"Startup" isn't a new term. Yet, it contains many layers of definition. For beginners, it might be a bit hard to identify a company as a startup. Tri is one of our newbies, and his question helps us once again dive into the knowledge base of this term.
Tri: I've just been in this woodland recently, many questions are queuing. For example, what are our products? And what makes us different from other outsource companies?
Han: I think you can benefit from the point of view of a Project Manager. Minh, can you help?
Minh: Well, "startup" means we start something. It depends on the industry that the term "startup" can apply. I believe startup means we produce a brand new solution that changes people's perspective or behavior toward an industry. Is that the definition you looking for?
Tri: I've looked up online. The most convincing so far states that "Startup is a company where they have a core product to scale or develop."
Minh: True. Somehow I still look at us as a startup because we do have products. We offer technical consultancy. Outsourcing is one of those services.
Giang: I once had a chance to attend an incubator for startups. The definition of "startup" in Vietnam somehow gets misunderstood a lot. People take the term startup as "A company that has a product to develop." But that's not it. That's SME (small and medium enterprises). "Innovative startup" is the right one. It's about bringing up something that has never existed before. Startups bring new solutions. SME only has products to sell.
Minh: So, in your point, is Grab considered a startup?
Giang: Well, yes. But it has surpassed and moved to other stages of its development cycle.
Han: Tri, which of the answers above match your question?
Tri: I think I'm on board w Giang. It's pretty convincing.
Han: Take a look at Hey.com. Will you all think Hey is a startup?
Tay: Nah. I think startup is more of a company-based direction. Hey, on the other hand, it is a product backed by a long-term founded team. It's one of the products they create and develop.
Han: Then how about Vin? With the signature slogan "Forever a startup spirit." Is it the same as what we're discussing here?
Tay: It's a spirit that Vin takes as one of their core value. I suppose.
Giang: I still buy in the definition where startup means bringing the new resolution. To approach things with a new mindset and not limit our minds in what we have known. It covers operations and strategy, not just product development.
Han: Paul Graham might be a good start for you all to know more aspects of startups. He's the founder of YCombinator, an accelerator that created a new model for funding early-stage startups. If you're a fan of HackerNews, YCombinator shouldn't be a new thing. The term startups first started as a company with an idea to develop and sell, but eventually, a startup performs a company designed to grow fast.
Tri: So, does that mean "growing fast" is a necessary factor?
Han: It is, along with scalability. Despite the development time, as long as a company model is built to scale, it's a startup. I think a startup's function is based on three main points: Product market, the ability to grow, and optimizable revenue stream. Investors will be likely to assess a startup's prospect through its scale method. The question is: Will that startup is promising enough to invest on? They'll tend to consider the development plan and growth prospects as well.
Giang: In that case, the utmost focus should be the business model, development velocity, and company size.
Duy: But does it mean a company growing fast is a startup? Or is the growing method that more important?
Han: Here's the thing. People might come up with many definitions about a startup, which depends on what they believe and listen to. In general, it revolves around the value that a company brings to the world. I don't suggest using "definition" to talk about things. I prefer one's point of view. Going unconventional is what makes us us.
Khai: Normally, a startup comes with an exit strategy and a scalable economic model. It should notice the right time to begin and when to stop putting resources on the development to ensure the revenue stream flows sustainably and reduce going bankrupt. An exit strategy describes how a business can sell its ownership to an investor or another company, which enables entrepreneurs to limit the losses. Investors can also use an exit strategy to plan for a cash-out in their investment. That explains why startup must be designed to grow fast. It should be able to monetize its idea as quickly as possible.
A startup or startup is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable economic model.
- Don't take definitions too seriously.
- Startups bring new solutions. SME only has products to sell.
- An exit strategy is what helps startups to limit the losses.
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