Most startups are expensive hobbies

Yesterday I read an article about Kraft splitsing into two companies. The article was written by a Dutch source of interesting 'entrepreneurial' news.

Kraft is a big corporation with popular snack food brands. Splitting the company logically results in two companies, of which one is new.

The Dutch new sources dubbed the new company 'the biggest startup in Europe'. A startup with over 300 office locations and all kinds of products available in supermarkets.

Are you kidding me? This is not a startup.

In the past couple of weeks I met all kind different people that are working on a project of their own. Most of the times they already have some users. But when asked about their next steps most of them talk about the next product release. They might even be looking for investment so they can spend more time working on their project.

That's not a startup, but an expensive hobby.

So we start calling nice product ideas a startup. Right next to that an existing corporation with 300 offices and existing brands is a startup as well. I really think something is off and we're completely losing what the term startup is about.

Don't get me wrong, I really love most app ideas I hear. We work on side projects as well. It's within the nature of an entrepreneur to come up with stuff and build something nice. But not every project should be called a new startup.

The best definition of what a startup is comes from Steve Blank: 'a startup is an organization formed to search for a repeatable and scalable business model.'

From now on when people ask what we do I completely remove the term 'startup' from my story. We are building new businesses. Building a business, to me, implies creating value for customers and making money to keep the lights on.

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Originally posted at: http://blog.firmhouse.com/most-startups-are-expensive-hobbies