Monday, February 4, 2013

When Are You No Longer A Startup?

In the past six hours, the topic of whether or not a company is a startup, or not, has come up a half-dozen times. I've been meaning to post my thoughts on the topic.

Gnip (a social media company) is a high-growth small/mid-sized company. Gnip is no longer a startup because...
  • our annual recognized revenue became "significant"
  • we successfully made it through our first clump/wave of contract renewals
  • the majority of code in production became tied to said significant revenue
  • we have a lot of customers, and aren't dangerously clumped around a small number of them
  • the product/engineering stuff that we told ourselves "we'd deal with if it became relevant downstream," became stuff we had to to deal with
  • things started working, and you could place a low-risk bet that they would continue to do so
  • the risk of the core product/revenue stream going away became relatively small
  • for the current version of the company and product to succeed, our reliance on outside capital infusion went away
  • we realized profitability was in our control, and something we could have, whenever we wanted to reduce our expense growth rate to something below our revenue growth rate. note, I did NOT say expense cutting
  • after the third time I'd mentally stressed about having a consecutive month that missed expectations, I realized the stress wasn't warranted (we'd exceed expectations *again*). at that point, it was clear to me there was a rock in our repertoire that was rolling downhill (instead of us struggling to push it uphill). even on an upward trajectory there are moments in which the growth rate fluctuates. what matters is that they're all net positive rates
Gnip has plenty of hard work to do; we're only at rev 1 of the company/product suite. I sometimes think about the new stuff we need to do as "startups within the current company." There are lots of relative terms in the above bullet points; I'm aware. This is all just a state of mind for the most part.


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