A startup isn’t a startup when it starts.
At least that’s one line of thinking.
Dylan Bathurst, one of three co-founders of Rumgr, a free iPhone app that helps people sell their stuff, says for a company to be considered a startup, rapid growth has to be built into its business model.
“It’s a company that’s built to grow quickly and to a very large scale,” he said. “Whereas a small business would be like a pizza shop, which is definitely ‘starting up’ something, but it’s not really considered a startup.”
Rumgr won a Startup Weekend competition in 2011 and consequently received funding from Tony Hsieh’s Vegas Tech Fund. This year, Startup Weekend began Friday in Las Vegas at the InNEVation Center and concludes Sunday with an awards presentation.
Although the company has expanded to serve Los Angeles, Bathurst says he considers Rumgr a small business with startup aspirations.
He plans to add a payment system to Rumgr this year to give it an advantage over competition.
Bathurst will know Rumgr has arrived not when it reaches a certain number of users or hires a certain number of employees, but when he and his partners have figured out “an engine for growth” — a model that attracts new business at a consistent rate.
Startups are not necessarily tech-based either, Bathurst said.
Starbucks is a prime example of a small business that grew into an international brand, one that’s easy to duplicate and serves the world market.
Bathurst said his ideas about the definition of “startup” came largely from Paul Graham, co-founder of the tech-accelerator fund Y Combinator.
Bathurst calls Graham the “grandfather of startups,” and says that when he shares a stance on an issue, the tech community takes note.
Graham is traveling through October and was not available for comment, but an article on his website called “Startup = Growth” says this:
“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.”
The most important indicator of success, he writes, is growth rate — the ratio of new customers to existing ones.
Graham says startups must fulfill two special requirements: “make something lots of people want, and reach and serve all those people.”
While small businesses tend to do well with the first criteria, the second is more difficult to achieve. It’s the reason startups are often tech startups — the Internet allows for participation in a global market.
ANOTHER VIEW OF STARTUPS
Adam Kramer, who leads the entrepreneurship and young professionals branch of the Las Vegas Metro Chamber of Commerce, defines a startup as “an innovative company that’s trying to fix an inefficiency or a problem.”
Kramer heads the chamber’s JumpStart Vegas program, which specifically aims to draw startups to Las Vegas.
Kramer said startups can be startups from conception. They just have to serve more than a local market, and must have the potential to be a multimillion-dollar company.
Kramer said that when a startup forms, it’s still figuring out what its product is, who its customers are and how to make money.
“The companies that are startups strive to become real businesses,” he said.
He points to Facebook and Google as prime examples.
“They knew they wanted to innovate, but they didn’t know what ultimate product would be,” Kramer said.
And now, they are undoubtedly real businesses.
B.C. LeDoux, president of The Glenn Group marketing and public relations firm, defines a startup as “a company that’s in the first stages of its life; a company that’s bootstrapping it.”
Throughout August, The Glenn Group is accepting applications for “Dollar Office Space,” a “whimsical application process” that offers startups a chance to lease a 1,000-square-foot office space for $1 per month for a year.
To apply, the agency is asking companies to submit 15-second videos on Instagram telling why they should win.
LeDoux says he’s looking for a company, local or otherwise, tech or lifestyle, to participate in a collective environment in their downtown headquarters at Holsum Lofts.
The company will choose a winner based on vision, mission and sustainability, as well as how much the company believes in itself and how much Glenn Group believes in the company.
LeDoux says “any company that is starting out fresh is truly a startup,” but notes that there are exceptions.
“To us it’s a bigger thing. It’s someone who has a big vision with guts to go with it,” LeDoux said.
Contact Review-Journal writer Kristy Totten@KTotten@Reviewjournal.com