What Is The Tipping Point? Going From "Side Project" To "Startup"

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By Michal Tsur (Co-Founder & President, Kaltura) and Leah Belsky (VP of Strategy, Kaltura)  

As the entrepreneurship frenzy in the US grows it seems that more and more people are walking around talking about their “startup.” Sometimes they refer to a full time venture-backed endeavor. And sometimes it’s just a project “on the side.”

What turns a group of people into a “startup”? Do we call a group of people a startup:

  • When they have an idea and start to pursue it?
  • When they make a commitment to one to the other to find an idea and pursue it jointly?
  • When they form a company?
  • When they start building something or invest capital?

We might also ask – when does a startup outgrow the definition of “startup” and become an actual “company”? Does the startup threshold have to do with:

  • Company size (number of employees)
  • Number of customers
  • Company maturity
  • Ratio of R&D to the rest of company
  • Brand awareness
  • Type of investors who are investing (for example, private equity versus VCs)
  • Profitability

Think of many of the hot tech companies today – Jive, Yammer, Twitter, Yume, Palantir, etc. Many have large customer bases and big staffs. Few are profitable.

What do you think? Should they be considered startups?

This post was originally posted at Open Technology.

About the guest co-blogger: Michal Tsur is Co-Founder and President of Kaltura, the developer of the leading open source video platform, powering video and media management, publishing and monetization for leading media companies, universities and enterprises. Prior to Kaltura, Michal co-founded Cyota, a leading anti-fraud and security company, whose products are used by thousands of financial institutions world-wide (acquired by RSA Security). Follow her on Twitter at @michts. About the guest co-blogger: Leah Belsky is Vice President of Strategic Development and Associate General Counsel at Kaltura, a "TechCrunch Top 40" and Intel Capital funded company launching the world’s first open source media platform – the "Redhat of Video" focused on new media, education, and cultivation of entrepreneurial communities. Her work focuses on open and collaborative systems, international development, and the future of education. Follow her on Twitter at @leahbel.