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0 pointsroymurdock10y ago0 comments

You're leaving out all of the companies between the two extreme poles that you just set down. What about a small, 5% gross margin software "startup" that takes on small investments with decent YoY growth that never makes TC news. Or a chain of coffee shops that experiences huge growth and raises high-visibility funding rounds, such as Philz Coffee? What is Palantir?

Companies that are designed to grow fast by swapping profitability for free, user-attracting features will not do well in the current investing environment. That is the point of the article. The investor is looking for less risky, less high-growth oriented companies - aka slow startups.

While you may not agree with my call to revisit terminology, it is poor form to insinuate that I am an idiot whose goal is to derail conversations by torching old terms. The hostility is unnecessary.

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morgante10y ago· 2 in thread

> You're leaving out all of the companies between the two extreme poles that you just set down.

Of course there are lots of nuances. I wouldn't say that Atlassian is an extreme pole though—it actually contradicts a lot of the narratives people tell about startups.

> What about a small, 5% gross margin software "startup" that takes on small investments with decent YoY growth that never makes TC news.

TC is absolutely not a prerequisite for being a startup (it's essentially a fashion show, which is relatively orthogonal to business). If this 5% margin software business has a realistic plan to grow into a large company and has strong growth then it absolutely is a startup, even if it's not fashionable.

> Or a chain of coffee shops that experiences huge growth and raises high-visibility funding rounds, such as Philz Coffee? What is Palantir?

Both are absolutely startups, their business model just isn't selling ads. They were both designed to grow big and used funding to get there.

> The investor is looking for less risky, less high-growth oriented companies - aka slow startups.

Yes, the investor is becoming more risk-adverse. That doesn't mean they're suddenly a bank looking to fund small businesses. I could walk up to her with a plan for opening a laundromat which was guaranteed to turn a profit in year 1, but I guaranteed she'd still be uninterested. Likewise, banks are generally uninterested in funding my tech endeavors even if they have a pretty reasonable path to profitability.

"Slow startups" is a much better term than small businesses. They still intend to be big some day, but aren't rushing as fast to get there.

> The hostility is unnecessary.

I apologize for coming off as overly hostile. I'm mostly just frustrated with people muddling terminology, and you certainly don't deserve the blame for that.

roymurdockOP10y ago

I see your thesis - that "startup" implies a desire to be big some day. I'd assume that most small business owners intend to do the best they can and make their companies as successful as possible. But who can really know these things.

Maybe we can agree on "slow startups" as a good way to describe companies slogging through this new investment environment.

morgante10y ago

Yes, "slow startups" is definitely a good term.

In general, I don't think most small business owners have any goal or aspiration to "make their companies as successful as possible" if that means turning them into a huge corporation. Most of my relatives own small businesses and none of them aspire to grow huge. In fact, my mother specifically sold her stake in her original landscaping company when it was getting too big (at 30 employees) to open a new, smaller one.

If you look at surveys of small business owners, most of them go into it from a desire to have more flexibility or to be their own boss—not necessarily to create a large and financially rewarding company. In fact, exponential growth is frequently at odds with the primary goals of small business owners.

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