it truly big, becoming valued at more than $1 billion. Unlike their horned equine counter-parts, startup unicorns do exist, but they are almost as rare. Every startup aims for growth, but they won’t all become Uber or Airbnb.
The core idea
Still, in the risky world of startups, if they are going to make it big, or be considered a success at all, there needs to be one strong central idea. A problem to solve in a new way. The startup needs to look for a way to turn the solution to that problem into something which will provide consistent return on investment. A problem with a once-and-done solution is not a good basis for a startup; the core idea needs to be one that will reliably continue to generate revenue.
Embracing the possibility of failure
I mentioned this in my first View from the Monolith, but the startup philosophy is one which, while it’s not setting out to fail, is ready for failure. It treats it as part of the lifecycle. If one solution didn’t work, move on and look for the next one.
Our working definition
So, what is a startup? I think it probably means different things to different people. But here’s the definition we use at The Shortcut, as laid out by Steve Blank:
“A startup is a temporary organisation designed to search for a scalable and repeatable business model.”
That matches the conclusions we were working to quite nicely (and not accidentally!). The startup needs to be scalable, it needs to grow. The core idea must be a repeatable business model.
The word “temporary” brings us back to our age question. It doesn’t quite answer it, but the essence is there: there are no ten-year-old startups. The aim of the startup is to find that business model, and then use it to become something else.
If you want to join the search for a scalable repeatable business model, then perhaps entrepreneurship is for you. If you need help starting down that path, then the Catalyst Programme at The Shortcut might be just what you need. Come along to the information session to learn more!
