Let’s get one thing straight. If you have customers, you’re not a startup.
If you’re a unicorn, you’re not a startup. Uber, SpaceX, AirBnB are not startups. Actually, if you have any valuation whatsoever, you’re not a startup.
We need to kill this infatuation with startups. To make startups unsexy. Because the startup fad is bad for those of us who are serious about building real revenue businesses.
Steve Blank hit the nail on the head when he defined a startup as "an organization formed to search for a repeatable and scalable business model".
So as long as you are in “search” mode (which is distinct from “build” mode), you are a startup, but you are not creating value.
When you move into execution, then you are a business. A fledgling business, a baby business, a proto-business, a growing business, a real business because there is value being created, customers being served and revenue coming back. You might not be revenue positive yet, but you are a business, not a startup in search mode. Being a business is good, because you are generating value.
It seems to me that if you’re a startup, you want to get out of the startup phase as fast as possible. A startup attracts users who are only interested in a new, shiny toy. As soon as something else newer and shinier comes along, those first users will move along. That's no way to build a business.
Real, paying customers don’t want to do business with a startup. They will invest their time, money and loyalty to a real business who demonstrates the power to stick with it.
When you are a real business with real customers and real revenue, your valuation means something. You can then go out and buy your Tesla because you’ve earned it.
We need to stop encouraging more startups with all of these free or cut-rate spaces for incubators or free advice or free money or free mentors. It’s like saying we need more kindergartens, and giving the kids no reason to move on to first grade. Because when you can get all the candy you want, and there's someone to change your diapers, why would you want to move on?
What we need is more growing businesses, and to pour our resources into encouraging and supporting growth.
Startups don’t create wealth, they consume it. Prosperity comes from growing business who are creating, delivering and harvesting value.
Let's make startups unsexy. That way, we can kill the startup fad and focus on what’s important: encouraging business which grow and generate tangible value for customers, employees, investors and all stakeholders.
Davender Gupta's passion is to guide high-performance entrepreneurs to develop the clarity, the confidence and the discipline to successfully execute on their ideas. He is a nationally-renowned coach and mentor to many startups businesses and scaleups. www.coachdavender.com