What is a startup company? According to Steve Blanks, the silicon valley wizard, “a temporary organization designed to search for a repeatable and scalable business model.” A startup is the embodiment of a founder’s dream, says Will Schroter. “It represents the journey from concept to reality. It is one of the few times when you can take something that is only a dream and make it a reality, not just for yourself, but for the entire world.”
In simpler terms, it is the stage of business where an idea is being objectified into an organization.
Everything you Want to Know About Startup Company
Let us try and simplify the first definition part by part.
- A startup is a temporary organization, meaning, the ultimate aim is to become a company. From being a temporary organization, the startup becomes a permanent one. The goal to reach the stage where your startup will become a company.
- Then it comes with the next question, what is the startup supposed to be doing? This is easy to answer. A startup is your idea being objectified. The idea is being brought to life. While doing that you need a business model for your concept that is repeatable.
- What does repeatable mean? The idea should work on all days of the week and on all processes of the to be a company. The concept should work every Monday of every month and for your marketing team as well as the editing team.
- Lastly, you want your temporary organization to become a permanent one. Hence, you need to ensure that your business model is scalable. If you invest five rupees in it, you should be getting seven rupees in return. Otherwise, the startup will become an out of business startup.
Having said the above, let us categorize the types of startup companies. Which startup does your startup company fall under? The model, here is by Steve Blanks.
Lifestyle Startup Companies
These entrepreneurs are self-employed. They work for themselves. They are usually refer to as freelancers. The drive to work is not to earn a profit, but they are driven by passion. It could be seen as the perfect job as you work for no one. You are your boss, and the driving factor is passion. So you know you will not be forcing yourself out of bed every morning.
Small Business Startup Companies
The driving factor here is to feed the family. The need to go and work every day to earn a daily income is the motive behind these entrepreneurs. These individuals again work for themselves by owning and running a small business. For example, grocery stores, hairdressers, bakers, carpenters, electricians, and even travel agents. The essential distinguishing point is that these businesses are not design to scale. They are not founded to expand into a more prominent organization.
Scaleable Startup Companies
These startup companies has envision to become world engulfing companies. They are a buy to life with an aim to grow bigger. Google, facebook, twitter and uber are classic examples of such startup companies. These startup companies dream big and even begin big. They hire the best employees, they start with big business models, and capital investments are comparatively larger. The aim is to expand the worth of the company to twice or thrice of the capital investments in short periods.
Buyable Startup Companies
Such startup companies are born to sale and buy, depending on your perspective. The aim is to become a small startup company that a bigger company can buy.
The startup company is establishes not to become a billion-dollar company but to be purchase by one. For the organizations, it is like merging into a bigger stream of water.
Large Company Startups
Large startup companies are time-bound. They have a limited period to keep adapting to consumer needs, or those will replace them are. The investment involved is often significant. So the amount at risk is enormous. The company is often at crossroads where either it is continually adapting or it dies.
Social Startup Companies
Social startup companies are born with a mission to bring change. They are driven by the idea to leave an impact or to make a difference. These startup companies often have a motto or a slogan that it lives by. The ideology is not to make the world a wealthier place but a better one. But it is important to remember here that if the startup does not earn enough to stand on its feet, the idea of change dies along with the company.
Now that we have defined which category your startup falls under, let us take a look at when a Startup Company stops being a startup? When does a startup company become a permanent organization, a company?
Adam D’ Augelli, an associate at San Francisco based venture capital firm True Ventures, will tell you that, “a company is a startup until it finds product/market fit and begin to scale.”
This employs that your startup company has begun taking its initial steps towards some sort of expansion. This could be in the form of profits, employment, the net worth of the business, etc. While this is a vague category, here are some markers to see if your startup is on its way to losing the status of a startup company and becoming a company.
Buying other Startup Companies
Is your company listening to startup companies pitch their ideas to you? Are you as a company interested and capable of purchasing startups companies? Do you see younger versions of yourselves delivering and pitching plans to you? If yes, then your startup company is about to lose its status as a startup company.
Becoming an Investor
If you as the founder of a startup company are now having interest in investing in other companies, you are climbing higher on the ladder. If your startup is capable of resting on its own feet so that you can start looking into profit-making options such as investing, you are about to become a company.
Surpassing the High-Risk Stage
Try to remember at the beginning where every step was a risk? If that risk has reduces where you are not worrying about losing the startup company, then you are stepping closer to becoming a company. If the high risk has remarkably reduced, then your startup company has done its job well.
More than Thirty Employees
Very put, if your startup company is a family to thirty or more than thirty members, then it will be a company.
The Brand Speaks for Itself
This should be the most important demarketing factor in your startups company’s. If the brand of your startup company has started talking for its self, the company is a success.
These are some important facts and tips you need to know before and for your startup company. This is a guide to understand what a startup company is, which category it belongs to and when it will cease to be one. Here’s to hoping that your startup company takes leaps on the success chart. Do not forget to leave us a thank you note form top of the success ladder!