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…or are you just working on a project?

The idea of a “startup” has really moved into the mainstream in the past few years. The tech bubble added a level of mysticism and ownership to the term, and it has continued to move beyond an industry classification. The word now comes packaged with its own stereotypes, and it seems like everyone with a little coding knowledge, a garage, and a pair of flip flops is bootstrapping their very own startup.

But how do you know if you are truly working on a startup, and not a side project? I think that we need to trim some fat off of all the hype out there and redefine the term back to something meaningful.

First of all, let’s not undervalue the strengths of a “project.” This is not a derogatory term- it just happens to entail a different set of circumstances regarding the work that is being done.

True innovation usually stems from focused projects that are meant to excel in a focused area, and more complex solutions depend on stringing together multiple ideas. Projects can quickly evolve into startups, and startups can definitely shift to projects.

I think there are three areas that are important to consider when trying to classify something as a startup: Solution, Revenue Model, and Technology/Process.

1. The solution is the core result of your product or service. What problem are you solving? Does your product have a clear purpose and fill a need for some entity?
2. A viable revenue model is mostly self explanatory. Do you have a justifiable and realistic way to make money? It can be somewhat fuzzy, and occur later in the time line, but it’s a critical piece to consider.
3. Technology/Process is the internal functionality that your product or service utilizes. This represents a different way of solving a problem- either with technological innovation, or with an improved way of getting things done.

Of course, other factors will definitely contribute to the definition as well- funding, time dedication, personal priority- but these are more relevant to the environment of the work that is being done, rather than describing the work itself.

Ideally, a true startup would be strong in all three categories mentioned above. However, with the natural evolution of ideas and creativity, I think that it is possible to call something a startup if it is strong in at least two of these areas. The third will likely emerge anyway if the other two are well represented.

Take a minute to evaluate your favorite websites on each of these three areas. Then think about how your current endeavor stacks up. So what are you working on?

[Photo credit: hanabi]

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