“We are not a Startup…”
The other day at an event a gentleman asked, “What does your startup do?” “We are not a startup anymore. We are a 4+ year old company, focused on healthcare software,” I quipped back, as we exchanged our visiting cards. That took him by surprise, as he was wondering why I am steering away from the word “Startup”, when it’s considered so cool to call yourself one.
The definition of a startup, as per Steve Blank — who is considered the pioneer of Customer Development methodology, a bible for startups — is “A startup is a temporary organization in search of a scalable, repeatable and profitable business model”. It is conducting experiments to get this right very fast.
So once you get it, you should not call yourself a startup anymore.
A human being runs through various phases of his/her life with different labels — a new born, a baby, toddler, boy, teenager, adult, senior citizen — You wouldn’t call yourself a baby when you are a 4–5 years old.
So I have sometimes wondered why this affinity amongst entrepreneurs to call themselves a startup for as long as possible. Some of them have products, business models and raised massive funding — but still tag themselves as startups.
Is it because:
- The word denotes that we are attempting to do something that no one has done before & it’s considered cool to run a startup or join a startup.
- The word conjures up entrepreneurship. Messages like “Startup.. It’s never too late” may make you feel that you are missing something in life if you haven’t “done” a startup.
In my view, the word startup sends a lot of uncomfortable messages subtly to various stakeholders.
- Hmm..so you are new. It means your products are untested…
- You are a young company and not seen the challenges yet. We do not know if you will be around long enough if we buy your products/services.
- I have heard that startup X folded up last month. Is my startup too similar? I am not sure.
- Will I have a long term career? What if our investors pull out?
Coming back to our story, we took a call not to call ourselves a startup when HealthMacro turned 3 in October 2015. When you are a 1–2 year old, it’s acceptable to call yourself a startup.
“We had a market fit product, a relatively large addressable market, paying customers and a business model. We only needed to scale”. So why call yourself a startup was the thought process we had.
We believed that if we called ourselves a startup even after 3 years of existence, we may end up doing silly things to fit into the mould of what a startup should do that could seriously jeopardize our growth.
I put together a comparative list of what a Startup Vs a Growth Stage company does: