Because whether they like it or not, companies do outgrow the term.
It’s hard to define a startup, though many have tried. Yet, most of us still tend to recognize startups when we come across them. (Or, at the very least, we recognize companies who retain that “startup” quality.) Not convinced? Just tune in to HBO, which has created an entire successful TV show around the topic, and we all get the humor.
Though the definition is hard to nail down, there are telltale signs you’re running a startup — and signs you’ve transcended that designation.
Here are a few indications your company is moving on from the recognized (if ill-defined) stage of “startup status.”
1. You’re acquiring other startups.
There was once a time when Uber and Pinterest, both six years old, were squarely “startup.” Today, they’re acquiring other startups to add to their ever-evolving growth. If your well-established company has existed long enough to acquire other companies deemed “startups,” you’ve likely progressed past the term.
2. You’ve made it through the high-risk stage.
Investopedia refers to a “risk” as an opportunity that comes with “the possibility of losing some or all of the original investment.” While risk-taking is an essential means to growth in entrepreneurship, it’s a game entrepreneurs play heavily in the nascent stages of business, as opposed to in the more mature stages. When your company no longer seeks relatively large investment dollars from venture capital firms and you’re no longer sacrificing your personal capital to stay afloat, you’ve probably outgrown the startup designation.
3. You have more than 30 (or so) employees.
If your workforce has doubled or tripled since its inception, you’re probably not a startup anymore. Ditto if you have multiple satellite offices, bureaus or company headquarters. Instagram arguably lost its startup status in 2012, when Facebook acquired its company of 13 employees, subsequently growing its workforce exponentially.
4. You can afford to pay your employees (and yourself) well.
Reserves are in the bank, your employees have benefits, and you are profitable. Because your business brings home a pretty hefty penny to share with every employee, turnover has likely slowed. Keeping your personal and professional finances separate is a habit you’ve practiced for a few years. You know what you’re worth, and you pay yourself that amount instead of cheaping out to save money to line another pocket of the business.
5. Your mission is rock solid.
A mission statement is defined as “a written declaration of an organization’s core purpose and focus that normally remains unchanged over time.” If you’ve made it out of the startup stage, your mission is likely rock solid at this point, and you’ve stopped using terms such as “evolution” or “in flux” to describe it. Heck, maybe you’ve painted it on your wall. What’s more, now that you’ve established such a clear mission, the work your company puts forward is a direct reflection of that mission statement.
6. You’ve evolved beyond cold calling.
You’re receiving more leads (and more subsequent business) from referrals, especially movers and shakers in the industry who have existing relationships with your company’s brand. New client relationships are likely also being established less from cold calls and more from organic inquiries. I receive several calls weekly from individuals looking to hire our marketing firm due to the reputation our current work has built in the marketplace. I also receive calls from companies who have asked for a referral from one of our current trusted clients. If you’re at this stage, you’re likely coaching your business development team to focus on nurturing the lead list you already have, rather than adding more names to it.
7. Your brand speaks for itself.
You no longer need to sell your company by presenting your book of clients to prospects. The brands you’ve previously worked with are no longer as important as your company’s own brand, which has gained recognition of its own in the marketplace. Consider Ogilvy & Mather, an established marketing and communications agency with 450 offices and in 163 cities worldwide. They don’t need to sell prospects on who they’ve worked with over the 60-plus years they’ve been in business. Instead, famous brands recognize their name and want to partner with them instead.
– Mark Fitzpatrick is the founder and CEO of RUHM Luxury Marketing.