Question
At what point does the work you have built become a bona-fide startup? Where's the tipping point?
Answer
When you quit other money-making activities to focus exclusively on said project with an "exit or bust" leap of faith. Until then, you're not burn-bridges committed.
This is the industry standard in my experience, not my own standard. Investors like this standard because their money is not contingent or hedged (well... unless they are doing somewhat evil things like tranches), so they want your effort to be not contingent or hedged as well. And yeah, they want you to jump before they do, which means a leap of faith and living on savings for a while etc.
This is not a necessary condition to build a successful money-making technology product or service (though investors and a certain class of entrepreneurs will try to convince you that it is). You can do good technology, including "big" technology (i.e., not just "lifestyle business" level) without making this jump. In fact, the industry standard definition of "startup" only covers a tiny fraction of the appetite for entrepreneurial risk out there. It is a very conservative standard, so the startup game is very conservative along this dimension.
My own standard is to simply avoid the word "startup" precisely because of this kind of expectation, which is a kind of risk-taking only young kids straight out of college can rationally afford (or people who've already achieved passive income security). Investors are portfolio-hedged by definition (though individual investments are not hedged by themselves), but entrepreneurs under this model are forced to put all eggs in one basket. It is often justified with some kind of ideological mumbo jumbo about how you're not a "real" entrepreneur if you don't do it this way, but the truth is, this kind of risk exposure merely optimizes for investors, who control a scarce money supply. It is far from being the only kind of workable risk exposure.
I don't ever want to "do a startup" under these rules of engagement. I merely do technology/biz projects with varying levels of potential for future income, within a risk-managed portfolio of activities, where commitment levels follow confidence levels which follow actual cash flows (i.e., no "traction" bullshit; doubling down and increasing commitments is linked to dollars, not eyeballs or PR).
My risk tolerance no longer extends to unhedged, non-contingent jumps into the deep end.
So short answer: startup=leap of faith where you quit other money making activities, BUT don't buy the party line that this is the only way to skin the cat.
This is the industry standard in my experience, not my own standard. Investors like this standard because their money is not contingent or hedged (well... unless they are doing somewhat evil things like tranches), so they want your effort to be not contingent or hedged as well. And yeah, they want you to jump before they do, which means a leap of faith and living on savings for a while etc.
This is not a necessary condition to build a successful money-making technology product or service (though investors and a certain class of entrepreneurs will try to convince you that it is). You can do good technology, including "big" technology (i.e., not just "lifestyle business" level) without making this jump. In fact, the industry standard definition of "startup" only covers a tiny fraction of the appetite for entrepreneurial risk out there. It is a very conservative standard, so the startup game is very conservative along this dimension.
My own standard is to simply avoid the word "startup" precisely because of this kind of expectation, which is a kind of risk-taking only young kids straight out of college can rationally afford (or people who've already achieved passive income security). Investors are portfolio-hedged by definition (though individual investments are not hedged by themselves), but entrepreneurs under this model are forced to put all eggs in one basket. It is often justified with some kind of ideological mumbo jumbo about how you're not a "real" entrepreneur if you don't do it this way, but the truth is, this kind of risk exposure merely optimizes for investors, who control a scarce money supply. It is far from being the only kind of workable risk exposure.
I don't ever want to "do a startup" under these rules of engagement. I merely do technology/biz projects with varying levels of potential for future income, within a risk-managed portfolio of activities, where commitment levels follow confidence levels which follow actual cash flows (i.e., no "traction" bullshit; doubling down and increasing commitments is linked to dollars, not eyeballs or PR).
My risk tolerance no longer extends to unhedged, non-contingent jumps into the deep end.
So short answer: startup=leap of faith where you quit other money making activities, BUT don't buy the party line that this is the only way to skin the cat.