

Ask HN: What on earth does "start-up" mean these days? - chris_dcosta

I know this seems like an odd question, but once upon a time a start-up was a company with no employees, save for the founders, and practically no income, and never any outside investment.<p>Maybe I should qualify the question: once you have been running for a year with revenue surely you cannot be considered a start-up - you are a real business.<p>When I hear that "start-up X is hiring" I find myself asking "how the hell are they going to pay them?" Many of these companies haven't yet launched or have launched with unfinished propositions with no prospect of revenue. It just does not make sense.<p>Please don't come back with an answer that says "they get VC funding" because that's nonsense too. Are VCs blindly throwing money at embryonic businesses on the promise of a great two-line summary and a Launchrock page?<p>Something doesn't add up: where is the money coming from? Am I missing something that's happening in the "start-up world" or is it all just hype?
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brk
_once upon a time a start-up was a company with no employees..._

When? (serious question). I've been working in what most people would deem
"startups" of various sorts for about 17 years now. But save for one case (a
company I started) there was always "employees" and "investments". Just
curious when the time was when startup meant only founders and no investors.

Reading through your larger question, I think you are being overly strict in
your definition of "startup", especially as it has been used over the last
decade.

I've never seen a clear and concise definition pinned on the word, but it is
generally taken to mean a company where while their may be some cashflow, they
are generally not cashflow positive and the overall risk of failure is still
quite high.

~~~
chris_dcosta
I was hoping this would open a debate because from outside the US it just
seems like we're missing something especially on the money aspect.

You mentioned that you've always worked with "employees" and "investors", but
nobody that ever started a company anywhere from nothing has "investors" from
the outset. so either you can only have joined "post investment" which is not
really a start-up, or after the company's founders had already created a
viable business. Ie you were not working for a start-up.

Let me put it another way; is the US like some fantasy dreamland where money
gets given to anyone who starts a company?

In Europe, starting a "start-up" generally means you start from scratch. Sure
you' could get loans against your house, but the way the media and to a
certain extent HN portrays start-ups as being founded by teenagers and
graduates, most will not have this to offer.

That surely is the purpose of seed funding, but seed funding is not enough to
start hiring, because it will get you two months down the line at most, and it
does not make a viable business.

So again, it's just not clear what is really going on, what are start-ups and
whart are real established businesses calling themselves start-ups because its
fashionable.

~~~
brk
_Ie you were not working for a start-up._

Only by what appears to be your unique and limited definition.

I have _never_ heard of anyone that considers "taking money == no longer a
startup".

Also, it is not uncommon to startup a company with immediate investment. In
fact, some companies don't officially exist until the investment is secured
(they are an "idea" during the pitch stage, and the formal legal incorporation
paperwork is only filed after securing initial investment).

This is of course all based on common usage of the term in the US, but since
you were also referencing US companies this seems appropriate. Much like a
"boot" is a piece of footwear here and a part of an automobile there.

~~~
chris_dcosta
You seem to be confirming my point. You seem to be saying that anybody with an
idea in the US can get money invested into their business without having to do
anything other than produce a business plan, and an idea, if they search hard
enough.

Doesn't that sound rather odd? Let me tell you where I'm coming from:

I've started 8 companies in the last 25 years and not one has had external
funding. I've built them from scratch and earned every penny, but you seem to
be suggesting that money grows on trees.

I don't think this has anything to do with language differences, I think if
you've ever started a company you know what it takes, you know the risks, and
so do investors. It is not credible that the sort of sums of money that are
required to employ people run offices and pay taxes are available without a
running busines already in place.

And US or English or not, the fact remains you are no longer starting
something at that point in the life cycle of a business. The label therefore
is just that - a fashionable label, not a meaningful title.

------
JoachimSchipper
People use it to mean "a company that can grow very quickly over the coming
years". Hence some people pointing to "startups like Facebook and Twitter" but
ignoring the recently-opened restaurant.

(Is this what the word _should_ mean? Probably not, but there's no way to
change it.)

~~~
coryl
Wikipedia has an entry on the word. "These companies, generally newly created,
are in a phase of development and research for markets."

I think that best describes it. Opening a small retail business is not really
a startup because there is much more certainty in the business model and
market.

Tech startups however, have opportunities to operate in new and undeveloped
markets, and obviously technology lets you scale up extremely fast.

~~~
ahoyhere
The Wikipedia definition may be accurate. It's important to note that it _does
not say_ "undeveloped markets." You added that in your head.

"Development and research for markets" -- just markets. That means any market.

Startup is a phase, not a type of business. There's no reason _not_ to
consider a brand new restaurant a startup. Except possibly that it did its
market research before opening its doors, unlike what most people on HN call a
"startup."

------
Santas
Today, startup is everything you want that has something with
entrepreneurship.

