What Exactly is a Startup?
It's time we tackle an important issue: what exactly is a startup?
The answer actually isn't so simple. As Business Insider Deputy Editor Alyson Shontell makes clear in her article, "This Is The Definitive Definition Of A Startup," people have interpreted "startup" many different ways.
TechCrunch writer Alex Whilhelm proposes what he calls the "50-100-500" rule, which helps to determine what is a startup and what isn't. But as Shontell points out, this interpretation, which states that if company has $50 million revenue run rate (forward 12 months), 100 or more employees, or is worth more than $500 million, would mean that every "mom and pop shop on your block that's been open for generations would then be considered a startup."
She then goes on to list more loose definitions of a startup, such as Warby Parker co-CEO Neil Blumenthal's interpretation, in which he says a startup is "a company working to solve a problem where the solution is not obvious and success is not guaranteed."
In the end, Shontell takes a more comprehensive approach in defining "startup," writing that it is perhaps best described as "all those [aforementioned definitions] rolled into one." Taking into account the measurable factors, such as revenue and employees, is just as important to defining "startup" as those that cannot be measured, such as how you feel about your company.
This article makes clear that there is more than one way to interpret just exactly what a startup is, and that how we define it tends to come from our own personal experiences. Some will try to label a startup in terms of revenue and employees, while others instead look to define it as a state of mind.
Here at 1789, we're partial to Silicon Valley entrepreneur and author Eric Ries' definition: "A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty."
Remember to check out the full article here.