[thaumaturgy]

pg has been specifically keeping the definition of "startup" narrow, to describe only the businesses that go through the two-guys-plus-vc-plus-sleepless-nights-equals-fast-megabucks pattern that we saw in 2000. I think that's the model he's most interested in, that he sees as the most dynamic and rewarding.

Shiny.

That said, the things you describe closely match what I've wanted to pursue. For me, and many others, it's the more rewarding, long-term way of doing things. Your talk at SS08 was a huge breath of fresh air.

But, I don't think it's all that fair to dilute someone else's definition of a startup with your own idea of what a startup is. It might be time to come up with a different term, and let startup mean the thing that pg and the vc guys and others want it to mean.

[dhh]

I think that's a hijacking of the word that's not helpful at all. And I don't think that pg would argue that you can only call yourself a startup if you're going for VC funding and a sale or IPO.

If so, there's an awful lot of tech companies that have been wrongfully labeled as startups under this narrow definition. And you'd only be able to call yourself a startup in retrospect once you saw whether you ended up being a megabucks exit.

So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?

[thaumaturgy]

No, he might not, but getting funding of some kind is a pretty large part of the kinds of startups that they /are/ talking about, because it makes it easier to develop that massive, rapid growth that gets people's attention. Likewise, a sale or IPO aren't the only ways to derive value out of the startup, but they're the ones that get the most focus, because they're the fastest way to get the desired results (lots of money). I think that this point of view was pretty clear in several of the talks at SS08.

Do I necessarily think that that's the only kind of "startup" that exists? No, not at all. (And I'm probably gonna get busted at some point for putting words in pg's mouth.)

But, in a nutshell, no, they're not talking about the same kind of businesses you are. Others have already made this point for me (http://www.gaborcselle.com/blog/2008/04/startup-school-surfi...).

So, coming back and saying, "No, we're talking about two different approaches to the same thing!" ... well, that's not helpful.

Again, my only point is that they're talking about a very specific sort of model when they use the word "startup". If you think your model is the same thing, I wonder how you'd distinguish between a startup and a "software business", or "web venture", or whatever. (And, I think this point is getting made by other elsewhere, not just in this thread but outside of news.yc.)

[tptacek]

According to Graham, "getting funded" isn't even a part of the plan for most YC startups.

[sabat]

So it's gotten this far now? DHH loves to start fights so much that he had to come over to PG's forum and start them?

PG, who is always civil here, dragged into a stupid semantic fight?

I boggle.

"So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?"

No, man. You're just playing semantic games, and you know it . The company would have been a startup if its founders had the intentions of being large or becoming part of something large.

Really, you have nothing better to do than to come to this nice place and crap all over it?

[davidw]

I think it's quite interesting to see him here. He disagrees, in a polite way. That kind of thing is healthy. I don't really agree with dhh's definition of a startup, but there's probably not a sharp line between 'startup' and 'a new business' in some cases. In any case, I like the 37signals model, even though I have some nagging doubts about whether it's really quite so simple in an on line world where network effects and other economic factors are often very different from "the real world".

[sabat]

Polite?

You're giving him more credit than he's due. He is not polite. Passive-aggressive arrogance is not the same thing as "polite".

[pg]

pg has been specifically keeping the definition of "startup" narrow

Argh. I haven't been doing anything to the definition of the word. I'm just using it as everyone does. Think about newspaper headlines, for example. Wouldn't you be surprised if a company described in a headline as a "startup" turned out to be a shoe repair shop, or Exxon?

[brlewis]

Pardon me for quibbling: it's not about potential growth, but about having an extended period of time at the beginning without significant revenue. A shoe repair shop is not a startup because its debt is expected to stop deepening as soon as the doors are open, not because of its limited growth potential.

I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.

[tptacek]

Would you be surprised to see Threadless described as a startup? What was American Apparel in 1997? A small business?

[Alex3917]

A startup exists to make extraordinary profits by arbitraging a temporary economic disequilibrium by doing more than anyone thought possible with less than anyone thought possible; the industry is irrelevant.

[tptacek]

I don't think that had anything whatsoever to do with my point. Is Threadless a startup?

[Alex3917]

I was just trying to provide a heuristic to answer your question. I don't think it's black and white though. As for Threadless, I do think it's a startup because they invented a new process to fill a temporary market disequilibrium. But if another company came along and did the same thing then I'm not so sure.

[Xichekolas]

Am I the only one that thinks 'startup' simply means a new business without profits? This just seems like a silly semantic debate. 37signals was a startup once, it just happened to choose a different outcome.

Every startup should be free to choose their outcome, and if most choose to try and quickly flip, then more power to them. If they choose to try and build a profitable independent business, great! There is no need to turn the 'liquidity event' vs 'sustainable business' camps into warring factions, like some weird language flame war.

It was refreshing at SUS to see a contrasting opinion, but neither side is trying to argue that their way is the only way. Both ways obviously work, and I think anyone would be happy with either of them over not succeeding at all.