Startup has been a buzzword, in the US, in China, and now in Southeast Asia.
But, What is a startup exactly?
Paul Graham, founder of Y Combinator, has a great definition for it:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.
In short, as the title of his essay goes: Startup = Growth.
It’s written in September 2012, nearly 6 years ago. But the insights in it are so true and actionable that whenever I re-read it, I’m amazed.
To give you some idea how good it is, here are a few lines from it. To really get the best of it, just visit Paul Graham’s blog.
- …if you get growth, everything else tends to fall into place. Which means you can use growth like a compass to make almost every decision you face.
- For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people…Most businesses are tightly constrained in (a) or (b). The distinctive feature of successful startups is that they’re not.
- How fast does a company have to grow to be considered a startup? There’s no precise answer to that…A good growth rate during YC is 5-7% a week…A company that grows at 1% a week will grow 1.7x a year, whereas a company that grows at 5% a week will grow 12.6x.
- Having to hit a growth number every week forces founders to act, and acting versus not acting is the high bit of succeeding. Nine times out of ten, sitting around strategizing is just a form of procrastination.
- If you want to understand startups, understand growth.