Startup: beyond age and size
The term “startup” is often used to describe any newly created company (we’ll talk about the timeframe later), but seemingly as a way to avoid the word “company”, which tends to carry… let’s say, somewhat negative connotations?
“A startup emerges to address a need that is already being served, but with the goal of outperforming current providers through a proposal that not only creates added value for the potential customer, but also manages to effectively capture that value.”
In this sense, a startup cannot afford to be “just another option” in the market. Its very reason for existing lies in solving a problem more efficiently or adding new layers of value compared to existing solutions—something I explored in detail in the Innovation Analysis: Back & Forth Methodology.
But there are two factors, not intrinsically tied to the solution, that always come into play:
- Age: refers to the time elapsed since its creation; measured directly in years or months since incorporation (date of founding, first revenue, or product launch).
- Size: describes its current scale; measured through headcount, annual revenue, user/customer base, or even capital raised.
When we talk about startups, we often fall into a very common trap: defining them almost exclusively by these two parameters—age and size. While they help provide context, they also generate a dangerous distortion.
Because at the end of the day, beyond the label and the narrative, a startup is still what it really is: a company—with all the classic functions of finance, marketing, sales, and operations—only governed by different parameters, the most important of which is scalability.
“Just like human beings are born with all our vital organs, a startup begins its life with all the functional areas it needs to operate. What makes the difference is not their existence, but the level of development and maturity of those areas—a clear parallel between both organisms.”
What experts say
Let’s turn to the more or less “official” literature to review some definitions…
According to BBVA, “a startup is a recently created company, with great growth potential, that leverages technology and communication tools.”
The Spanish Chamber of Commerce defines startups as “newly created companies… with high growth prospects… instead of waiting for profits, they go to market quickly to achieve growth and funding.”
Steve Blank, American author and true serial entrepreneur, adds a crucial distinction: “A startup is a temporary organization designed to search for a business model that is repeatable and scalable. A company is a permanent organization designed to execute a business model that is repeatable and scalable.”
His colleague Eric Ries, co-creator of the Lean Startup methodology, defines it as: “A human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
Innovation, dynamism, agility, and speed are their hallmarks—but so are high risk and a provisional nature.
The goal: to stop being a startup as soon as possible
This is where the usual narrative needs adjusting: the ultimate goal of any startup should be to stop being one as soon as possible. We assume, therefore, that the structure it starts with can only succeed for a limited period of time.
It’s not “just” about moving from losses to profitability. It also means:
- Consolidating a profitable and scalable business model.
- Evolving from an improvised setup into a mature, professional organization with clear processes across every area.
- Shifting the mindset: from growth at any cost to a balance of scalability + sustained profitability.
- Recognizing that the team that drove the startup’s early growth may not be the same one capable of leading it to organizational maturity.
The time factor
Five years in—can it still be considered a startup? Yes and no. It depends on many factors, but we shouldn’t forget that after five years the business model—what problem we solve, for whom and how, and the way we generate and capture value—should already be consolidated.
Can we pivot? Of course. But every late pivot should be accompanied by a rigorous analysis of why it became necessary: was it a misread of the market? poor execution? or simply a drastic shift in the competitive environment? I’ve come across all of these at different points in time.
It’s not just about finance, it’s about culture
Outgrowing the startup stage is much more than reaching break-even. It’s a cultural shift: moving from operating on urgencies to working with strategic vision; from improvisation to systematization; from relying on individual talent to building processes and structures that can sustain long-term growth.
But let’s not confuse acting with urgency with being impulsive. The latter, often disguised as “energy,” can actually hide a clear weakness in execution.
The startup stage is both vital and fragile. The real art lies in harnessing its energy, agility, and innovation while knowing when to layer on that necessary “professionalization” that will turn it into a solid, profitable, and scalable company.
Examples that prove the point
Typeform, born in Barcelona, understood early on that its future depended on moving beyond the startup phase. It professionalized its management, strengthened internal processes, and consolidated a recurring revenue model. The result: sustained international expansion without losing its core product essence.
On the opposite end, Zirtual, a U.S.-based virtual assistant startup, grew fast but never adapted its structure to the demands of a mature company. When cash-flow problems hit, they lacked the maturity and processes to respond in time—leading to an overnight shutdown.
Startup = Company?
As I mentioned earlier, Steve Blank sees a startup as a temporary organization, which means it must inevitably undergo a metamorphosis into something else. Under his view, that “something” should be a company: an organization focused on executing a business model that is validated, scalable, and profitable.
My only disagreement is that, even before this metamorphosis, a startup must already contain the essential structures and processes of a company—because without them, even validating the business model is unattainable.
