What is a startup? Repetition - the mother of learning

This essay began to emerge in the form of a commentary on the post. Your startup is not a startup, but just a website . When the word count passed over 500, I decided that it was worthwhile to publish my thoughts as a separate habratopic.

So what is a startup ? Really there is still no common understanding, what does this word mean, which has filled the teeth with teeth, used to the place and out of place and which has already become almost abusive? My view is from a slightly different perspective. For the last 6 years I have been living in Thailand, I communicate here with Thai and English-speaking start-ups, I read mostly English-language news, blogs and books on this topic. So, in the English-language get-together, the word “startup” is not abusive, but has a very specific meaning and is used for convenience and mutual understanding of what is being said.

It doesn’t matter what you still mean by calling this or that company a startup. Startup is a specific concept that you just need to learn and realize. The definition of a startup was given more than 10 years ago by Steve Blank in his book Four Steps to the Epiphany ( 4 steps to enlightenment ). Many well-known technology visionaries, startups, VC will recommend this particular work in response to the question “Which book should all startups read?” Now, however, the new “Bible” from Steve Blanca, published this year as Startup Owner's Manual , is more relevant. , but we digress from the topic.
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So, the definition of a startup by Steve Blank, quoted in Wikipedia:
A startup is a company or a temporary organization created to find a repeatable and scalable business model. (For a repeatable and scalable business model)

As you can see, in this definition there is not a word about whether a company is a technology company or not, what is its size, how long it is on the market, how much it earns, whether it is a company at all, etc. The main point is that the startup is This is a kind of organization at the stage of finding a business model. Everything that does not fit this definition is merely a business and is unlikely to be interesting for venture capitalists or angel investors looking for risky enterprises at an early stage.

Let us consider specific examples:

• The blog with Adsense from this article is really not a startup, but a long-known business model. Roughly speaking, anyone can repeat it without reinventing the wheel.
• A cigarette stall is not a startup for the same reason - a well-known business model.
• Twitter is a startup. Suppose there are more than a thousand employees and hundreds of millions of dollars in investments, but they have not yet found a business model, experiments are still under way, and the risk is still very great.
• A copy of Groupon in Zimbabwe - a startup. Although in this case the business model is understandable, there are still a lot of unknowns with the audience, payment, delivery and other ambiguities in this particular country.
• A department inside a large company, created specifically to test this or that idea, can also be a startup. For example, the command of untimely gone into non-existence of Google Wave. They tried, tested the market, did not go - they killed a startup.
• The company that came up with an innovative way to destroy garbage is a startup, although not a technological one.
• A Vietnamese company that managed to organize taxi drivers on scooters into the network of delivery of purchases and cash on delivery — a startup, though not at all technological, but whose services are enjoyed by companies in the field of e-commerce.
• SpaceX is the company of Elon Musk, which wants to make space flights affordable, is currently a startup, despite the fact that one of the cargo missiles has already flown.

I want to draw your attention to two words in the definition of a startup - repeatability and scalability (applicable to the business model). The term “repeatability” here means not the ability to copy the business model by someone else, but the ability to make money by selling a certain service or product over and over again. If the company managed to quickly cut down some money on a government contract, this does not mean that it has found a business model. Can she repeat this success with other customers? It is doubtful.

Another example - the company launched a paid service and managed to attract 100 customers. The business model seems to be found, repeatability also exists, but is it scalable? Until the company reaches a certain level of profitability planned by herself and / or her investors, she will remain a startup. And only after the business model has been found, and its repeatability and scalability has been confirmed empirically, you can safely invest money into the company's growth, and the more, the better. But it will be another story.

Ps. The article with the heading "What is a startup?" Was already on Habré, in fact, therefore, I chose the name that was chosen. This essay in my opinion does not repeat, but complements the first post on this topic, so who wants more wisdom from Steve Blanc, please come here .