What is a startup? – Scalable Business Model.
by Connor Jeffers
Startups are all the rage these days but exactly what is a startup? Is it solely based on a good idea of a person or a passion turning into a business? How difficult is it to start a startup for someone who is still in his early 20s?
Hey there! I work in a company that starts startups. You brought up a lot of great questions and I’m going to do my best to answer each in as simple a way as possible
What is a startup?
While your working definition of a “tech company with less than 100 people” isn’t wrong, it fails to encompass the entire data set. People argue relentlessly about what a startup is, but personally I prefer Steve Blank’s definition of “An organization designed to search for a repeatable and scalable business model.”
What that means is a group of people that are working to discover a way to do business predictably, and at high volume, usually in a way that hasn’t been done before. These days companies pursuing this goal are generally Venture Capital backed, since they need the money to figure out their business model, and seem to be in tech due to the low barriers to entry. However, this is not essential to be considered a startup.
Why do startup founders never choose to keep [the business] and grow into a large company?
Actually, some of them do. That’s how we got companies like Apple, Facebook, Uber, Google, etc. Any company that started as a startup, remembering the definition above, and is still around as a stand alone entity and either privately or publically held would have resulted from founders that did this. It could be argued that any business that isn’t completely comidifed was at one point a startup.
Who is it that buys these startups?
Lot’s of folks. Generally the two main groups are private equity firms looking to cash out on the growth and larger companies looking to add the purchased company’s technology, people, market, or brand into their own. There are lots of ways companies might benefit from this, far too numerous to count.
What is startup – it about Silicon Valley that attracts ?
I think the biggies are access to capital (high density of VC firms to raise money from), number of talented “startup people” (from the economies of scale created by other tech startups), and just pure buzz generated by the combination of both of the above and the renown of companies located there.
Is Silicon Valley just full of clever rich people?
No. Though it does have a very wealthy and predominantly overaccomplished and highly successful demographic compared to the rest of the US.
What do you need to work for a startup in Silicon Valley?
At a base level, skills. These companies are agressively hiring (if they’re doing well) and that means they are always hungry for new talent. If you’re good and can add value to the company they are sure to be interested. In fact, nearly all of them have staff exclusively dedicated to finding talented people to join their cause.
Of course, some connections and an intro can get you a long way towards demonstrating your skills to the right person.
Are there many jobs in Silicon Valley that involve hands on work solving complex problems that are more hardware than software related?
Absolutely. Here is a list of currently on Angel List (a popular Startup network) exclusively for Hardware Engineers in Silicon Valley. [Read more….]