

Ask HN: What is Not a startup? - twidlit

Is a game development shop a startup? Is a pillow store a startup? are web development firms startups too? It seems everyone is labeling themselves as one. What types of companies should or shouldn't be called a startup?
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pg
A startup is a business designed to scale dramatically. That excludes most
individual retail stores and service businesses.

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tyrelb
At startup has these characteristics (only):

1\. Is a business that makes money. 2\. See point 1. above

Everything else is considered either art (as in artist) or hobby.

Examples of non-startups:

1\. A iPhone developer with 1 app, no revenue 2\. A web development shop with
no customers - or no significant growth potential (that's a hobby). Especially
if you work for someone else. 3\. You make no money - this is a "non-profit
organization" or "charity" - or a "research institute". You often have to do
other jobs on the side to eat, live.

Example of a startup:

37 signals build software for internal purposes (eg: Basecamp). This would
initially lead you to believe this is a not a startup, but then the started
charging for it on a mass level, providing good for other people, etc. This is
a startup. Once you mature the revenue, you are no longer a startup.

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alex1
What do you mean by a "business that makes money"? A lot of startups operate
at a loss for their first year or two. I think more often than not, instead of
a _young_ startup having positive net income, they either have (a) some kind
of funding, seed, angel, or VC, or (b) they have some great revenue generation
opportunities they can take advantage of (which would also up their
valuation).

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tyrelb
Correct - losses during the startup period are good so as long as the revenue
potential down the line is there.

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alex1
I think a "startup" is an _innovative_ company that has existed for a short
period of time. If it's software, it's probably still in beta. A startup is
probably in early research and development stages. A startup is probably
looking for some outside funding and the founders have some exit strategy in
mind (Acquisition or IPO).

A pillow store is none of the above things so it's most probably not
considered a startup. A game development shop can be a startup if it meets
some or all of these things. Web development firms can be startups when they
make web applications for the public or businesses to use (like 37signals).

Just my 2 cents.

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twidlit
My definition of a startup is a company that exist in a new and fairly
volatile vertical. Startups are primarily defined by an innovative product,
service or business model with an emphasis on scalability.

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dnsworks
A start-up is any business that some douche-bag VC doesn't call a "lifestyle
business".

