I've been mostly in startups for the last 10+ years. Until recently the main thing you needed to be good at is getting more VC money. That is correlated to certain measures of success but having a ton of free money means you can patch a lot of failures over that would bankrupt most companies. Then either sell or IPO before the house of cards came down. It's been interesting watching over the last year as that strategy started to no longer work.
On the one hand, I'm grateful that era is finally coming to an end. Things were so much saner after the dot-com bubble popped.
On the other, I really worry that we now have a generation of entrepreneurs and employees who have only ever known a bubble environment. Many will have a hard time adapting to the actual reality of running functioning businesses.
If your goal is to make a lot of money (not just some money) then using VC money to get there is a very reasonable play. Just siphoning some money from later rounds could give you tens of millions. You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money.
> You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money.
Getting a big exit is my goal as a founder. Investor capital is spent to get to that exit. People who have the goal of making money off investors make self-enriching, bad for the company decisions.
But the vast majority of companies referred to as "startups" versus "small businesses" fall into that category. We can discuss the other case but the person I replied to explicitly said "startups."
Most new and growing tech startups are not in fact VC funded. My point is it's an amazing marketing win by financiers. And here we are now, with what the weird minority do sounding like the expectation for startup business practices vs what most actually do.
"Startup" by definition is companies that need large-scale growth to succeed. Uber, DoorDash, those kinds of businesses are start-ups. It doesn't need to be VC investment necessarily, but it needs a lot of capital to get going and there's a certain amount of network effects. That's not marketing, that's what the word means.
> Most new and growing tech startups are not in fact VC funded.
Then they're probably not startups, but just tech businesses. Nothing wrong with that - they're objectively better in my opinion - but let's not call them something they're not just because we like the word or we want the cachet of being associated with something we're not.
> "Startup" by definition is companies that need large-scale growth to succeed
By your definition. And maybe a bunch of people who read the PG essay that narrowed the word that way. But not by the definition of 99.9% of economic participants.
Investopedia's definition, for example, bears no relationship to the PG definition. Neither does Webster's, dictionary.com's, or any entrepreneurship textbook you might find. Even Steve Blank doesn't define it that way.
I would draw the line slightly differently. Bootstrapped startups are still startups. So for me the definition is more "company exploring a novel technology, product, or business model". Most new businesses are doing something that's well understood. Opening a new restaurant or corner store is hard, but it doesn't have the same need to figure out something fundamentally new.
Numbers-wise, I'd think VC-funded startups merit the distinction. They're (a) relying on financiers to make their strategy work (b) there's significant positive & negative impacts of that decision vs everyone else (c) they're the minority.
Startups using non-VC revenue are the majority and also doing all sorts of great work in invention+innovation in tech, business model, doing with scalable ideas, etc. VC $ buys things like press relationships and "X raised Y" headlines, but thankfully the days of breathless capital raise news on tech crunch are much more zzz now.
This really depends on a definition of success that includes creating massive money burning firepits. Now to be fair some of the chief firepit architects got very rich doing so.
Being good creates the luck. I'm not saying it does not happen the other way around but it's fantastically rare to just "luck out" your way in to success.
Product/market fit doesn't fall out of the sky either. It's created by being good.
Most companies are not startups. There are plenty of bumbling people running million dollar (and thats it forever..) businesses. And they are the boss.
Startups are explicitly disrupting the status quo. Yeah, one needs to be good enough to do that but it’s nothing to downplay. That is hard in a world of established actors.
Leadership matters, Apples history is a prime example of this as shown by first faltering without Steve Jobs and then becoming the most profitable company after he rejoined.
Nonetheless, you're still attributing way too much to the ability of the leadership. After all, that story is so remarkable precisely because it's pretty much the only well known example of this.
You need to be good to succeed.