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When Should You Stop Calling Your Startup a Startup?

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Ask any person what company comes to mind when he hears the word “startup” and chances are the names Facebook, LinkedIn and GroupOn will come to mind. These companies have grown to represent the classic “small business-to-industry giant” story in the business world. Of course, these companies are worth more than a billion US Dollars today with thousands of employees in their payroll.

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But would you believe despite their success these companies are still largely considered start ups?

If a company like Facebook which made US$2.91 Billion in the third quarter of 2014, employs over a thousand employees and is publicly-listed still defines itself as a start up, when is a start up no longer a start up?

Merriam-Webster defines a start up as a “fledgling business enterprise”. Typically a start up is a small business because it has to originate from manageable levels. As a small business, it is characterized as having a small number of employees, having tight funding and limited access to capital. Most start ups have great difficulty launching their business and endeavor to raise capital through the acquisition of business loans or availing crowd funding programs.

CEO’s have a different definition of what constitutes a start up.

According to Neil Blumenthal, CEO and Founder of Warby Parker, a company that designs eye wear; “A start up is a company working to solve a problem where the solution is not obvious and the success is not guaranteed.” From Blumenthal’s definition, he looks at start ups as companies which still have not built a niche for themselves in the market.

For Adora Cheung, CEO and co-founder of HomeJoy, a start up is “A state of mind; when people still make the decision to forego stability in exchange for the promise of tremendous growth and the excitement of making an immediate impact.” It seems Cheung believes even if a small business enterprise grows into large company status, it may consider itself a start up if it retains its entrepreneurial spirit.

The term “small business” has no proper or singular definition. In the United States, small businesses are defined by the US Small Business Association or US SBA and the definitions vary depending on scale, size and type of industry. Generally, a business in the United States is considered “small” if it employs less than 500 employees and makes less than US$ 20 Million in revenue per year. By contrast, in Australia, a business that employs less than 50 people is considered small.

So if we are to define a start up as small business, can we then categorically state it is no longer considered a start up if it scales up to more than 500 employees and generates more than US$ 20 Million in revenue per year? If there is one factor that should distinguish a start up is its ability to scale up operations.

According to Adam D’Augelli of True Ventures a San Francisco-based venture capital firm, a company should no longer be considered a start up if it achieves a product or market fit and begins to scale up. Until then the company would still be unstable; unable to fend for itself and remain entrenched in its quest to sustain operations.

Based on what we have so far a start up should no longer be considered a start up when the following conditions exist:

  1. Financial stability. A company that is able to pay off its loans or efficiently capitalize its borrowings without negatively impacting its operations and its growth programs has achieved stability and financial independence. Companies may still opt to secure funding to support its business development plans if it feels confident that on a cash-flow basis a loan is viable and manageable.
  1. Expand capacity. When the start up’s performance necessitate the need to expand capacity in order to accommodate greater productivity, it will inevitably employ more people and possibly build new facilities. Its existing structures will have to change and these include organizational hierarchies, operational workflows and other frameworks. More processes will be added to the existing structure to support activities designed for increased productivity.
  1. Ability to diversify. A company that looks for other avenues for growth wants to create new challenges for the enterprise. The company believes its original objective has been met and stabilized and wants other sources to augment its growth. When the business deviates from its primary purpose, it wants to re-start the process in other industries then it can be assumed it is no longer a start up.

A universally-acceptable definition of a start up and its conditions may never exist because business should never be static; it must be dynamic and continue to search for new growth stimuli. Then perhaps Adora Cheung is correct. A start up is just a “state of mind”. If you wake up every day relishing the challenges of facing new challenges and providing new solutions to make life better then you have every right to call your business a start up.

And the world will be a better place because of it.

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Trump Comments on Stock Market’s latest drop – says it’s ‘peanuts’

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Trump says Tuesday’s market drop is ‘peanuts’

President Donald Trump played down the stock market’s losses on Tuesday as “peanuts” when compared with the importance of striking a good deal with China and the gains since his election.

The Dow Jones Industrial Average “was about 16,000 or 15,000 and now it’s almost at 30,000,” Trump said at the NATO summit in London. “It’s going to be at 30,000.”

“If the stock market goes up or down — I don’t watch the stock market. I watch jobs. Jobs are what I watch,” he added. Today’s move is “peanuts compared to — we have picked up record numbers so that’s OK. That’s the way I feel.”

The major stock indexes slid Tuesday after Trump said he thinks it would be a good idea to delay signing a trade deal with China after the 2020 presidential election. The Dow Jones Industrial Average fell more than 450 points at its lows on Tuesday, led lower by trade-vulnerable AppleCaterpillar and 3M.

“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now, and we will see whether or not the deal is going to be right,” Trump told reporters before U.S. markets opened Tuesday. When asked if he had a deal deadline, he added: “I have no deadline, no. … In some ways, I think it is better to wait until after the election if you want to know the truth.”

Despite his assurances that he doesn’t watch the market’s daily moves, Trump often tweets within hours of when the U.S. equity market reaches an all-time high. He has tweeted the keyword “stock market” 107 times since his inauguration

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11 kids quotes we’re all feeling

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Ok so there’s always that time when you just wish so bad you could straight up say whats on your mind, but you know you really shouldn’t, so you don’t. Well leave it up to kids to say exactly what you’re feeling, no hesitation or regret. Check out these kids quotes that say everything you wish you could!

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THIS IS A WHOLE (FOOD) MOOD.

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More good reads

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Saturday savagery (submitted anonymously) #savage

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Why do kids say the darndest things? Comment with your favorite!

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How to become a better businessman in 6 steps; Priceless advice from Entrepreneurs

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Become a better businessman in 6 steps following this priceless advice from accomplished entrepreneurs.

  1. “Do something you’re very passionate about, and don’t try to chase what is the hot passion of the day.”

    Jeff Bezos accentuates having passion for what you are doing, because if you don’t love it you are much more likely to give up. It’s hard to take an idea and turn it into reality, especially by yourself or when people whom you respect tell you it can’t be done. The passion and love you give to your project will determine it’s success rate over time.

    Jeff Bezos Become a better businessman

  2. “Don’t let people who you may respect and who you believe know what they are talking about tell you that it can’t be done.”

    Pierre Omidyar continues to say that often they will tell you it can’t be done and that’s only because they don’t have the courage to try it.

    Pierre Omidyar become a better businessman

  3. “If you know exactly who you want to be, you need to spend as much time [as possible] with people that are actually that already.”


    This advice from Gary Vaynerchuk is actually priceless when it comes to success in the business world. Think as well “It’s not what you know but who you know,” and surround yourself with people you look up to. Human’s adapt to their surroundings quickly, and soon you won’t just want to be an entrepreneur, you will also know how to act like one.

    Gary Vaynerchuk

  4. “Come up with 10 new ideas every day.”


    Coming up with at least 10 new ideas every day will keep your “idea muscle” in shape, which is critical for an entrepreneur in order to keep going and stay ahead of the fast paced business world. James Altucher continues to say that once you’ve done this for about 6 months you will be an idea machine. New ideas keep passionate projects alive and ensure growth in every direction.

    Read Next: Working for yourself; Pros and Cons

    James Altucher become a better businessman

  5. Realize that, “naturally, nobody is interested in your ideas. You have to persuade them, and you have to show them that you are the one person out there that can do it.”



    Robert Greene, an American author known for his books on strategy, also says that “no one is really going to help you or give you direction.” Realizing this sooner than others will give you a head start and the ability to stop looking for recognition in others. Instead, you can focus on your passion project and make it perfect, and the world will not be able to ignore it.


    Robert Greene


    More about ‘Mastery’ by Robert Greene

  6. “Don’t think about ‘how do I get big fast.’ That will happen if you build something meaningful and important.”




    How to encourage teamwork in your organisation


    Danae Ringelmann’s advice is not something to skip. If you rush your ideas or your product you will be relying on luck more than anything to create success for you. While luck is certainly involved in alot of things, relying on it or betting on it to ‘get big fast’ doesn’t help you become a better businessman. Being proud of what you create, instilling passion into your work, and working hard will ensure success more than anything.


    danae ringelmann

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