February 16, 2018 Startups – when do they stop?!

By Tali Samoylenko

Man wearing a watch typing on a laptop

Synonymous with beanbags, Silicon Valley and chino-wearing hipster/developer types, the title ‘startup’ is an abused one. How can a single word be used to describe a mega-giant like Uber as well as a small, family-owned business? No wonder we’re all confused! So what actually IS a start-up – and when does a business grow out of being one?

Adora Cheung, cofounder of Homejoy, says it’s a “state of mind”, but that was a little vague for us. Neil Blumenthal’s (cofounder and co-CEO of Warby Parker) definition is more specific, describing a startup is “a company working to solve a problem where the solution is not obvious and success is not guaranteed.”

Here at Avion Communications, we recently discussed this concept and even extended the conversation to some of our clients to see what they thought. In this article, we dig into things a little deeper.

Does startup describe the age of a business, or its mission?

So, is a startup a special club we get to be a part of once we’ve launched a shiny, new business? Not really… According to Tony Hsieh, founder of Zappos, you’ve got to “chase the vision, not the money”, which means actually having a unique concept in the first place. Notice the italics? Very deliberate. Ask yourself whether what you’re offering is different from what’s been done before. Then you just might have an MVP (minimum viable product) to explore.

Basically, it all depends on the mentality of your business – how you perceive your potential growth and how mind-blowingly useful the need you’re filling is. Recently, the word ‘startup’ has been used as a buzzword to describe, well, anything that’s just starting up, without considering the potential size of your market and the scalability of your product. To put this into context, Bill’s Plumbing* will probably have less of a chance of tapping into (gold star if you caught that pun) a potentially lucrative market than a tech company looking to test, validate and launch a product that makes life easier for a particular group of people. Why? Because:

  • Bill’s market is available and predictable – the need for plumbers like Bill has existed for a considerable period
  • Bill’s not introducing new concepts to the market – he will operate like a regular plumber
  • Bill’s risk is low because demand is decent – it’s a pretty safe bet that Bill’s ground-breaking idea to become a plumber will be understood and well-received by his market.

On the other hand, Bill’s competitor, Bob* is disrupting the industry by introducing a revolutionary plumbing app. He’s created a platform that allows you to link with a plumber, anywhere in Australia, at any time. His business is a startup because:

  • Bob’s market is undefined – Bob’s needs to figure out whether there is a group of people who will actually find use in his app
  • Bob’s introducing a new concept to the market – never before have people been able to access plumbing services like this
  • Bob’s risk is high because demand is unclear – Bob’s not sure how people will react to his idea and needs to test viability.

How big is too big?

Picture this: You’ve built an innovative business off the back of countless late nights, blood, sweat and tears. We’re proud of you – look at those investors and all of those hard-working staff members buzzing about and playing ping-pong! Your startup killed it!

Wait.

Are you still even a startup? Did you just outgrow the hoodie that you’ve been wearing since you first came up with your MVP? Fortune.com says that once you hit 30 staff members, you’ve got to retire startup status but there are other indicators too:

  • Your market is now well established
  • You have no problem paying yourself or your staff
  • Your risks are significantly lower than when you first started.

In essence, a startup is a business that solves a specific problem while growing at a rapid rate. Using lean principles and agile concepts, they test, validate and launch an original idea that makes a difference to a niche market – or the world if you’re the next Mark Zuckerburg or Elon Musk. Failure is an (encouraged) option, and learning from your mistakes is actually cool.

But, it’s not all sticky notes and flashy tech. A startup is about working hard to achieve something big with sparse resourcing. It’s tough and there’s no guarantee of success. Nowadays, books, blogs and podcast about how to be a successful startup are abundant too, which means more startups and more competition.

Here at Avion, we’re no startup, but we do try to operate like one. We use a heap of startup principles to make our operations as lean and effective as possible, moving quickly while kicking goals. For agile copywriters with a true understanding of the digital landscape, give us a call – we’ve worked with corporate and startup clients to create compelling, snazzy copy.

*Not a real thing – sorry to Bill or Bob the plumbers if they exist!