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For every Startup raising $X million in funding there are probably a thousand solo entrepreneurs bootstrapping their way into profitability. The spotlight only

For every Startup raising $X million in funding there are probably a thousand solo entrepreneurs bootstrapping their way into profitability. The spotlight only shines on "Startup X raises millions in new round". Side projects are the new Lean startup.

edanm 8y ago
Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Startups are specifically organizations that are trying to grow very big, or that are looking to try a new business model. The reason the spotlight shines on them is because starting something new is interesting (from a "news" perspective, at least). Getting big is interesting. Starting a new restaurant - not really interesting, except for people who live in that area.
- 1ba9115454 8y ago
  This is a difficult argument to counter, the term Startup doesn't have a definitive definition that I'm aware of. So we could be arguing semantics. But fair enough, exclude the coffee shops, restaurants if you like. But you're still left with a lot of people building something they hope gets bigger. That fits your definition.
  - edanm 8y ago
    > But you're still left with a lot of people building something they hope gets bigger. That fits your definition. Like you said, this is just arguing semantics. That's why I like Steve Blank's definition, which is not about growth (see my other comment on this thread for more). I would say that "hoping it gets bigger" is not enough - every business owner hopes their business gets bigger. Most of them don't realistically hope it will become the next Amazon, nor do they strive to make that happen, and so many ideas/lessons from the startup world don't really apply to them (while others do still apply, of course).
    - 1ba9115454 8y ago
      > and so many ideas/lessons from the startup world don't really apply to them I'm interested, which wouldn't apply? I mean just a couple of examples.
      - edanm 8y ago
        Well the obvious example is anything related to VC fundraising. Almost all startups (as per Steve Blank / pg) will at some point require venture capital. Most other businesses have no way of raising venture capital, instead having to to rely on other means of fundraising, like a bank loan. Other things are more domain-specific - I know lots of lessons in my own field (professional services), some of which apply equally to startups, some of which don't at all.
- TekMol 8y ago
  By that definition many unicorns that are seen as prototypes of successful startups would never have been startups. I think you have been tricked by YC and other VCs to accept this definition of 'built from the start for hyper-growth'. That's how they get their share of young promising companies. To me and most people I know, a startup is a project or company in the growth phase.
  - v_lisivka 8y ago
    It looks like you are mismatching popular meaning of the word with it meaning in professional slang. Yes, for most people I know, a "startup" is just new word for a new company, or even new pizzeria or barbershop. For entrepreneur I know, startup is "built from the start for hyper-growth", as he explained it for me.
  - edanm 8y ago
    > By that definition many unicorns that are seen as prototypes of successful startups would never have been startups. I don't think that's true? Which unicorns are not companies that were pursuing high-growth, or that were trying to build a unique product<>business model? > I think you have been tricked by YC and other VCs to accept this definition of 'built from the start for hyper-growth'. I haven't been tricked into anything. We are commenting on an article written by Steve Blank, one of the "founders" of the lean startup movement. His definition of a startup is "a startup is an organization formed to search for a repeatable and scalable business model." [1] Of course this is all just semantics, so feel free to use the word in a different way. Where I disagree with you is this: > To me and most people I know, a startup is a project or company in the growth phase. I simply don't think that's true. I think most people would not consider e.g. a new law office to be a startup, definitely not in the context of talking about things like the "lean startup" movement. That's why I love Steve Blank's definition - I think it does what every good definition does - it gives more understanding. It helps give a simple answer to "when does a company stop being a 'startup' and become a regular company". The answer is - when it has found a scalable business model, and is now executing on that. For the record, I'm a big fan of bootstrapping, I ran a successful bootstrapped development agency in the past (which was acquired), and am now back to running a (bootstrapped) consultancy. I just don't think that people would include my company when thinking of startups - and that's fine! Entrepreneurship takes many forms. [1] https://steveblank.com/2010/01/25/whats-a-startup-first-principles/ https://steveblank.com/2010/01/25/whats-a-startup-first-prin...
- sharemywin 8y ago
  There are lots of examples of bootstrapped startups. Which are a cross between the too.
- eli 8y ago
  This is a weird argument. Lots of people raise big money to start a restaurant. And lots of people don't raise any money to start a SaaS.
  - edanm 8y ago
    Which is why raising money isn't the defining feature of a startup. And being a SaaS is likewise not a defining feature of a startup, necessarily.
  - briandear 8y ago
    It’s not the amount of money, it’s the amount of money, relative to costs. A restaurant buildout can cost $1 million pretty easily, so raising $1.5 million isn’t really “big” money in that context. But for a SaaS, $1.5 is “big” relative to the startup cost. Thus more of that $1.5 goes towards growth rather than just opening the door for business. “Big” money is relative to the costs of getting the business started.
- codingdave 8y ago
  I think it is clear that "startup" is a word defined differently by different people. Sure, there is the YC/SV/VC definition that it is about grow big and fast or fail. And maybe that is the crowd you run with, which is why you think most people define it that way. But to many other people, including most of my community, it is about starting something new, whether that is a slow bootstrap or a fast funding, and whether or not it is interesting.
- mason55 8y ago
  Pretty interesting how much argument there is against this view on HN. I guess most people coming here now are not familiar with Paul Graham's essay (maybe most HN posters don't even know who Paul Graham is any more) http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html > A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.
  - brazzy 8y ago
    Interesting how you assume that because Paul Graham wrote that, it is true, and that everyone who thinks differently must not be familiar with what he wrote because surely nobody could disagree with him!
    - v_lisivka 8y ago
      What wrong with that? Are you think that random reporter in random journal you read is way better expert on startups?
    - skrebbel 8y ago
      He's not assuming that. He's assuming a large fraction of the HN community agrees with Graham's definition. This certainly used to be the case a few years ago, hence his point.
  - icedchai 8y ago
    It's possible for a solo entrepreneur company to have significant growth.
  - dragonwriter 8y ago
    The term “startup” was in wide use long before the PG essay, and not consistently restricted to the use PG makes of it either before or after. Aside from stating what PG means when he uses the term (which is important!), that part of the essay has no real weight.
- mindcrime 8y ago
  Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Solo entrepreneurs absolutely start things besides coffee shops, restaurants, garages, etc. There is nothing inherent in the definition of "startup" that precludes solo founders. Especially when you think in terms of "you're solo until you aren't". Just like "you're bootstrapped, until you aren't". Taking on co-founders, raising external capital, etc., are all things you do when you get to the point that they are necessary.
  - edanm 8y ago
    I absolutely didn't mean to single out solo entrepreneurs here - the comment I was replying to talked about solo etnrepreneurs starting thousands of businesses, I was just making the point that most of these are not "startups" the way I think of them (as per the rest of the discussion). I may have given the mistaken impression that I was bumping on the solo founders bit, but that has nothing to do with it - I just reused the phrase.
- wpietri 8y ago
  I think you're mixing some things. To me, entrepreneurs are people starting new businesses. Some new businesses are trying out new business models or other major innovations; we call those startups. I agree that somebody making another burger joint or corner store is an entrepreneur, but is not doing a startup. But that doesn't mean that solo entrepreneurs can't do something new. It doesn't have to be big, just exploratory.
jstandard 8y ago
You may have misunderstood the article and the Lean methodology. From the article: "Still, unless your startup has access to large pools of capital or have a brand name like Katzenberg, Lean still makes sense." Side projects, solo entrepreneurship are not mutually exclusive and can actually be complementary. Lean is a methodology to validate demand for a product. Solo entrepreneurs can and do benefit greatly from employing it.
- 1ba9115454 8y ago
  My take was the article left the reading feeling most startups are raising large amounts of capital. When actually, most probaly are not. But this is almost impossible to measure as who can survey everyone with a side project.
  - dmix 8y ago
    I believe Steve is talking about traditional startups (high growth entities with full teams, capital, boards/advisors, etc). Solo entrepreneurs, side-projects, 'lifestyle businesses', ISVs, and other small businesses in tech don't really fit into that category. Although while many of them still call themselves startups (which is fine) the distinction is quite clear. Lean Startups has fundamental business advice that is good for any company. But Steve's analysis here is clearly targeted as a specific group of traditional high-growth startups which angels/VCs invest in, from which the original idea for Lean was spawned and designed for (and later found wider applications outside of startups - for better or worse).

edanm 8y ago

Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Startups are specifically organizations that are trying to grow very big, or that are looking to try a new business model. The reason the spotlight shines on them is because starting something new is interesting (from a "news" perspective, at least). Getting big is interesting. Starting a new restaurant - not really interesting, except for people who live in that area.

1ba9115454 8y ago
This is a difficult argument to counter, the term Startup doesn't have a definitive definition that I'm aware of. So we could be arguing semantics. But fair enough, exclude the coffee shops, restaurants if you like. But you're still left with a lot of people building something they hope gets bigger. That fits your definition.
- edanm 8y ago
  > But you're still left with a lot of people building something they hope gets bigger. That fits your definition. Like you said, this is just arguing semantics. That's why I like Steve Blank's definition, which is not about growth (see my other comment on this thread for more). I would say that "hoping it gets bigger" is not enough - every business owner hopes their business gets bigger. Most of them don't realistically hope it will become the next Amazon, nor do they strive to make that happen, and so many ideas/lessons from the startup world don't really apply to them (while others do still apply, of course).
  - 1ba9115454 8y ago
    > and so many ideas/lessons from the startup world don't really apply to them I'm interested, which wouldn't apply? I mean just a couple of examples.
    - edanm 8y ago
      Well the obvious example is anything related to VC fundraising. Almost all startups (as per Steve Blank / pg) will at some point require venture capital. Most other businesses have no way of raising venture capital, instead having to to rely on other means of fundraising, like a bank loan. Other things are more domain-specific - I know lots of lessons in my own field (professional services), some of which apply equally to startups, some of which don't at all.
TekMol 8y ago
By that definition many unicorns that are seen as prototypes of successful startups would never have been startups. I think you have been tricked by YC and other VCs to accept this definition of 'built from the start for hyper-growth'. That's how they get their share of young promising companies. To me and most people I know, a startup is a project or company in the growth phase.
- v_lisivka 8y ago
  It looks like you are mismatching popular meaning of the word with it meaning in professional slang. Yes, for most people I know, a "startup" is just new word for a new company, or even new pizzeria or barbershop. For entrepreneur I know, startup is "built from the start for hyper-growth", as he explained it for me.
- edanm 8y ago
  > By that definition many unicorns that are seen as prototypes of successful startups would never have been startups. I don't think that's true? Which unicorns are not companies that were pursuing high-growth, or that were trying to build a unique product<>business model? > I think you have been tricked by YC and other VCs to accept this definition of 'built from the start for hyper-growth'. I haven't been tricked into anything. We are commenting on an article written by Steve Blank, one of the "founders" of the lean startup movement. His definition of a startup is "a startup is an organization formed to search for a repeatable and scalable business model." [1] Of course this is all just semantics, so feel free to use the word in a different way. Where I disagree with you is this: > To me and most people I know, a startup is a project or company in the growth phase. I simply don't think that's true. I think most people would not consider e.g. a new law office to be a startup, definitely not in the context of talking about things like the "lean startup" movement. That's why I love Steve Blank's definition - I think it does what every good definition does - it gives more understanding. It helps give a simple answer to "when does a company stop being a 'startup' and become a regular company". The answer is - when it has found a scalable business model, and is now executing on that. For the record, I'm a big fan of bootstrapping, I ran a successful bootstrapped development agency in the past (which was acquired), and am now back to running a (bootstrapped) consultancy. I just don't think that people would include my company when thinking of startups - and that's fine! Entrepreneurship takes many forms. [1] https://steveblank.com/2010/01/25/whats-a-startup-first-principles/ https://steveblank.com/2010/01/25/whats-a-startup-first-prin...
sharemywin 8y ago
There are lots of examples of bootstrapped startups. Which are a cross between the too.
eli 8y ago
This is a weird argument. Lots of people raise big money to start a restaurant. And lots of people don't raise any money to start a SaaS.
- edanm 8y ago
  Which is why raising money isn't the defining feature of a startup. And being a SaaS is likewise not a defining feature of a startup, necessarily.
- briandear 8y ago
  It’s not the amount of money, it’s the amount of money, relative to costs. A restaurant buildout can cost $1 million pretty easily, so raising $1.5 million isn’t really “big” money in that context. But for a SaaS, $1.5 is “big” relative to the startup cost. Thus more of that $1.5 goes towards growth rather than just opening the door for business. “Big” money is relative to the costs of getting the business started.
codingdave 8y ago
I think it is clear that "startup" is a word defined differently by different people. Sure, there is the YC/SV/VC definition that it is about grow big and fast or fail. And maybe that is the crowd you run with, which is why you think most people define it that way. But to many other people, including most of my community, it is about starting something new, whether that is a slow bootstrap or a fast funding, and whether or not it is interesting.
mason55 8y ago
Pretty interesting how much argument there is against this view on HN. I guess most people coming here now are not familiar with Paul Graham's essay (maybe most HN posters don't even know who Paul Graham is any more) http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html > A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.
- brazzy 8y ago
  Interesting how you assume that because Paul Graham wrote that, it is true, and that everyone who thinks differently must not be familiar with what he wrote because surely nobody could disagree with him!
  - v_lisivka 8y ago
    What wrong with that? Are you think that random reporter in random journal you read is way better expert on startups?
  - skrebbel 8y ago
    He's not assuming that. He's assuming a large fraction of the HN community agrees with Graham's definition. This certainly used to be the case a few years ago, hence his point.
- icedchai 8y ago
  It's possible for a solo entrepreneur company to have significant growth.
- dragonwriter 8y ago
  The term “startup” was in wide use long before the PG essay, and not consistently restricted to the use PG makes of it either before or after. Aside from stating what PG means when he uses the term (which is important!), that part of the essay has no real weight.
mindcrime 8y ago
Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Solo entrepreneurs absolutely start things besides coffee shops, restaurants, garages, etc. There is nothing inherent in the definition of "startup" that precludes solo founders. Especially when you think in terms of "you're solo until you aren't". Just like "you're bootstrapped, until you aren't". Taking on co-founders, raising external capital, etc., are all things you do when you get to the point that they are necessary.
- edanm 8y ago
  I absolutely didn't mean to single out solo entrepreneurs here - the comment I was replying to talked about solo etnrepreneurs starting thousands of businesses, I was just making the point that most of these are not "startups" the way I think of them (as per the rest of the discussion). I may have given the mistaken impression that I was bumping on the solo founders bit, but that has nothing to do with it - I just reused the phrase.
wpietri 8y ago
I think you're mixing some things. To me, entrepreneurs are people starting new businesses. Some new businesses are trying out new business models or other major innovations; we call those startups. I agree that somebody making another burger joint or corner store is an entrepreneur, but is not doing a startup. But that doesn't mean that solo entrepreneurs can't do something new. It doesn't have to be big, just exploratory.

jstandard 8y ago

You may have misunderstood the article and the Lean methodology. From the article: "Still, unless your startup has access to large pools of capital or have a brand name like Katzenberg, Lean still makes sense." Side projects, solo entrepreneurship are not mutually exclusive and can actually be complementary. Lean is a methodology to validate demand for a product. Solo entrepreneurs can and do benefit greatly from employing it.

1ba9115454 8y ago
My take was the article left the reading feeling most startups are raising large amounts of capital. When actually, most probaly are not. But this is almost impossible to measure as who can survey everyone with a side project.
- dmix 8y ago
  I believe Steve is talking about traditional startups (high growth entities with full teams, capital, boards/advisors, etc). Solo entrepreneurs, side-projects, 'lifestyle businesses', ISVs, and other small businesses in tech don't really fit into that category. Although while many of them still call themselves startups (which is fine) the distinction is quite clear. Lean Startups has fundamental business advice that is good for any company. But Steve's analysis here is clearly targeted as a specific group of traditional high-growth startups which angels/VCs invest in, from which the original idea for Lean was spawned and designed for (and later found wider applications outside of startups - for better or worse).