I'm just thinking out loud

What is a Start-up?

10 January 2010 by Oo

With 6 years behind them, $1bn in revenue, 1000 employees, 350 million users and a valuation of about $10 billion, Facebook won the best Start-ups award at the Crunchies (The Oscars for Internet Companies).

I do not know what a start-up is but I know what isn’t, Facebook.

My understanding of a start-up is exactly what is says, Starting up. i.e a company starting up. The Wikipedia entry defines  a start-up as

a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets.

In his acceptance speech at the Crunchies (see from 3:00), Zucky said “we are deeply humbled to be still recognised in the start-up community”. That says he knows him winning the award for a start-up is humorous!

Seriously, if Facebook is still a start-up company what are all the companies that have been given 20 grand just after Y combinator graduation called? Maybe we need a reminder of what a start-up is. The term had been used basically to define Internet companies created in the dot com era as they differentiated themselves from traditional companies as they required basically cranial capital to create and few employees to start out. But since Microsoft and Google were winners in the crunchies, maybe Internet Company = Start-up

Like I sad before, I do not know what an Internet start-up (based on the old definition) is, but I would propose a filter to say the ones that are not. I suggest any company that

  • has more than 50 employees OR
  • is above 3 years old OR
  • has more than one million dollars in cash or revenue

is not a start-up.

To be honest I do not think the word start-up means anything these days. Internet companies are more prevalent that brick and mortar companies so there is nothing special about them. Maybe we should just scrap the word start-up and call it what is should be, an Internet Company.

Congratulations Facebook! for being the best Internet company! You guys are the bomb!

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