Start Up, Times Up

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This week I tweeted ‘How long must a company be in existence before it is no longer classed as a start up?’.  I had some suggestions such as ‘When it’s making a profit’ but nothing satisfied me regards a comprehensive answer.

I asked this because earlier in the week the FT reported that the (great) business Skyscanner had been valued at $1.6bn taking the business into the so called ‘unicorns’ of British industry.  Specifically the FT states:

‘…The fundraising round makes Skyscanner one of the UK’s most highly valued technology start-ups…’.  

Skyscanner was incorporated on May 16th 2001.  Thats almost 16 years ago.

A start up is defined as ’embarking on a new commercial venture’ or ‘a newly established business’.

I don’t mean to pick on Skyscanner here, the business is marvellous, but I am using this example to highlight one illusion peddled by our press.  I don’t see how a business 16 years old can be classed as a start up.  Is lastminute.com still a start up?  Amazon?  Indeed I can fully comprehend how a management team keep in play and protect a ‘start up’ culture, from first hand experience I think it’s very valuable, the ideas moving moving quickly, being nimble, devolution of decision making etc…but that doesn’t mean the business actually is a start up.

Only this weekend do the Guardian run a feature on 2016 start ups to watch which includes Made.com.  Made.com was established in 2009, 2016 will be the 7th year of existence.  Surely this is the very tail end of a companies period of being classed as ‘start up?

So when is a start up no longer a start up?  what metric(s) one should use to determine a companies status in its development? profit? number of employees? time in existence? turnover?

I’ve thought about this and I decided on time in existence.  No matter if the business makes a profit or loss, has 1 or 10,000 employees or has £1 to £1m turnover, a start up can no longer be a start up once the initial phase of enterprise has passed.  But when is that?  Skyscanner could argue they’re still in their initial phase couldn’t they?  maybe but i’d doubt the majority of observers would agree.  Its the majority of opinion which I think counts here.  I’d suggest the initial period of enterprise is over once consistent trading is established i.e.: a regular pattern of sales no matter if at a loss or not and regardless of employee numbers.  Of course, this point needs refining but I believe the overall train of thought is correct.

To be explored in further posts!

 

 

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