What is a startup really?

Does a startup inside a big company even make sense?

Sometimes I can come in too strong. For example, last week I tried to argue against a statement someone tweeted about startups. He suggested that if any team says “we’re a startup inside a big company”, they almost always fail. I disagree.

Yes, that team could certainly fail. About 90% of startups also fail eventually. I understand the sentiment though. I have spent time in both startups and in big companies and teams that think they are a startup in a big company often fail. The biggest reason is the crushing baggage of being tied to a massive organization.

The examples often cited are the acquisition stories of plucky startups being swooped up by large enterprises. When Tumblr was acquired by Yahoo, most of the friends I knew there were concerned whether Tumblr would be able to keep their culture. After a year, the few original Tumblr folks still left told me bluntly that there was no Tumblr anymore. The name was there, but the culture and soul of Tumblr had disappeared.

While some startups manage to eke out a year and change of independence from their corporate masters, eventually the startup gets assimilated. Key people start to leave, new policies from the parent take hold, processes and approvals get tacked on to any initiative…