photo credit: Spencer E Holtaway

My definition of a ‘startup’ was quite clear until recently when I saw Facebook being awarded the ‘Best Overall Startup of the Year’ by TechCrunch.  Yes all of us love Facebook and Zuckerberg (CEO of Facebook) but will you categorize Facebook as a Startup? The Crunchies awards have raised a debate and questions like what is a startup and when does a company stop being a startup have started gaining heat.

These are the exact questions that came into my mind as well – when does a startup 'stop being a startup' and becomes a business/company. What criteria’s define a startup?

Is it defined by:

1.    Time? – the number of years into existence
2.    Valuation? – post billion dollars you’re not a startup?
3.    Staff size? – the number of employees
4.    Profitability?
5.    Traffic? (probably number of views per month)

If we talk about Facebook; it has been into existence for five years, 500+ million dollar funded ‘company’ and a staff of around 1000 employees.(Source: Crunchbase)  I wouldn’t classify Facebook as a startup considering these points.

A startup starts with the intent to build X. Once they build X, they become a business that sustains and grows X (Facebook falls exactly in this category of sustaining and growing its product).

X may be a product, a service or may be a new approach to an existing problem. Once they move from the first stage of building to having to sustain it, it becomes a business (and doesn’t remain a startup).

Fore more information on this topic you can check:

http://bx.businessweek.com/facebook/view?url=http%3A%2F%2Frashmisinha.com%2F2010%2F01%2F09%2Fwhat-is-a-startup-is-facebook-still-one%2F

http://www.techcrunch.com/2009/01/10/congratulations-to-the-crunchies-winners-facebook-takes-top-prize-for-second-year/

Facebook is a revolution in the social networking and Web 2.0 world but it cannot be categorized as a startup (not anymore). TechCrunch could probably rename the award as ‘The Best Overall (Web/Software) Product’.