Is Your Company A Startup?

When does a company stop being a "startup" and become something else? When is the "start" phase over? When do you stop moving "up"? Is it when you have 50 employees? 100? 1,000? Is it when you have $1M in revenue, $10M? $100M? Or is it when you become profitable and can sustain your business from operations and don't need more financing?

I'm sure many people think that after a certain size a company is no longer a startup, but for me "startup" is a state of mind and a description of your culture. It has (almost) nothing to do with size.

What is a startup?

To me, a startup is:

Bold: Tackling a big problem or opportunity. Making "bet the company" decisions on a regular basis.

Fanatical: An unhealthy focus on product, usability, customer experience and customer success. Nothing will get in the way of building the best customer experience.

Fast: It quickly responds to problems and opportunities. Check out this great presentation from Mike Cassidy, a startup CEO with multiple exits under his belt. Mike feels speed is so important to startups that it is THE primary business strategy for growth companies.

Fearless: This is related to being bold. A startup not worried about the small stuff like quarterly reporting and it doesn't know what it doesn't know. So, it just assumes it can do whatever it wants to do.

Flat: Even as your company grows, the lines of reporting and communication should be flat and open.

Fun: This is not about foosball tables. It's about being part of a team that's intensely focused on the customer and product and realize they're doing stuff that matters. And doing it in an environment that is devoid of BS, politics, process and TPS reports.

Lean: A startup can't have fat. Excess people,spending, process and internal meetings are all danger signs.

Wild: The best startup people are animals. Like the salesperson who won't take no for an answer, the support person who won't rest till a customer issue is resolved, or the developer who'll stay up all night to get a demo ready. Startups need this intense animal-like behavior to win.

Eat yourself to ensure you're always "start"ing

As I said, startup is a state of mind and culture. No matter how big your company you should always have a startup frame of mind. The day you become comfortable and satisfied with your company, product and results is the day that someone's going to come out of nowhere and eat your lunch. This is true for all businesses, especially for any technology or knowledge-based one. This is why you see companies like Apple releasing new versions of it's iPod that render the previous ones obsolete – even though they're selling like hotcakes. They just pulled off the same cannibalistic stunt with their iPhone product line. The new version is twice as fast and half the price.

With more and more applications being delivered as hosted services, its easy to eat yourself up in order to continually improve your offering. If you don't do it, someone else will.

Can big companies really be startups?

Am I just being idealistic or can companies of any size maintain a startup culture? I say "yes" and offer you two examples: Apple & Cisco.

In a previous post, I declared Apple to be perhaps the best startup of all time. Despite its $24B in sales and 22,000 employees, Apple has many aspects of a startup.

Unlike Apple, Cisco is not run by a passionate, entrepreneurial founder. Instead it has a "professional" CEO. Still, it embodies much of makes a startup successful. In the case of Apple, much of its culture comes from Steve Jobs. In Cisco's case, startups are a core part of their growth strategy and DNA. Nobody acquires more startups than Cisco. And they have a great track record of keeping the people they acquire. That can only be because they have built a company that embraces startup culture, methods and principles.

Do you pass the startup test?

Now that we've looked at what a startup is and seen that this applies to companies of all shapes and sizes, turn to your own company. Do you pass the startup test? Is your company bold, lean, wild? If not, what do you need to do about it? In today's global economy, if you're not starting, your dying. Embrace startup principles and always make them a core part of your corporate culture.

Thanks to StartUpCFO / Mark MacLeod is a Partner at Real Ventures, Canada's largest seed investor.