Scaling up successfully is critical for a startup and so we thought it would be a great time to get some advice from people who’ve been there and got the T-shirt. So for this new mini-series I’ve sat down with Dan Medlock of Streetbees, Aarish Shah of EmergeOne, Will Brown of Cloud.IQ and Simon Cole of Molewood Consulting – all of whom have great first-hand finance experience of scaling up a tech business. We kick off the series with “When is a startup no longer a startup?”.
Dan Medlock, Finance Director at Streetbees
I would say that a startup stops being a startup when it has achieved that first degree of product/market fit and it can really start building repeatable, scalable processes. Once a business has truly established what its product is, who to sell it to and how – that for me is when it stops being a startup and starts being a growth enterprise.
Aarish Shah, Managing Director at EmergeOne
For me, a true startup is a business which is post-idea, iterating on a very early product and still finding product/market and a business model fit. I talk a lot about business model/product/market fit because if you have product/market fit but no one is buying your product then you’re not going anywhere. I think a startup stops being a startup when it’s found that business model/product/market fit, has a healthy and more predictable stream of revenue and is effectively growing.
Will Brown, CFO at Cloud.IQ
I don’t believe there is one agreed definition of a startup. In my mind a startup is a Company with certain characteristics such as high growth aspirations; usually a cash burn; it hasn’t yet proven its market fit, its pricing or its best sales delivery model and of course has a funding requirement. This l suppose means a startup is more to do with its stability and certainty over its future. The shift to no longer being a startup is gradual of course, and hopefully as a new business finds it feet, matures and gains certainty over its direction, it will move on from startup status. That’s not to say that a lot of the challenges a startup faces will have necessarily gone away.
Simon Cole, Partner at Molewood Consulting
Startup is a very cool phrase that someone came up with a long time ago. Companies want to call themselves that so they appear to be a champion. Back in the day, Richard Branson, through Virgin Atlantic appeared to take on BA and everyone applauded him because he was taking on the institution and the big players, however that time eventually runs out and then you’re no longer this young company that is taking on the system, you’ve become the system. What’s the answer? I think it’s the size of the company; the number of investment rounds it’s been through and successfully come out of; and if it’s revenue generating/profit making. Then I think there’s a limitation on how charming that underdog / disrupter role is, and after a while it becomes all about money money money and it’s lost its “Startup” vibe and credentials
Keep an eye out for topic #2 next week