I had a friend that founded a startup, called his company a “startup” for several years while not making any money (and living out of the funds investors put in his company). I saw him flying here and there, having a life that seemed amazing, always meeting the most interesting people, etc.
I been staring my own businesses since I was a teenager. Most of them self funded: the income of the first job would help grow, and so on. In the past 25 years I always had, in average, about 30 employees. I never understood why I could not call a new business of mine a “startup”. In short, In a more polite way, what you wrote is what I been thinking about startups until 2014. Then something did happen.
By mere coincidence, during lunch break at a conference where I went to talk in a panel to present a white paper of an innovative idea I had, I met a guy that asked me to send my white paper at a particular email address. I did so without thinking much of it. In the meanwhile for reasons I will not explain here, I was closing down almost all the businesses I been running in the previous 7 to 10 years. I was finally disengaged from my companies, something did happen only one other time in my life.
Turns out that the white paper I sent was for a startup accelerator selection. A couple of Skype calls later and we end up at the final selections. Seems that out of 300 applicants, we managed (without intent) to be one of the top 10 ideas. My “startup” experience begun in April 2015. My mind got blown pretty much every single day for what I been offered, taught, helped with, and so on. I did start understand the difference between a startup, and a “pure and simple business”. There is an ocean in between!
Let me give a few examples of what a normal business has no access to (while a startup in an accelerator do):
1) the freebies worth thousands of dollars from key large companies,
2) the pro-bono mentorships from amazing high level people,
3) access to time of CEOs of fortune 500 companies,
4) business opportunities a normal company can dream of,
5) access to government grants,
6) free office space and free access to co-working places,
7) worldwide networking with startups in other accelerators,
8) free access to trade shows, fairs, expos, etc,
9) the opportunity to pitch in front of huge quantities of investors.
(the list can go on and on, but I guess you have an idea).
Knowing what a startup gets, and reading your piece, made me think your post was more a rant for having not been accepted in an accelerator, but then I did recall my thought about startups before I really knew what an amazing opportunity their ecosystem has. Mind blowing, really empowering.
I am 41, and I wish I did this experience 20 years ago. I would have made so much less mistakes (that I had no idea were mistakes until I learned about that recently). No school, university, friends, parent, rich uncle… can offer the set of opportunities to put together a business and make it successful as a startup accelerator or campus can.
So, while I share several of your considerations, and I recognise some of the silly attitudes you describe (expecting donations to pay the rent), in the overall a startup is NOT a normal business. Don’t get me wrong: hard work must be done, full devotion is necessary, the capacity to remain humble is key, be ready to change everything overnight is essential, and 1 out of 10 will succeed. It take brave, intelligent, capable, rational, balanced, and possibly wealthy people, that get along in team, that are ok to work 20h per day, and a great idea that solves a large market’s problem, to get a successful startup. But there are way more chances a startup will succeed than a normal business, if not for else, just for all the support that is available.