What is a startup? Is Facebook still one?

The question came up post-crunchies where Facebook won the best startup and Twitter was runner up. The post crunchies conversation in the group I was in quickly turned to what is a startup and when does a company stop being a startup. Clearly Google is not a startup anymore. People also generally agreed Facebook is not a startup. About Twitter, there was mostly consensus that it is a startup at least for a little while more.

The question is what makes a company a startup
1. Is it the number of employees (Zynga has 750!, Twitter has less than 200 – from what I know)
2. Is it the valuation (post billion dollars – you are not a startup?)
3. The company does not have “professional management”. Has a more startupy feel?
4. When company is still figuring out its business model

What other criteria defines a startup? What do you think?

15 thoughts on “What is a startup? Is Facebook still one?

  1. A startup starts with the intent to build X. Once they build X, they become a business that sustains and grows X.

    X may be a product, a service, a new approach to an existing problem, anything. Once they move from the first build to having to sustain it, it’s becomes a business.

  2. like you said in your “is it time to reimagine your business” piece, facebook and twitter are vintage 2007 or so, just after the flickr/delicious/myspace wave, right ? not startups. sad the crunchies whiffed that so badly. it’s good to note your outrage. is it that the internet is sort of done with innovation ? i doubt that. it’s just become a lot harder to consolidate a huge wave of “everybody” as more and more basic needs are fulfilled. once upon a time, you could put a girl and an umbrella on a circular box of salt, and there was an eternal brand. sure, there were many other puzzles involved, but you could brand salt, and it would be a “forever” brand. it’s a bit more complicated now. the essential key, though, and it’s something missed by the crunchies, is FUN. americans have FUN starting up new viral doohickeys and enchanting their friends. kevin rose, ev williams, sean parker, matt mullenweg… they are a really fun bunch of people, and i don’t even have to know the foursquare or yelp or tumblr or skitch people personally to know they’re keeping up the rad tradition of entertaining ourselves by starting cool cultural trends. and basecamp ? 37 signals’ new single sign on totally reinvents everything i have ever known about cloud services. so there is amazing stuff out there, and… and I am getting a bit too close to tricky secret business model strategy stuff i can’t really disclose right now. sorry! thank you for the thought provoking post.

  3. i was too harsh on the crunchies. tinychat is freaking awesome, i was specifically saying “best startup” could have been something a bit more clever than facebook and twitter, who are more Nobel Prize territory given their effect on #iranelection etc.

  4. Hello Rashmi

    Thanks for writing this post. Voicing my question to be honest. I had exactly the same questions. I believe that facebook isnt a startup anymore. The owners had an idea which was successfully implemented and now they are into expanding and developing and sustaining – it hence becomes a business. Agree with Philip.

  5. Is a startup only an online tech company? I mean I’ve had a successful “brick and mortar” business for 8 years with 50 employees. I don’t consider it a “startup”, but what do you think?

  6. I loved the post, especially because it made think about my business and my ideas. The question that you left is critical for business, especially for web companies.
    Thanks for the post.

  7. When I think of a startup, I think of the guy in his garage making widgets. I think valuation is part of it. But define valuation with vc money. Perhaps an established product identity or image would be a cut off point?

  8. Pingback: But is it a startup? | Beverley Merriman

  9. Thanks for the article. I am a young finance professional myself who recently launched a fund in Utah and I love to read about others who did the same and made it to the top. Hope to be there someday.
    Thanks and Regards/-
    Jason Webb

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