When does a "start-up" lose its label?

This blog post is all about: Google's 20th birthday, that missionaries do not have to be founders, how does start-up compare to the plane, what does Jack Ma say about...

19 days ago

Latest Post Mixing warsaw.ex by Sebastian Gebski
This blog post is all about: Google's 20th birthday, that missionaries do not have to be founders, how does start-up compare to the plane, what does Jack Ma say about the day after tomorrow, what happens when survival is not the only focus anymore ...

Google has just turned 20. Amazing, isn't it? At the moment of writing these words: Facebook is 14, Uber is 9, Instagram is 8. Eight or nine years is already quite a long period of time, isn't it? Yet, these companies are notoriously categorised as ... "start-ups". They are worth billions (or multitudes of billions ...), rock-solid, they employ thousands or even tens of thousands of people - yet, they are still (not by all, but by many) considered start-ups.

So maybe it's a good question to ask:

"When does a start-up stop being a start-up?"

Let's try some hypotheses ...

Start-up == own business (?)

But what if ... what is & what isn't a start-up are not separated by the moment in time?

I think we all agree that start-up is all about entrepreneurship - so what if a company is a start-up only for its founders and those who've joined later, but have a meaningful (when compared to their salaries) share pool?

Such people have far more "skin in the game", they risk more, their stakes are higher - what means that they have a lot more to both win & lose. They are the ones who've come up with the idea for business, organised the initial pool of funding (risking either their own money, future credit rating, ownership of their houses or at least their reputation ...) & started putting the first bricks in the wall.

They are the ones who'll strive 10x more than others to make the whole thing succeed. Because they know that if it truly takes off, it will be them drinking the champagne. Because for them it's personal. Maybe they are "the start-up" & everyone else are ... just employees.

Mmm, nah.

Entrepreneurship is much more wider than that. And you don't have be an owner of a business to get emotionally engaged on par with someone with lion's share. Even employees can be "missionaries", not only "mercenaries".

Until the last fuel vapors ...

Awesome, but it seems we're not getting any closer to answering the initial question ...

Well, let me provide you my definition then:

Start-up is a bunch of people trying to build up a solid-enough foundation for a future company. They have ideas, creative potential, certain skills & spare time, probably some money (e.g. savings, to secure the living) & now they have full focus ONLY on start-up's survival.

What does it mean in practice?

  1. Work in start-ups indeed doesn't bother with such "details" like work-life balance
  2. If you compare start-up to a plane, it's just an engine, small fuel tank + maybe a tiny piece of windshield & half of a wing :) Everything & everyone that is not necessary at this stage (i.e.: does not contribute directly to the product or its sales) is just ... not present.
  3. people are surely very important, but ONLY in a context of the work they are currently doing - no-one cares about their happiness, career, ambitions, self-development, satisfaction. This is crunch-time! Quoting Jack Ma:
"Today is brutal, tomorrow is more brutal, but the day after tomorrow is beautiful. However, the majority of people will die tomorrow night ..."

And now we're getting to the point of this whole reasoning (yay, it took only 700 words to get here ...):

This brutal & uncompromising "operating model" may truly bring rapid effects - and it did so many times in the past. But it's naive to think that it's sustainable over the long period of time. It's NOT!

For several reasons:

  1. initial enthusiasm can build up a huge momentum, but this fire can't last forever - people (& their creativity) will burn out - and no, people aren't just "resources": they cannot be replaced freely without impact
  2. pursuing forth with huge speed & breaking all the rules to get through as deeply as possible will inevitably get you caught in (exponentially increasing) debt - both the technical & process one
  3. time passes, people have their lives & will inevitably think about their future perspectives, career development & ambitions yet unfulfilled - at some point you need to acknowledge that each company has to provide some sort of (even very simple) performance management, workplace management, talent management or at least structured recruitment approach
  4. as business gets more serious, here come the obligations - contractual & reputational - not everything can be based on heroic individuals' commitment, at some point organisation will require functions like: service support, daily operations, probably an InfoSec related role (or even a few), local IT support, ...

Level Up!

At such point an organisation is NOT a start-up anymore - sure, it still has its vision, business model, feature road-map, ... but as a more mature creation is has also more obligations regarding its members. Now, when survival is far more highly probable (yet the degree of success is probably still uncertain ...), the aspiring fledgling company has to offer them something more:

Yupp, that's the moment when start-up becomes a company ...

And there's nothing to grieve about, just treat it like levelling up (while increasing the difficulty level :D in the same time ...). A not-anymore-start-up sort of organisation can also adopt a modern, lean & light-weight operating model, with a flat org structure, highly independent teams & tremendous effects. But it has to accept the fact that scaling up ain't as simple as bringing in 50 new engineers & assigning them development tasks ...

Sebastian Gebski

Published 19 days ago

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