The term ‘startup’ was born during the dotcom bubble when companies first used the Internet to turn a profit and create highly scalable business models. Ever since, the term has been bandied around with ever-increasing frequency. But what is a ‘startup’? A proper definition can be difficult to agree upon. A quick internet search floods you with a plethora of definitions. According to Merriam-Webster, a startup is ‘the act or an instance of setting in operation or motion’ or ‘a fledgling business enterprise’. The American Heritage Dictionary suggests it is ‘a business or undertaking that has recently begun operation’.
The newly installed mamak down the road from my place might seem to fit some of these criteria – it is new, has few resources and therefore a ‘bootstrap’ mentality, and will likely experience a turbulent future. But without technology in its business model, we can at least all agree that this is no startup. Given how loosely defined the term is, it’s hard to know what exactly comprises a startup and when a startup has graduated to the next level. Would the deciding factor lie in the number of years since creation? Or is it rather based on profitability and staffing level?
The lack of a universal definition, coupled with the freshness and ‘cool’ factor associated with startups, led to a massive abuse of the term. The label startup exudes youth, boldness, and innovation. Startups are here to make the world a better place. Startups tackle century-old problems with new platforms to make our modern lives simpler and more efficient. How did I even live without FoodPanda and Uber? Wouldn’t you want to work for the ‘next big thing’?
No one can deny the alluring effects of the label and companies are taking advantage of this by cashing in on this dream when hiring. Increasingly, companies are claiming to be startups in a bid to snatch up qualified staff at lower salaries – ambitious careerists who are attracted by the pledge of innovation and bean bags in the office. At the end of the day, there is value in being associated with the latest fads even if your connection to it is questionable.
The attractiveness of the fad is creating a whole subculture devoted to startup-dom. A subculture that all too often benefits the co-founders or top-level employees. We’ve all heard about overworked, underpaid, and under-appreciated employees sticking around with high hopes of having their piece of the dream. ‘It’s the startup life’, some say. ‘Do it for the company!’ say co-founders when asking for that extra effort on a Sunday after a 60-hour work week. ‘Work hard, play hard’ is the mantra but for most, the playing never comes. Just last August, Zirtual laid off it’s 400 employees overnight by email after a last minute round of funding failed to come through.
This over-applied label has long outlived its usefulness. Will there come a time when the bubble bursts? When we stop calling companies past a certain age startups? Or when the term becomes scantily used for fear of being associated with the high-failure rate that is currently the case with companies labelled as startups? When will we truly start calling companies for what they really are? A sharing economy business, a logistics company, a technology platform, and so on. In a world where Uber is still listed among Forbes’ top startups of 2015 (yes, 2015!), it makes you wonder when this will all stop. And once it does, perhaps the term startup will truly only be used for companies at their pure infantile stage.
Are we abusing the term ‘startup’? Do you get all glittery-eyed at the thought of working for a startup? Do you think some companies abuse this label as either a security blanket to allow for mistakes, quick restructuring, or to appeal to talents wanting to wear the startup badge?