Definition of a startup, or Holivar of modern times

In the last couple of years in Russia and Ukraine, a fashion has definitely emerged for ratings and competitions of startups of all stripes, compiled by funds, market players or experts. The final lists of “Best Startups ( insert country, industry, conference )” are very different, they are united only by the fact that the audience’s attitude towards them is neutral at best, and more often negative.

A few examples from different places offhand:





Quite often, criticism, in my opinion, turns out to be unfounded, but many comments really have the right to life. First of all, this refers to whether one or another company, which often appears in the ratings, can be considered startups.

I must say that five years ago it was much easier with this: almost all technology startups were young, they worked mainly on enthusiasm, and news about attracting financing appeared a couple of times every six months. Now, many projects are working around, which we are already accustomed to treat as startups, but which at the same time are quite adult companies. Which does not prevent them from sometimes being on the top lines of ratings, provoking at best rays of bewilderment and disappointment from media readers and participants in relevant conferences.

Criteria


The traditional definition of a startup ("a new business," Merriam-Webster tells us ) is quite enough for explanatory dictionaries and encyclopedias, but clearly not enough for ratings and other specialized events.

Like at most modern conferences in the technology business industry, this year's IDCEE will host a start-up contest where projects will compete for various prizes and the main prize of € 15,000. Accordingly, a list of requirements has been compiled, which, in my opinion, is pretty good describes which companies may be called technology startups today.

General requirements


First of all, there are several simple and easy controlled requirements for projects:
  • Startup should work in the field of Internet technologies . This is an obvious criterion, since the conference is dedicated to everything related to the Internet, geeks, technology and venture business. Of course, there are many startups working in other industries, so this particular requirement is needed solely in order to maintain focus;
  • a startup should not be older than three years . In most cases, projects older than three years old either died or became serious companies. In any case, these are no longer startups;
  • investments attracted by a startup should not exceed € 3 million . Again, one can hardly call a startup a project in which several million have already been invested. In addition, if you have already received such money, why compete for € 15,000? You should have much more important things to do.

Product and Team Requirements


A few more requirements are less obvious and more difficult to evaluate. Some of them are more important for the competitive component, but the first three points, it seems to me, are most important in clarifying the traditional definition of a startup:

  • the project should offer an innovative product that solves a serious problem in a large or rapidly growing market. This is somewhat subjective, but still rather correct than not - for the same reason as the next paragraph;
  • a startup must have a clear business model . A project can be arbitrarily innovative, but we should not forget that a startup is primarily a business, and the goal of any business is to make money;
  • the team must have at least a demo version of the product . A good idea does not cost anything, and an idea is not a startup yet. A startup is something that will be built on the basis of this idea;
  • The project team must understand its market segment and relevant business models . Many investors - especially at the seed stage - invest money not only and not so much in an idea, but in a team and its knowledge and skills. The final version of the product may (and in most cases will) differ markedly from the original one, but the team will not go anywhere.


It would be interesting to hear opinions about IDCEE criteria from interested people: you can start thinking about the requirements for start-ups for the next year right now.