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When does a startup stop being a startup?

Entrepreneurship is a state of mind, something very different and unique. Is it possible the product, created by an entrepreneurial mind, to become afterwards something like a business cliché? This thought leads us to the conclusion that may be startups never stop being startups. They just grow and change, improve and develop, but always carry the uniqueness of their kind.

Often it is being referred to Google, Facebook, LinkedIn, Twitter as startups, even though their existence goes far beyond the Wikipedia’s definition for this term, where the startup model is explained as “newly created company in a phase of development and market research”. Why does this paradox exist? Is the startup label too difficult to escape from or it really doesn’t have to be escaped?

Many startup founders worry about the switch of company model, because then the whole style of managing the company, from the finance, accounting, human resources to the company’s culture, has to change. This switch can be painful or can come naturally. It is different for every company.

Many opinions suggest that a startup stops being a startup after significant increase of market shares, financial proof of good profitability and longevity, perfect fit of the product on the target market. After a successful IPO, afterward attracting major angel investment or subsequently an acquisition from bigger company, it is hard to still go with the startup title.

Entrepreneurs experience expressive attachment to their startups. They feel connected to everything that is going on in the company. One of the biggest signs that your business is becoming well-established, strong firm is when you realize that the work process goes smoothly even if you are not there for a while. This bittersweet feeling proves that you have developed a company which functions efficiently because of the hard work you have put in to create great team, strong customer relations and perfect work environment. This emotional discovery can come as a shock, but it is a sign that you have achieved a lot.

The rise of your employee number is an interesting way to realize that your company doesn’t rock the startup title any longer. The moment when you go to a meeting and there are people whose names you cannot recall is significant proof that your team has grown, therefore, your company has grown.

There are some positive outcomes from this whole process of change – this means that you have succeeded to create strong company. Customers often are more comfortable to purchase from bigger and fully established companies which imply more value, but on the other hand startups have stronger culture and presence at the worldwide entrepreneurship community.

In the end, it comes simply to just one figure of speech and it probably doesn’t really matter much what kind of label your company will carry. Better pay attention to the moment when your company jumps from the group of “Startups” to the group of “Successful Startups”, which is another way to measure the success.

─ November 4, 2014