Here I am writing about startup life every week from my startup life bubble and have completely forgotten that not all of you are in this crazy world with me! Thank you so much to my lovely friend Jane for asking, "Umm...what exactly is a startup?" She sweetly directed me to write this blog post for all of my lovely readers who are here for so many reasons and not just startup life stuff.
So, what is a startup? I am kind of nervous about writing about this because when I wrote about living in a startup bubble there were all sorts of rumblings about why is a startup any different to any other business and also about the incorrect use of bubble in the startup world. But I'm hoping that those people won't start shouting and accept that I am the startup wife, not the startup guy! This is how I see it from home, not from the studio.
Paul Graham writes that "a startup is a company that is designed to grow fast." His article is really interesting and perhaps one I should forward to my parents, Stef's parents and a whole host of friends who don't completely get this whole startup thing.
A startup is a new company. The startups that Stef works in are tech startups. He works in Shoreditch right next to Old Street roundabout, known as Silicon Roundabout because of all the startups in the area. A startup will be funded somehow to enable it to start and this is very often with VC funding. This funding is called a runway because it enables the startup to take off. The length of the runway is determined by how much cash the startup has and how high the startup's burn rate is. That is, how much the startup needs to spend each month to keep going. The runway and the burn-rate are things that come up in conversation a lot in our house!
A startup needs to have a new idea. In the tech world it's likely that there will be other startups with similar ideas, so the startup needs to grow fast enough but solidly enough to mark its place in the market and to outperform competitors. However, often this idea forms as the startup grows. The startup begins with just an idea. It essentially begins with nothing and has to make it work along the way. The metaphor of "jumping out of a plane and building the parachute on the way down" is often used to describe a startup. Startups certainly take guts.
I think that a lot of people we know think that Stef keeps opening new businesses, new companies, and then closing them and moving on to the next thing. On one hand that is true. However, on the other hand there is more to it than that. Startups have a really high fail rate. Perhaps all businesses do (so please don't shout!) but I know that living the startup life means that I've had to get used to this high fail rate. I've had to understand that a lot of the time the startup won't work and it's better to kill it and start another one than to try and make it work.
Like all businesses, startups come with financial risk. Very often (always?) you work for less than you would in an established company with the idea that when the startup grows into a big business that you will be financially rewarded. You may put your own money into them and if/when the startup fails you won't see any return.
Startups are hard. Really hard. They are stressful. They can often require working really long hours because of all these things I have talked about. They are incredibly risky and they are very tricky to balance with family life.
But, they are amazing and exciting too. To watch an idea form, a team built, money raised and a product developed is wonderful. To see and share in the belief, drive and passion is very special. And the future is always exciting.
This is a startup from a startup wife's perspective. I hope it explains it a little bit more! If you are still stumped then think about the things that you use every day; Twitter, Instagram, Facebook, Google... these all began as startups. I hope one day that I will get to add one of Stef's startups to a list like that and people will say, "ah yes, I get you now!"