I would argue that Dropbox isn't a startup anymore.
Once you've found a business model and start scaling your personnel (i.e. Steve Blank's "Company Building" stage), a startup is no longer a startup, IMO.
I suspect a "startup" is any company that is serving a market that has yet to prove it is viable. Many folks use that term to describe any privately held company that is growing into something much larger.
Or a market that is known to be viable with a product that is not yet known to be viable. I think most people would consider Tesla a startup, but cars have been around for a century.
Also for me, a startup has a disruptive nature or mission for an existing market that seperates it from the normal competitive pressure created by new small businesses, franchises, etc.
I never understood who or what Dropbox was ever disrupting to earn such high valuations but that's ok. Sometimes just have to admit when you can't see the forest for the trees.
On my more cynical days my observed definition from context clues would be:
"A company that isn't profitable, but isn't as unhappy about it as I would be yet."
[edit: Worth clarifying that I doubt Dropbox probably ever qualified under my definition... but that's fine. Who wants to be a startup? I'd rather start a company.]
Maybe I'm a lot more cynical than I thought, but I think this is the best definition of a startup in this thread. I'm continually amazed by stories on HN where people invest significant portions of their lives and/or wealth with no idea of how they can generate revenue.
Now I AM going to get cynical by saying it's in the VCs' interest for this to happen, because they can swoop in and grab the few that do turn out to be profitable. The HN dream is a bit like Hollywood - most of the hopefuls who chase the HN dream are going to end up eating ramen through three or four pivots, before they realise quite how bad the odds are against them. Sorry for such a black thought at the start of the week!
No. A growing company is not necessarily a company designed for growth.
Startups are rarely profitable since a company designed for growth reinvests its revenue back into the company to create future growth (think a "ramen profitable" startup vs a "lifestyle business").
Large profits mean the company has run out of investment opportunities.
So in other words, your actual definition of startup is "a company that doesn't make any profit"?
Apple is designed for growth since their inception (when they were still a startup, by anyone's definition of startup) and that haven't changed much ever since (except, perhaps, on the Scully phase... and probably now, under Cook): they kept iterating fast on new products, predating their own margins with internal competition and all those other small things companies designed for growth do...
So a startup is mostly a pyramid scam on investor/IPO money, not interested in a specific end product (since they pivot) or building a profitable company (judging by what you say).
I'd rather have a lifestyle business, which at least until the nineties we used to call just company/business.
You know, like Apple, IBM, Oracle, Microsoft, Adobe et all, despite not being startups are _just_ businesses.
Dunbar's number makes little sense for directly determining/classifying organizational sizes. Most of peoples' relationships lie outside of the organization they work for. You'd probably have little to no relationship with people in your organization way before you reach Dunbar's number.
Well, it may be 50, it may be 150, but the point is, it's probably fine to call a company of 10 a startup, and it's absurd to call a Google or Facebook a startup.
Which leaves open the question of what to call Dropbox. Well funded, profitable, late-stage startup? Sounds like too much of a mouthful.
I see your point, but there's more numbers when it comes to companies, there's a break at 7 or 8, and another one somewhere around 20. I might have fudged the numbers a littlebit, but they're both breaking points when a company needs to change its organisational structure: Starting with a flat, informal startup, at 7 or 8 is where people may feel their voice is not informally heard at (for instance) meetings, that needs to be addressed by a (slightly) more formal type of meeting. Somewhere around 20 there's a second break which is when you need to start thinking about an extra level of management (just one at first, of course). There's probably a few more that I don't know of and I would not be at all surprised if Dunbar's number is one of them.
"In my opinion it is at 5 that the feeling of "team" really starts. At 5 to 8 people, you can have a meeting where everyone can speak out about what the entire group is doing, and everyone feels highly empowered. However, at 9 to 12 people this begins to break down -- not enough "attention" is given to everyone and meetings risk becoming either too noisy, too boring, too long, or some combination thereof. Although I've been unable to find the source, I've heard of some references to a study from the 1950s that says that the optimum size for a committee is 7. Likewise, it's fairly easy for us to see and agree that a dinner party starts to break down somewhere above 7 or 8 people, as do also tabletop games of both the strategic (I prefer 5) and role-playing varieties (I prefer 7). These size limits can be overcome, but require increased amounts of "grooming".
"The chasm that starts somewhere between 9 to 12 people can be especially daunting for a small business. As you grow past 12 or so employees, you must start specializing and having departments and direct reports; however, you are not quite large enough for this to be efficient, and thus much employee time that you put toward management tasks is wasted. Only as you approach and pass 25 people does having simple departments and managers begin to work again, as it starts to really make sense for department heads to spend significant time just communicating and coordinating (and as individual departments become large enough to once again allow for the dynamic exchange of ideas that had previously occurred in the original 5-9 member seed group).
"I've already noted the next chasm when you go beyond 80 people, which I think is the point that Dunbar's Number actually marks for a non-survival oriented group. Even at this lower point, the noise level created by required socialization becomes an issue, and filtering becomes essential. As you approach 150 this begins to be unmanageable. Once a company grows past 200 you are really starting to need middle-management, but often you can't afford it yet. Only when you get up past that, maybe at 350-500 people, does middle-management start really working, primarily because you've once again segmented your original departments, possibly again reducing them to Dunbar-sized groups."
That eliminates capital-intensive businesses. I think most people would consider Tesla and SpaceX to be startups, but Tesla has 3500 employees and SpaceX has >2000.
I honestly don't know why you'd need 250 people to run a service like Dropbox. Dropbox is a piece of software that could recreated in about a month by a smart hacker; and if you're using AWS, you don't have worry about the servers (so don't need a sysadmin/maintenance staff) -- so, theoretically could be comfortably run by a handful of skilled core engineers.
Why are 250 people working at Dropbox? Is Dropbox overstaffed?
> Dropbox is a piece of software that could recreated in about a month by a smart hacker;
A service running on AWS with intra-account deduplication, with signup, referrals, billing and support, Windows, Linux, Mac, iOS, Blackberry, Android, kindle and web clients, all internationalised into English, French, German, Italian, Japanese, Korean, and Spanish (both European and Latin American), and an API with six platform-specific SDKs for Dropbox integration.
Dropbox is also somewhat of an enterprise sales play now. I am sure they have a decent sized sales team to get more companies onboard with teams accounts.
It's a genuine question. To my mind, a startup has a small number of employees and not very much money. This is hardly the first time I've heard of a company with >100 employees described as a startup, so I'm interested to know what people's definitions are.
>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.
I once interviewed with a company that maintained a staff of <25 people throughout its entire 8 year existence. It struck me as odd when they described themselves as a startup.
According to Paul Graham, "a startup is a company designed to grow fast."
By this definition, they didn't fit the bill. Dropbox might, depending on whether or not they're still in a rapid growth phase.
Well, it can get confusing when "a company designed to grow fast" doesn't, and yet still has enough revenue coming in to not die. I worked at a company that considered themselves a startup when I first interned there in 2004 (they'd been founded around 2002 and had just gotten their first 7-figure contract). When I left in 2007, it was apparent they were really a small business, they started calling themselves a small business around 2009, and they finally went out of business in 2011. I think headcount topped out at around a dozen in 2006 - it'd been around 7 at my first internship, and I think it was down to just founders when they went under.
It seems like you're taking the term "fast" to refer to the number of employees. I think it refers more to revenue, or maybe user acquisition for those "we'll figure out how to make money later" companies.
Technically I believe any company that is less than 2 years old is a startup, they have a limited operating history. VC funded startups that are supposed to grow hyper fast but lots of statistics we see also count every new small business.
Billion/million rule is the cutoff for "real startup".
It stops being a startup when, if acquired or IPO'd for $1 billion, a full-time entry-level engineer makes less than $1 million after taxes. For straight equity, that puts the cutoff around 0.2%. For options, it depends on the strike.
By 250, new employees are getting much less than that.
What is the definition of a startup these days, anyway?