[tptacek]

Ah, the "hacker/cracker" debate equivalent for software entrepreneurship, complete with the person who says other people have "no business" calling themselves something if they don't meet their specific definition of that something.

Bolted, of course, to the top of any thread that mentions "bootstrapping" or "VC".

[greghinch]

This is more about an internalized understanding of the type of business you are building for the founders than it is about external perceptions. That can be difficult for some, particularly with the prestige we in this community attribute to the word "startup". But understanding the needs of your business and how you want to grow it are key. If you're thinking of your business as a startup, that massive growth is the only way forward, you'll make decisions like taking VC money. If you think of it as a profitable small business, with measured and planned growth, you can recognize that VC money may not be the answer for you.

[tptacek]

I think we understand that you believe businesses that don't aim for shoot-the-moon growth shouldn't call themselves "startups".

The problem is, not everybody agrees with you. I've done both kinds of companies and don't think growth trajectory is the defining feature of a "startup". I'm also not particularly interested in debating the point, since it has very little to do with the story we're commenting on. (I also understand your rebuttal to that point, that the problem this person had was not understanding the distinction you're making, but I also disagree with that argument and find it a little mean-spirited.)

[greghinch]

My only point is to offer hopefully helpful advice to the legions of folks who come to HN wanting to learn how to start their own business for the first time. Many unintentionally assume they need to operate like a startup to their own peril, when in fact they could have had a successful business if not for chasing that label. Certainly no intention of being "mean-spirited". The fact that it might come off that way likely speaks as much to the aforementioned prestige which we place on the term "startup" as anything.

I think creating a business can be one of the most rewarding things a person can do, and I want as many people to find success in that as possible.

[peterarmstrong]

All funded startups are startups, but not all startups are funded.

It is possible to create a business with a very ambitious growth trajectory regardless of whether you have taken VC or angel funding or whether you are bootstrapping. It's just a lot easier to do this if you've taken funding.

In the valley, most plausible ambitious growth trajectory businesses are VC-funded of course; this is not necessarily true elsewhere. As someone who has lived in the valley for many years and before starting a startup outside of the valley, it's easy to understand why: not all funding climates are created equal.

The thing is, your comments come off as extremely dismissive: the implication is that anything not-funded is a "small business", which is the equivalent of a pat on the head and "nice lemonade stand, son" (or, Italian restaurant, if you're DHH).

Finally: say a startup has a high growth trajectory and closes a Series A round. Was it a startup before it closed the round? I'd argue the investors thought so...

[tptacek]

I think he actually means to communicate the opposite --- he's dismissing "startups" as he defines them, and chiding the author of the post for pursuing that model.

[sockgrant]

I wouldn't listen to tptacek. I'm not sure what he's going on about.

I found your comment(s) very insightful. Thanks a lot for posting.

[nfailor]

Absolutely.

If you're starting up you should be questioning the ROI on everything--and trying to figure out what it may be for a VC is part of that.

There's no free l(a)unch.

[frogpelt]

It doesn't appear that greghinch was harping on the semantics. He's harping on the frustration about investors getting to call the shots on feature X or schedule Y.

As I understand it, that's the startup game. If you want to call the shots and build your own dream, don't take the money.

Makes perfect sense to me.

[nostrademons]

Except it's not the startup game. Larry and Sergey got to call the shots with Google (much to their investors' chagrin). Zuckerburg got to call the shots with Facebook. Both of those were high-growth startups that took VC money. They got to call the shots because they were high-growth companies with a lot of leverage.

The startups where the VCs end up calling the shots are the ones that are on bootstrapped revenue and user-acquisition trajectories but with VC funding. You have no leverage in that situation, because they provided all the money and you're providing...nothing useful at the moment. If you're careful about taking VC funding only once you've validated the market and your ability to execute against that market, the investors don't even want to call the shots, because if they just let you be they'll make a whole lot of money for zero effort.

[natrius]

I don't think this distinction is anywhere near as trivial. VC-funded companies have meaningfully different qualities than those that are just trying to build up their revenues. The author failed to internalize this distinction, and it later made him unhappy.

[tptacek]

People who break into computers are very different from people who build novel computer systems. The problem isn't the validity of the distinction.