4 ms·

I think that's a pretty narrow definition of a startup. Also, there are plenty of businesses that start out small and then grow very large over time. Actually,

by dhh 18y ago

I think that's a pretty narrow definition of a startup. Also, there are plenty of businesses that start out small and then grow very large over time. Actually, most large businesses took a long time to get there. Say like foot locker or Zappos for a "shoe store" (both big business) and say McDonald's or Olive Garden for a restaurant. By the same measure, we're building 37signals to grow as well. Grow revenues, grow customers, grow influence. We're just not that hooked on growing head count or office space (which are often the most visible indicators of growth for a private company and thus often mistaken as the only indicators). To me a startup simply means a new business that's getting off the ground. That business may well end up big one day and it may not, which is okay too. I generally don't think that you can become a star by trying to be a star. I think you just try to be the best at what you do and if you are, hopefully the star part will take care of itself.

thaumaturgy 18y ago
pg has been specifically keeping the definition of "startup" narrow, to describe only the businesses that go through the two-guys-plus-vc-plus-sleepless-nights-equals-fast-megabucks pattern that we saw in 2000. I think that's the model he's most interested in, that he sees as the most dynamic and rewarding. Shiny. That said, the things you describe closely match what I've wanted to pursue. For me, and many others, it's the more rewarding, long-term way of doing things. Your talk at SS08 was a huge breath of fresh air. But, I don't think it's all that fair to dilute someone else's definition of a startup with your own idea of what a startup is. It might be time to come up with a different term, and let startup mean the thing that pg and the vc guys and others want it to mean.
- pg 18y ago
  pg has been specifically keeping the definition of "startup" narrow Argh. I haven't been doing anything to the definition of the word. I'm just using it as everyone does. Think about newspaper headlines, for example. Wouldn't you be surprised if a company described in a headline as a "startup" turned out to be a shoe repair shop, or Exxon?
  - tptacek 18y ago
    Would you be surprised to see Threadless described as a startup? What was American Apparel in 1997? A small business?
    - Alex3917 18y ago
      A startup exists to make extraordinary profits by arbitraging a temporary economic disequilibrium by doing more than anyone thought possible with less than anyone thought possible; the industry is irrelevant.
      - tptacek 18y ago
        I don't think that had anything whatsoever to do with my point. Is Threadless a startup?
        Alex3917 18y ago
        I was just trying to provide a heuristic to answer your question. I don't think it's black and white though. As for Threadless, I do think it's a startup because they invented a new process to fill a temporary market disequilibrium. But if another company came along and did the same thing then I'm not so sure.
  - brlewis 18y ago
    Pardon me for quibbling: it's not about potential growth, but about having an extended period of time at the beginning without significant revenue. A shoe repair shop is not a startup because its debt is expected to stop deepening as soon as the doors are open, not because of its limited growth potential. I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.
- dhh 18y ago
  I think that's a hijacking of the word that's not helpful at all. And I don't think that pg would argue that you can only call yourself a startup if you're going for VC funding and a sale or IPO. If so, there's an awful lot of tech companies that have been wrongfully labeled as startups under this narrow definition. And you'd only be able to call yourself a startup in retrospect once you saw whether you ended up being a megabucks exit. So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?
  - deleted 18y ago
    [deleted]
  - thaumaturgy 18y ago
    No, he might not, but getting funding of some kind is a pretty large part of the kinds of startups that they /are/ talking about, because it makes it easier to develop that massive, rapid growth that gets people's attention. Likewise, a sale or IPO aren't the only ways to derive value out of the startup, but they're the ones that get the most focus, because they're the fastest way to get the desired results (lots of money). I think that this point of view was pretty clear in several of the talks at SS08. Do I necessarily think that that's the only kind of "startup" that exists? No, not at all. (And I'm probably gonna get busted at some point for putting words in pg's mouth.) But, in a nutshell, no, they're not talking about the same kind of businesses you are. Others have already made this point for me (http://www.gaborcselle.com/blog/2008/04/startup-school-surfing-wave.html http://www.gaborcselle.com/blog/2008/04/startup-school-surfi...). So, coming back and saying, "No, we're talking about two different approaches to the same thing!" ... well, that's not helpful. Again, my only point is that they're talking about a very specific sort of model when they use the word "startup". If you think your model is the same thing, I wonder how you'd distinguish between a startup and a "software business", or "web venture", or whatever. (And, I think this point is getting made by other elsewhere, not just in this thread but outside of news.yc.)
    - tptacek 18y ago
      According to Graham, "getting funded" isn't even a part of the plan for most YC startups.
- Xichekolas 18y ago
  Am I the only one that thinks 'startup' simply means a new business without profits? This just seems like a silly semantic debate. 37signals was a startup once, it just happened to choose a different outcome. Every startup should be free to choose their outcome, and if most choose to try and quickly flip, then more power to them. If they choose to try and build a profitable independent business, great! There is no need to turn the 'liquidity event' vs 'sustainable business' camps into warring factions, like some weird language flame war. It was refreshing at SUS to see a contrasting opinion, but neither side is trying to argue that their way is the only way. Both ways obviously work, and I think anyone would be happy with either of them over not succeeding at all.
pg 18y ago
I think that's a pretty narrow definition of a startup. Maybe, but I didn't invent it. It's just the definition in current use. As most people use the word, it's more specific than a business that's merely new. As most people use the word, it doesn't include barber shops, gas stations, shoe repair stores, etc. There are structural differences between that kind of company and a startup. McDonald's and Olive Garden aren't restaurants, but restaurant chains. They do things very differently from your local Italian restaurant.
- dhh 18y ago
  Most restaurant chains didn't start as chains, they started just as that single restaurant. Most big businesses didn't start big, they started small. But that's again off topic. I do agree that the startup term is most frequently associated with technology companies, but you do hear about startups within a fair number of other lines of business too.
  - pg 18y ago
    Actually most chains are started as chains. Bizarrely enough I happen to know a lot about this, because the only reading material at the Chinese restaurant near my house in Cambridge is restaurant industry trade mags. Sometimes the chain guys will take a restaurant that's successful and turn it into a chain, but when they do this they usually keep nothing more than the name and a few recipes. McDonald's was a burger place started by the McDonald brothers, but it only became the McDonald's we know after Ray Kroc bought it and transformed it into a chain. I agree that startups don't have to be doing technology. I don't remember saying otherwise.
    - aswanson 18y ago
      What then, qualifies as a startup per your definition, even in the technology space? You could say that Apple, Microsoft, and Yahoo started off along the local restaurant model, selling (or providing services to) a small group of local hobbyists and expanding naturally as new opportunities presented themselves. [EDIT: In each of these businesses (except yahoo, maybe) the goal was to grow a business. I don't even know if MSFT ever took VC. They just sold product until the IPO. I doubt they saw VC or a public exit as an upfront goal. They just ran the business to the point where it was a natural progression.

by dhh 18y ago

thaumaturgy 18y ago

pg has been specifically keeping the definition of "startup" narrow, to describe only the businesses that go through the two-guys-plus-vc-plus-sleepless-nights-equals-fast-megabucks pattern that we saw in 2000. I think that's the model he's most interested in, that he sees as the most dynamic and rewarding. Shiny. That said, the things you describe closely match what I've wanted to pursue. For me, and many others, it's the more rewarding, long-term way of doing things. Your talk at SS08 was a huge breath of fresh air. But, I don't think it's all that fair to dilute someone else's definition of a startup with your own idea of what a startup is. It might be time to come up with a different term, and let startup mean the thing that pg and the vc guys and others want it to mean.

pg 18y ago
pg has been specifically keeping the definition of "startup" narrow Argh. I haven't been doing anything to the definition of the word. I'm just using it as everyone does. Think about newspaper headlines, for example. Wouldn't you be surprised if a company described in a headline as a "startup" turned out to be a shoe repair shop, or Exxon?
- tptacek 18y ago
  Would you be surprised to see Threadless described as a startup? What was American Apparel in 1997? A small business?
  - Alex3917 18y ago
    A startup exists to make extraordinary profits by arbitraging a temporary economic disequilibrium by doing more than anyone thought possible with less than anyone thought possible; the industry is irrelevant.
    - tptacek 18y ago
      I don't think that had anything whatsoever to do with my point. Is Threadless a startup?
      - Alex3917 18y ago
        I was just trying to provide a heuristic to answer your question. I don't think it's black and white though. As for Threadless, I do think it's a startup because they invented a new process to fill a temporary market disequilibrium. But if another company came along and did the same thing then I'm not so sure.
- brlewis 18y ago
  Pardon me for quibbling: it's not about potential growth, but about having an extended period of time at the beginning without significant revenue. A shoe repair shop is not a startup because its debt is expected to stop deepening as soon as the doors are open, not because of its limited growth potential. I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.
dhh 18y ago
I think that's a hijacking of the word that's not helpful at all. And I don't think that pg would argue that you can only call yourself a startup if you're going for VC funding and a sale or IPO. If so, there's an awful lot of tech companies that have been wrongfully labeled as startups under this narrow definition. And you'd only be able to call yourself a startup in retrospect once you saw whether you ended up being a megabucks exit. So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?
- deleted 18y ago
  [deleted]
- thaumaturgy 18y ago
  No, he might not, but getting funding of some kind is a pretty large part of the kinds of startups that they /are/ talking about, because it makes it easier to develop that massive, rapid growth that gets people's attention. Likewise, a sale or IPO aren't the only ways to derive value out of the startup, but they're the ones that get the most focus, because they're the fastest way to get the desired results (lots of money). I think that this point of view was pretty clear in several of the talks at SS08. Do I necessarily think that that's the only kind of "startup" that exists? No, not at all. (And I'm probably gonna get busted at some point for putting words in pg's mouth.) But, in a nutshell, no, they're not talking about the same kind of businesses you are. Others have already made this point for me (http://www.gaborcselle.com/blog/2008/04/startup-school-surfing-wave.html http://www.gaborcselle.com/blog/2008/04/startup-school-surfi...). So, coming back and saying, "No, we're talking about two different approaches to the same thing!" ... well, that's not helpful. Again, my only point is that they're talking about a very specific sort of model when they use the word "startup". If you think your model is the same thing, I wonder how you'd distinguish between a startup and a "software business", or "web venture", or whatever. (And, I think this point is getting made by other elsewhere, not just in this thread but outside of news.yc.)
  - tptacek 18y ago
    According to Graham, "getting funded" isn't even a part of the plan for most YC startups.
Xichekolas 18y ago
Am I the only one that thinks 'startup' simply means a new business without profits? This just seems like a silly semantic debate. 37signals was a startup once, it just happened to choose a different outcome. Every startup should be free to choose their outcome, and if most choose to try and quickly flip, then more power to them. If they choose to try and build a profitable independent business, great! There is no need to turn the 'liquidity event' vs 'sustainable business' camps into warring factions, like some weird language flame war. It was refreshing at SUS to see a contrasting opinion, but neither side is trying to argue that their way is the only way. Both ways obviously work, and I think anyone would be happy with either of them over not succeeding at all.

pg 18y ago

I think that's a pretty narrow definition of a startup. Maybe, but I didn't invent it. It's just the definition in current use. As most people use the word, it's more specific than a business that's merely new. As most people use the word, it doesn't include barber shops, gas stations, shoe repair stores, etc. There are structural differences between that kind of company and a startup. McDonald's and Olive Garden aren't restaurants, but restaurant chains. They do things very differently from your local Italian restaurant.

dhh 18y ago
Most restaurant chains didn't start as chains, they started just as that single restaurant. Most big businesses didn't start big, they started small. But that's again off topic. I do agree that the startup term is most frequently associated with technology companies, but you do hear about startups within a fair number of other lines of business too.
- pg 18y ago
  Actually most chains are started as chains. Bizarrely enough I happen to know a lot about this, because the only reading material at the Chinese restaurant near my house in Cambridge is restaurant industry trade mags. Sometimes the chain guys will take a restaurant that's successful and turn it into a chain, but when they do this they usually keep nothing more than the name and a few recipes. McDonald's was a burger place started by the McDonald brothers, but it only became the McDonald's we know after Ray Kroc bought it and transformed it into a chain. I agree that startups don't have to be doing technology. I don't remember saying otherwise.
  - aswanson 18y ago
    What then, qualifies as a startup per your definition, even in the technology space? You could say that Apple, Microsoft, and Yahoo started off along the local restaurant model, selling (or providing services to) a small group of local hobbyists and expanding naturally as new opportunities presented themselves. [EDIT: In each of these businesses (except yahoo, maybe) the goal was to grow a business. I don't even know if MSFT ever took VC. They just sold product until the IPO. I doubt they saw VC or a public exit as an upfront goal. They just ran the business to the point where it was a natural progression.