The Difference Between a Startup and a Startup

No, that’s not a typo. I’m trying to make a point here. Irreverent Freelancer Kathy had a great post yesterday about her latest encounter with a startup, which you can read here. Word Vixen responded with this: “For some reason, people seem to think that launching a website, starting a sole proprietorship, or a side business is the same as “start up”. It’s not the same thing…” How right you are.

The definition of a startup, according to BusinessDictionary.com, is this: “Early stage in the life cycle of an enterprise where the entrepreneur moves from the idea stage to securing financing, laying down the basis structure of the business, and initiating operations or trading.” Note the “secure financing” part. That part right there is what all startups, even the pseudo-startups, must determine long before they, well, start up. They determine early what kind of cash they’ll need for the entire operation, not just the fax machines and computers. And that’s where most startups make their first mistake – not factoring in the money needed for adequate vendor services. It’s why we writers often get projects from startups and then wrangle with them for months to secure payment. These are legitimate startups, but they have legitimate shortages of cash.

So what’s the difference between this and the other startups, you ask? Don’t they both suffer cash issues? It’s this – someone sitting at the computer one day reads an article or a blog post about how to make tons of money right there from that chair. It could be acting as a value-added reseller, selling widgets made by others, selling articles written by others, or plopping tons of advertising on a weblog and then paying others to write it. Whatever the scheme, this person thinks “Hey! Easy money!” The website goes up, the ads are in place, and the person now has to find cheap labor in order to fill that space. Guess where they’re going? Right to your door, hat in hand, with the same old same old – “This is a labor of love for us….since we’re a startup, we can’t pay much at the moment….once the site takes off, the right person can make scads of money….” Please. The site, which we’ve not heard of until today, has the same chance a snowball does in Hades. It may sit there for a while and be a great little blip on the radar, but unless there is some serious financial backing or a new and innovative way to market on a shoestring budget, it’s just going to sit there.

That’s where we come in. We answer ads, taking great care to craft an enticing query. We send samples. Then comes those three little words Kathy mentioned: “We’re a startup.” And? What’s that to me? I’m a full-fledged professional. As such, I expect professional wages. What I don’t expect, what I won’t tolerate, is someone making excuses for not budgeting for my services. To that I say next!

It’s why I back off the minute I hear the word “startup.” The pseudo-startup has a business model that excludes fairness to vendors. Don’t believe me? I’ll quote an excerpt of a speech given by essayist, programmer, and programming language designer Paul Graham in which he explains the premise of startups to the Harvard Computer Society: “You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.”

That’s why you’re not getting paid what you’re worth. Pseudo-startups interpret this very basic business model to mean you shouldn’t get paid. They fail to see that part of the necessary costs of running a successful business includes paying appropriately for services rendered.