A question for entrepreneurs: When does a start-up become a grown-up company?

At what point do you stop being a start-up? Whoa, a controversial question, if ever there was one. But the question needs to be asked because every start-up likes to be given kid glove treatment forever and ever.

The entrepreneur is pretty much like the proud parents in whose mind the progeny never grows up enough to do wrong of any kind! And why do they do that? Self-denial. The day I acknowledge as a parent that my child has grown into a mature adult I will have to admit to all his acts of omission and commission. I can no longer say, bachha hai, he knows no better.

There is a lovely Agatha Christie story where a girl of ten pushes her aunt off the cliff in a well-calculated, reasoned manner and when asked by another aunt why she did it, she said, because she deserved it. But when the cops asked her she put on an innocent face and said, I’m a child, how was I expected to know she will die if she falls from a cliff!

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Hiding flaws
Are you getting the drift of what I’m saying? The entrepreneur likes his company to remain a start-up simply so he can use it as a band-aid to hide dirty sores. Why are you paying so low? Oh, because we are a start-up. Why is the office such a pigsty? Because we are a start-up. Why don’t we have any processes for anything? Duh, because we are a start-up! One day when we grow up things will change for the better, is the not-so-subtle aspirational message here. Now my question is, when is that one day?

Is it when you have your first 25 paying customers? Is it when your team size crosses 50? Is it when you have been in the market for two years? Is it when you make profit? Is it when you get funded? Is it when you have multiple offices? Is it when you first advertise on TV? Is it when your company is featured on CNBC’s Young Turk? Is it when you are invited to give gyaan to members of TiE? Is it when one of the co-founders exits? Is it when managing attrition becomes a high priority item on your agenda? Is it when customers start complaining of shoddy service? Is it when you meet your classmates from IIT who have remained in well-paying jobs, you check out their lifestyle and come home to your wife and say: Maybe I should have stayed in Citibank! When?

Moment of truth
Methinks it is not a milestone but a psychological moment. Like that moment in 1947, A Love Story where amidst all the bomb blast and mayhem, Anil Kapoor catches a glimpse of the innocent face of Manisha Koirala in a train window and falls in love with her.

So, does it mean the entrepreneur wakes up one morning and says, Today is my last day as a start-up? Not really. Even when the moment is upon him, I doubt he will recognize it. It is more like he has been invited to speak at a start-up event and someone from the audience says, so when did you start your company and he says last year; no wait a minute, the year before; no dang, it was three years ago. And it is at this point that it hits him that he is no longer a start-up and has no business to be speaking at a start-up event!

Mature is as mature does. As long as the entrepreneur is engaged in knee-jerk reactions to situations instead of redundancy planning, as long as he creates contingencies instead of planning for them, as long as he ‘copes’ rather than strategizes, he is a kid stuck in a time warp.

I know of an organization that has 200-plus employees, 150-plus large customers, half a million turnover, offices spread across the globe, in market for five years-in other words, by every yardstick, outgrown being a start-up. Yet its founder says he runs a start-up. Does it mean it is nimble-footed like a start-up? Aah, that is another story for another column. How to be a mature enterprise but twinkle-toed like a start-up!

Nandini Vaidyanathan teaches entrepreneurship, mentors entrepreneurs [www.carmaconnect.in] and has authored the bestseller, Entrepedia.