• Contact Us
  • Privacy Policy
Monday, January 18, 2021
WorldGots.com
  • Home
  • World News
  • Politics
  • Business
  • Technology
  • Sports
  • Health
  • Entertainment
    • Lifestyle
  • Worldgots Ads
No Result
View All Result
  • Home
  • World News
  • Politics
  • Business
  • Technology
  • Sports
  • Health
  • Entertainment
    • Lifestyle
  • Worldgots Ads
No Result
View All Result
WorldGots.com
No Result
View All Result
Home Lifestyle

Malaysian Entrepreneurs Discuss When A Startup Stops Being A Startup

January 3, 2021
in Lifestyle
6 min read
Malaysian Entrepreneurs Discuss When A Startup Stops Being A Startup
0
SHARES
3
VIEWS
ShareShareShareShareShareShare

Not too long ago, I ran into this thread in the Entrepreneurs and Startups in Malaysia Facebook group about the question, “When do startups stop being called startups?”

I asked my team what they thought about this, and we all agreed that there didn’t seem to be a universal consensus on the criteria yet. 

From what we’ve seen, companies as old as 5 years old or even companies as big as Grab are still referred to as startups.

How then does a company graduate from being called a startup? Well, take a look at what Malaysian entrepreneurs have to say about this topic.

When It Hits Maturity

The most liked answer was from a commenter who said that companies graduate from being called startups when they corporatise. 

To quote their comment, “For example, a boy is called a man when he is mature. Maturity is an internal thing.”

“To corporatise, the business must have found a repeatable and scalable business to afford corporatisation. Corporatised means that the company is run by systems and processes, and no longer by hustling and experience alone,” they shared.

They defined maturity in several ways, whether it meant achieving a stable, positive cash-flow, having no critical need for seed funds, or even being ready to burn the extra cash for growth.

A commenter who explained their stance on a startup being a “pre-mature baby”

It seemed like many others found their comment agreeable. Another commenter said, “There are actually 5 stages of a company’s life. That is: Ideation, Startup, Growth, Expansion and Maturity.”  

“To know ideally when you have exited your startup phase is when you start witnessing ‘revenue-wise’ you have recurring incomes that will help you cover your business expenses,” they added.

A commenter thinks that not critically going for seed funds is how a company graduates from being a startup

Another commenter suggested that companies which haven’t generated enough net cash-flow to sustain themselves yet or still need investors money to expand will still be considered a startup.

Some Prefer To Set The Bar Themselves

Among this pool of suggestions, there were also entrepreneurs who prefer to set the terms of graduation for themselves instead of following the status quo.

An entrepreneur who runs 4 companies shared that the company must at least be consistent in generating half a million in revenue for at least 3 years consecutively.

“At the same time must have all the business system from marketing, finance, HR, operations, customer service all in place,” they added.

Speaking of that 3-year timeline, there were a couple of commenters who shared a similar sentiment.

  • A commenter who thinks that a company has problems if their earnings are still negative in the 3rd year
  • A commenter who thinks if you can’t make it in 3 years, you won’t make it in 5 years

Another commenter also gave some justification for their definition. “We’ve asked Cradle and MDEC this question before. In fact, they don’t offer grants for that project if it’s already been operating for more than 3 years. But there are ways to negotiate still.”

However, some startups may find that difficult to achieve while opting to persevere, hence any smaller goals like these are valid too, according to this commenter:

A commenter who believes that even a small goal to graduate like your 10th customer is valid

Some commenters also shared that it might be just about the mindset behind it, when a founder or leader feels that they’ve already grown.

A commenter who believes that it is about how the founder feels

However, a commenter dove deeper into that definition of “mindset”, and suggested the difference between the mindset for a startup VS a business.

“I think the difference between startup and a business is that startup focuses on valuation, while business focuses on profit. You can be a business and not be profitable, so it’s a mentality thing,” they shared.

“But startups need to have a good valuation for funding, not being profitable. Because the moment they are profitable, that’s when their valuation drop. Weird I know, but it’s true.”

What Do Other Biz-Driven Platforms Have To Say?

In this article by Tech In Asia, they suggested that small businesses typically focus on making a profit as soon as practical, whereas startups explore a new business model or aspect of a market with potential for much greater growth.

Hence, oftentimes the goal of small businesses is to provide a livelihood for the business owner. On the other hand, a startup is a riskier experiment that looks to create new markets or disrupt existing ones.

However, the graduation from the label can be due to several factors like listing on a stock market with an IPO, product-market fit, a shift in mentality, etc.

This article by Business Insider also wrote that although a company is a startup until it finds product-market fit and has begun to scale, it’s all up to the company however they want to name themselves, according to an associate at a VC firm.

-//-

From this thread of discussion, it’s safe to say some Malaysian entrepreneurs play by the norm of graduating from the startup label whereas some choose to play by their own rules.

As for whether or not this label brings any benefits is still up for debate. The Companies Act in Malaysia that became a law in 2016 did make it easier to launch a business at low cost with less paperwork though.

According to QuickBooks, some of these benefits are:

  • An individual can incorporate a business and still enjoy the benefits of limited personal liability that a corporation offers.
  • Lower operating costs (in the past, small corporations had to involve outside entities, including auditors at cost, to run their businesses).
  • Startup owners and teams can focus their energy creating products and services (in previous years, business owners had to focus on tedious matters such as having general meetings, shareholder meetings, filing memorandums, drafting resolutions).

Ultimately, it seems clear that there’s no right or wrong as to how long a business chooses to remain being called a startup for its own reasons.

  • You can read more opinion pieces we’ve written about here.
  • You can read more startups we’ve written about here.

Featured Image Credit: Carpit pitching at SITEC SAP 2019

Credit: Source link

ADVERTISEMENT
Previous Post

U.S. May Cut Some Vaccine Doses In Half To Expedite Rollout

Next Post

Online Personal Stylist Service & Fashion Style Box Delivery

Related Posts

Malaysians Fixing Potholes For Road Safety
Lifestyle

Malaysians Fixing Potholes For Road Safety

January 18, 2021
Branded Paper Bags Are Being Sold Online In Malaysia At High Prices
Lifestyle

Branded Paper Bags Are Being Sold Online In Malaysia At High Prices

January 18, 2021
Malaysian POS System For The Beauty & Medical Industries
Lifestyle

Malaysian POS System For The Beauty & Medical Industries

January 15, 2021
Sabahan Sisters Paint On Old CDs And Sell Them
Lifestyle

Sabahan Sisters Paint On Old CDs And Sell Them

January 14, 2021
Load More
Next Post
Online Personal Stylist Service & Fashion Style Box Delivery

Online Personal Stylist Service & Fashion Style Box Delivery

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Trending
  • Comments
  • Latest
Lamar Jackson injury update: Concussion ends Ravens QB’s playoff game vs. Bills

Lamar Jackson injury update: Concussion ends Ravens QB’s playoff game vs. Bills

January 17, 2021
Will Smith & Margot Robbie Cheating Rumors Resurface After Jada Pinkett Smith Affair Admission!

Will Smith & Margot Robbie Cheating Rumors Resurface After Jada Pinkett Smith Affair Admission!

July 11, 2020
Divisional Round Sunday FanDuel Picks: NFL DFS lineup advice for daily fantasy football playoff tournaments

Divisional Round Sunday FanDuel Picks: NFL DFS lineup advice for daily fantasy football playoff tournaments

January 15, 2021
Actor Justice Smith Comes Out As ‘Black Queer Man’ In Powerful Black Lives Matter Post On LBGT Inclusivity

Actor Justice Smith Comes Out As ‘Black Queer Man’ In Powerful Black Lives Matter Post On LBGT Inclusivity

June 6, 2020
Public health officials warn about slow vaccine rollout as coronavirus variants multiply

Public health officials warn about slow vaccine rollout as coronavirus variants multiply

January 18, 2021
Malaysians Fixing Potholes For Road Safety

Malaysians Fixing Potholes For Road Safety

January 18, 2021
Goama lets developers integrate a social gaming platform into their apps – TechCrunch

Goama lets developers integrate a social gaming platform into their apps – TechCrunch

January 18, 2021
Trump And Biden’s Monday Schedules Are Very, Very Different

Trump And Biden’s Monday Schedules Are Very, Very Different

January 18, 2021

Recent News

Public health officials warn about slow vaccine rollout as coronavirus variants multiply

Public health officials warn about slow vaccine rollout as coronavirus variants multiply

January 18, 2021
Malaysians Fixing Potholes For Road Safety

Malaysians Fixing Potholes For Road Safety

January 18, 2021
Goama lets developers integrate a social gaming platform into their apps – TechCrunch

Goama lets developers integrate a social gaming platform into their apps – TechCrunch

January 18, 2021
Trump And Biden’s Monday Schedules Are Very, Very Different

Trump And Biden’s Monday Schedules Are Very, Very Different

January 18, 2021
WorldGots.com

This is an online news portal that aims to share latest trendy news around US News, World News, Business, Tech, Sports, Entertainment & Lifestyle. Feel free to get in touch with us!

Recent News

Public health officials warn about slow vaccine rollout as coronavirus variants multiply

Public health officials warn about slow vaccine rollout as coronavirus variants multiply

January 18, 2021
Malaysians Fixing Potholes For Road Safety

Malaysians Fixing Potholes For Road Safety

January 18, 2021

Subscribe Now

Loading
  • Contact Us
  • Privacy Policy

© 2020 worldgots.com - All rights reserved!

No Result
View All Result
  • Home
  • World News
  • Politics
  • Business
  • Technology
  • Sports
  • Health
  • Entertainment
    • Lifestyle
  • Worldgots Ads
  • en English
    ar Arabicen Englishfr Frenches Spanish

© 2020 worldgots.com - All rights reserved!

en English
ar Arabicen Englishfr Frenches Spanish