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When Does a Company Stop being a Start-Up?

Nick questioned this after reading how Buffalo NY has a higher startup than Seattle and I thought it was a great question. He questioned whether Facebook, Craigslist or even Skype are considered start-ups (as they mentioned these companies in that article as being startups).

In my opinion, Skype and Craigslist are no longer startups, they are market leaders in their category and have ironed out their business models. Thus, Facebook could fall into that as well, but I don’t think Facebook has ironed out their business model yet — or rather maybe they have, but it hasn’t exploded yet as I someday expect (with the entire web having a Google AdSense alternative that will be Facebook AdSense ads).

Is a startup still a company without a revenue model figured out [i.e. Youtube back in the day, despite being the market leader, I would have considered them a startup still — not sustainable on their own w/o outside financing], and I also question whether the amount of employees relative to what the company will likely be eventually, pulls them down to being considered a startup still.

In my opinion, Twitter is still a startup, despite being huge and a market leader. I don’t believe they have nailed down their business model, or grown their employees anywhere near the size that they will be someday.

What about Zynga? They have a business model, they have 1200 employees [just purchased office space to get to 2000 employees], and they have some games (products) that are their lifeline. The revenues they are pulling down could sustain them as a company.

Do you think Zynga is a startup still?

  • http:://magnachef.org Dan Magnuszewski

    I wouldn’t consider Zynga, Craigslist, or even Facebook startups any longer. I’m sure that there is a very complex formula to determine when a company is no longer a startup, but It seems that once you become profitable enough that you no longer require venture funding, that you are no longer a startup.

    Would you consider Synacor to be Startup?

  • http://www.arekskuza.com Arek Skuza

    Great post. Love it as it nailed down some important things – when you are not startup ceo. I realy like it.

  • http://www.jonathanvolk.com Jonathan Volk

    Good point! It’s funny to call Zynga a startup now that they have projected revenues of $500M! At the same time… they’re only 18 months old.

    So crazy to think…

  • http://site.dueforself.com/Maliks_business.php Malik S. Muhammad

    very interesting view point regarding start up companies;

    i do agree that a business is still in start up stages if there is no revenue streams coming in for work and effort is excuded.

    thank you.

    Malik

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  • steve

    I think a startup is just testing the idea of the business model and seeing if it’s real and sustainable. I think once you get the first few paying orders in the same way, (ie. you’ve found a way to get people to buy from you without having to change anything about how you sell or what you are selling), then I think you move from a startup to a micro-business. From that point on, you have a proven business model (people are buying something from you), and you just have to survive and grow.

  • steve

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