This is nonsense. In any economy, most companies don't make money when they're first starting. Even pizza places. That doesn't make them "projects" rather than companies.
Here's the message I take from this: get serious or go home.
After reading the first couple of lines I didn't want to like this article (I'm getting a little tired of everyone whining about how hard it will be -- it was always going to be hard), but a little later in I grooved on it.
Starting a startup isn't just about putting up a website; you've got to kick ass 8 days a week building a business, and yeah, it's going to be harder now so it's a good time to start taking what you're doing seriously or realize that you're just playing around.
Don't worry yourself with the semantics; this is extremely sound advice. VCs are starting to say roughly the same thing nowadays too, albeit in a way with somewhat less finality. It's a shame it took a huge economic hoo-ha for people to start using common sense again, though.
I don't really agree that a "project" is demeaning, if the person creating that project properly recognizes it as such. Some things are businesses, some aren't. I've worked on tons of "projects" in the past which had no real business potential yet were still very fun and rewarding.
Uhm.. What? Someone can't call themselves a startup when they take all the risk of actually, err you know, starting something up? Taking the risk, forgoing income and pursuing their passion?
I think Stan is just pointing out that a startup which is not making money should not be called a business. And when we consider a startup to be a "young" business, the author has a good point.
90% of the "startups" we see passing by here on HN, should be considered projects. And some of those projects might turn into a business (startup) some day...
A start-up which doesn't have any concrete and realistic plans for how they'll make money is not a business, granted, but there are plenty of ways to create a business that is solid and yet requires a development period before it starts turning a profit or even making any money.
A start-up which cannot make money should not be called a business. A start-up which has a clear plan for how they'll make money (e.g. by charging for an SaaS product) but hasn't finished building it yet can be called a business, and the creation of a formal business affords many protections that are useful to a business... and so a business should definitely be created to represent those kinds of start-ups.
Well, if you don't make money it's not a business, its a hobby in my opinion. I have hobbies that I put my time, effort and money into, but I certainly don't classify them as startups. Thousands do this for open source & freeware projects, it doesn't mean they are startups either.
I know it's not the popular opinion, but making money is important, and having a plan to make money & testing it before you launch is a critical part of a business. Perhaps it's one thing people will learn, that a project isn't a business until you have paying customers.
Getting bought may not be a viable business model anymore, if it ever was.
"a project isn't a business until you have paying customers"
..is not a popular opinion because it's false. I hate to go all cliche on you, but Google & Facebook are two examples that would, per your definition, not count as startups (or businesses) for the first few years they existed.
I reckon if you've quit your job and pursued whatever passion you have in order to try and make it a success, then you've earned calling it a startup.
I get your drift about needing to have a plan to make money though, it's probably something that will separate the wheat from the chaff in the coming years.
I think the point is more that starting up a traditional business involves much higher costs, effort and risks versus setting up some website or web-service, which pretty much any Joe Schmuck can do these days.
And I completely agree with him. I realize I might be pissing against the wind, with the "startup"-focus on hacker news and all, but lots of these so-called startups I see here, I would consider spare-time hobby projects, and even if they find a way to capitalize on them, I still wouldn't call it a full business.
If your business can be summarized as a server, located in some data-center somewhere, working out the stuff on its own, calling it a full fledged business is a bit over the top no matter how much time you spent writing the initial code.
OH MY GOD. Are you really gonna have to force me to list some of the largest cap NASDAQ companies that "can be summarized as a server, located in some data-center somewhere, working out the stuff on its own"
Really? I mean christ, I'm trying to boost my chances of getting YC funding here and you're forcing me to sound like a petulant teenager. Let's all get on the same page here.
