There Are Startups, and There Are Re-Startups

There was a period during which The Junto Institute, like all new ventures, was a startup. But today, I consider it a re-startup.

As someone who has been in the entrepreneurship sector for nearly 25 years, I've seen and heard many definitions of a startup company. To this day, I believe that Steve Blank's is the best and most accurate one: "an organization formed to search for a repeatable and scalable business model."

In other words, a startup is no longer a startup once it finds a business model that works. Based on this definition, it nothing to do with how old the company is, how much revenue it's generating, how many employees it has, or any other measurable indicator. And, in all likelihood, it stops becoming a startup long before many observers stop calling it a startup.

Conversely, a company can remain a startup for an indefinite period of time. A necessity for the repeatable business model is "product-market fit," which is when there are enough customers who will pay for a company's product to allow it to stay in business. When companies struggle with this, they often have to rely on outside funding and/or require founders to take far less than market salaries, as with many bootstrapped firms.

In addition, companies may continue to search for a business model due to environmental forces such as competition, economic cycles, investor pressures, personnel changes, and other circumstances that cause them to change direction or move slower than desired.

I believed this definition whole-heartedly when I was a professor teaching entrepreneurship courses based on Steve Blank's customer development process and lean startup methodology. By that point, I had worked with or observed hundreds of startups, only a few of which had found a repeatable and scalable model. Today, I believe it even more because the search for a model continues to describe The Junto Institute...but in a very different way.

For our first five years, we were on a fairly straight line of searching for that repeatable and scalable business model. Our core "product" remained the same, we did find product-market fit, and we launched an effort to replicate the business model and test it for scalability (expanding to a second market, Los Angeles). The early results were promising and, based on Blank's definition, one could have said that we were in process of no longer being considered a startup.

But then several environmental forces kicked in to cause us to re-evaluate our ability to execute the business model. After much thought, we decided to change direction with the model itself in order to make replication and scalability easier. Along the way, I actually went back to the business model canvas, an essential tool in customer development and lean startup methodology, and updated a number of items.

When I "zoomed out" and took a look at the revised business model on paper, much still remained the same. So were we indeed still a startup? Were we no longer a startup? And did it even matter?

Ultimately, I decided that we are now a re-startup: an organization re-formed to search for a repeatable and scalable business model, and to prove its ability to execute that model (future articles will detail what that means in terms of replication, scalability, and team).

So with all due respect to Steve Blank, I believe that his definition could use an addendum: that a startup is not just an organization searching for a business model but one that has yet to demonstrate the ability to execute it.