“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.

Customer perspective:

  • 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.

Employee perspective:

  • 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:

[About the Author: Shashi Bhushan is the Founder & CEO of HealthMacro Technologies. He plunged into entrepreneurship to explore his dream of building something that touches people’s lives. HealthMacro were TiE’s AnthahPrerana2013 winners. He can be followed on twitter at @ShashiBhushanHR]