As the entrepreneurship frenzy in the US grows it seems that more and more people are walking around talking about their “startup.” Sometimes they refer to a full time venture-backed endeavor. And sometimes it’s just a project “on the side.”
But what actually turns a group of people into a “startup”? Do we call a group of people a startup:
- when they have an idea and start to pursue it?
- when they make a commitment to one to the other to find an idea and pursue it jointly?
- when they form a company?
- when they start building something or invest capital?
We might also ask – when does a startup outgrow the definition of “startup” and become an actual “company”? Does the startup threshold have to do with:
- company size (# of employees)
- # of customers
- company maturity
- ratio of R&D to the rest of company
- brand awareness
- the type of investors who are investing (for example, private equity versus VCs)
Think of many of the hot tech companies today – Jive, Yammer, Twittter, Yume, Palantir, etc. Many have large customer bases and big staffs. Few are profitable.
What do you think? Should they be considered startups?