Maybe, but I didn't invent it. It's just the definition in current use. As most people use the word, it's more specific than a business that's merely new. As most people use the word, it doesn't include barber shops, gas stations, shoe repair stores, etc. There are structural differences between that kind of company and a startup. McDonald's and Olive Garden aren't restaurants, but restaurant chains. They do things very differently from your local Italian restaurant.

But that's again off topic. I do agree that the startup term is most frequently associated with technology companies, but you do hear about startups within a fair number of other lines of business too.

Sometimes the chain guys will take a restaurant that's successful and turn it into a chain, but when they do this they usually keep nothing more than the name and a few recipes. McDonald's was a burger place started by the McDonald brothers, but it only became the McDonald's we know after Ray Kroc bought it and transformed it into a chain.

I agree that startups don't have to be doing technology. I don't remember saying otherwise.

You're right; restaurants conceived as chains dominate the top of the list, with some very notable exceptions, including KFC, Starbucks, and Subway.

Something else that the top of that list shares in common is that they were lucrative for their investors.

Something else that they share is that they are all crappy. Look how far down that list you have to go before you hit something you'd actually choose freely? In-N-Out is #89.

Basically, the difference between a small business and a startup is like the difference between a shrub and a redwood seedling.

The metaphor isn't perfect, because occasionally companies are transformed from one to the other. But this is extraordinarily rare.

How many YC companies fit this definition? I thought the goal was to make the founders rich, which so far hasn't included growing into a big company.

Amer. Heritage: A business or an undertaking that has recently begun operation: grew from a tiny start-up to a multimillion-dollar corporation.

Note that's just example usage; startup doesn't denote a design to become a big company.

  I thought the goal was to make the founders rich, which so far hasn't
  included growing into a big company.

Also, with only minimal snark intended: you're saying 37Signals is a "shrub"?

In the Apple/Microsoft initial period, there were plenty of smaller competitors who wanted to slowly sell stuff to hobbyists and "expand naturally" and none of those companies exist anymore.

There were no desktops when Microsoft started. There was the Altair, and they started by writing a basic for it. The market was not planetary as it is now.

Apple was started by a guy who wanted to make the best personal computers

Woz was making computers for himself and to show off at homebrew. From his own words, the Apple I was a PC board they sold to hobbyists for $40 apiece after manufacturing them for $20, per Jobs's egging. You're probably right about Yahoo, but MSFT and APPL did not start out as global reach companies. They started out as local restaurants.

If that happens to lead to a billion-dollar company, awesome. But the odds of business tells us that's probably not overly likely, so we're making sure we'll be happy even if that doesn't happen.

(Who knew merely being satisfied with millions -- single, tens, or even hundreds -- would sound like a humble goal in this context.)

You've assumed that 37Signals refusal to staff up and take speculative VC rounds means they're steering the ship away from being "a billion dollar mammoth". But 37Signals is more successful than most of the companies (yes, most) that take VC rounds, and has enviable revenue growth.

I think you're seeing a business model that doesn't fit the YC get-rich-quick mold --- and that's what it is, read the essays --- and pushing it into a "small business" bucket. The real world doesn't bucket like you want it to.

We now return to your regular program...

Some times they will simply develop concepts (often 4 or 5 at a time) start one of each, and see what sticks.

I've studied the restaurant industry quite a bit and can only think of a few chains that stumbled into it.

Shiny.

That said, the things you describe closely match what I've wanted to pursue. For me, and many others, it's the more rewarding, long-term way of doing things. Your talk at SS08 was a huge breath of fresh air.

But, I don't think it's all that fair to dilute someone else's definition of a startup with your own idea of what a startup is. It might be time to come up with a different term, and let startup mean the thing that pg and the vc guys and others want it to mean.

If so, there's an awful lot of tech companies that have been wrongfully labeled as startups under this narrow definition. And you'd only be able to call yourself a startup in retrospect once you saw whether you ended up being a megabucks exit.

So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?

Do I necessarily think that that's the only kind of "startup" that exists? No, not at all. (And I'm probably gonna get busted at some point for putting words in pg's mouth.)

But, in a nutshell, no, they're not talking about the same kind of businesses you are. Others have already made this point for me (http://www.gaborcselle.com/blog/2008/04/startup-school-surfi...).

So, coming back and saying, "No, we're talking about two different approaches to the same thing!" ... well, that's not helpful.

Again, my only point is that they're talking about a very specific sort of model when they use the word "startup". If you think your model is the same thing, I wonder how you'd distinguish between a startup and a "software business", or "web venture", or whatever. (And, I think this point is getting made by other elsewhere, not just in this thread but outside of news.yc.)

PG, who is always civil here, dragged into a stupid semantic fight?

I boggle.

"So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?"

No, man. You're just playing semantic games, and you know it . The company would have been a startup if its founders had the intentions of being large or becoming part of something large.

Really, you have nothing better to do than to come to this nice place and crap all over it?

You're giving him more credit than he's due. He is not polite. Passive-aggressive arrogance is not the same thing as "polite".

Argh. I haven't been doing anything to the definition of the word. I'm just using it as everyone does. Think about newspaper headlines, for example. Wouldn't you be surprised if a company described in a headline as a "startup" turned out to be a shoe repair shop, or Exxon?

I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.

Every startup should be free to choose their outcome, and if most choose to try and quickly flip, then more power to them. If they choose to try and build a profitable independent business, great! There is no need to turn the 'liquidity event' vs 'sustainable business' camps into warring factions, like some weird language flame war.

It was refreshing at SUS to see a contrasting opinion, but neither side is trying to argue that their way is the only way. Both ways obviously work, and I think anyone would be happy with either of them over not succeeding at all.