Startups

Wikipedia’s page on startup companies says “While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered,_ startups refer to new businesses that intend to grow large_ beyond the solo founder”

This definition matches quite closely to that of Paul Graham, a famous startup entrepreneur and investor, who has his own widely-cited definition that is very popular within the industry:

“A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.”

The common factor in both definitions is the strong emphasis on growth. These definitions also show how startups can exist as a subset of technology companies (a startup can be a high growth-focused technology company), but that doesn’t mean that all technology companies are startups by default – to qualify, they need to be fully focused on growth.

This growth focus doesn’t mean that a startup is inherently better than a tech company (or any other type of company), it just has a different goal and focus.

Facebook famously had a motto of “move fast and break things” while they were in their early hyper-growth startup phase, and this culture undoubtedly helped them reach their extreme level of success. But a “growth at all costs” style doesn’t translate so well to companies in fields that are less tolerant of mistakes, like medicine, law or accounting.

Unicorns

A unicorn is an informal name given to a privately owned startup valued at one billion dollars ($1B) or higher.

The term is commonly attributed to venture capitalist Aileen Lee who popularised it in 2013. At the time, only a small group of companies fit the criteria, so it made sense to give them a nickname based on a mythical being. But with the huge growth the tech industry has seen in recent years, the number of unicorns has exploded from 39 to hundreds.

We now have a new term to describe even larger privately owned companies like Stripe or SpaceX with a value of $10 billion or higher: the Decacorn.

FAANG

FAANG is an acronym that refers to large, high-performing tech companies: Facebook (now Meta), Amazon, Apple, Netflix and Google (now Alphabet). While it’s still commonly used, it does not accurately represent the current largest or most powerful technology companies. Based on current market valuations, you would expect Netflix to be replaced by companies like Microsoft or Nvidia.

Big Tech

Big Tech usually refers to the group of large tech companies that are seen to hold powerful or politically sensitive positions in the market, like Apple, Alphabet (Google), Amazon, Meta or Microsoft.

You’ll commonly see it used concerning ideas around monopoly power, antitrust, and “breaking up big tech”, where the market valuation of a company is less important than its perceived impact on society.

Silicon Valley and beyond

It’s hard to spend much time discussing the tech world without mentioning Silicon Valley.

Considered by many to be the home of technology, Silicon Valley is located between San Francisco and San Jose in California and is the headquarters of tech giants like Apple, Google and Meta (Facebook).

The transistor was invented in SV, as were the first companies to successfully commercialise the technology, like Fairchild Semiconductor and Intel. That’s where the “silicon” in Silicon Valley comes from, as silicon is one of the key materials in manufacturing modern semiconductors used in all our electronic devices.

But the tech world expands far beyond the valley. Large tech communities exist in New York City, Seattle, Austin and, more recently, Miami. You’ll find thriving communities outside the United States in London, Berlin, Stockholm, and further afield in cities like Tel Aviv. And the vast majority of technology manufacturing is based in Asia, with China, Taiwan, and South Korea having particularly strong technology economies.

With the huge increase in work-from-home / remote working throughout the pandemic, there is a strong argument to be made that the value of being in the more “traditional” tech locations has decreased. As someone who has worked remotely for many years, I think this point of view has merit, but there are also some real benefits of meeting and working in person.

We will likely see more tech companies being founded in smaller cities and moving to a hybrid of “remote days’’ and “office days”. As a new or soon-to-be tech employee, you’ll have a range of options and will not need to be restricted to the location you happen to live in.