What Paul ignores is the fact that most people out of college are faced with seemingly insurmountable debt as a result of having to pay for an education - esp. in America (and to a lesser extent in Canada). This is one problem that will prevent startups from happening at such a rapid pace as he anticipates. In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar. On a somewhat related note, Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc.
So wouldn't those people drop out earlier? If you strip out the emotional content of your post, it's quite banal: the price of a product (college) is going up, so people who buy the product (students who pay full tuition) have less money, and since money is a transportable, transferable form of freedom, they're less free.
" In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar."
That's irrational. If they're already way in debt, shouldn't they want to take more risks? Why the hell would you do something boring for ten years to pay off your debt, when you could do something fun for one year and have a 10% chance of more than paying off your debt. Also, employers are impressed by people who start their own businesses.
" Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc."
Right, because Businessweek can't say "The best place for you to work is that company you start in your apartment with your pals," because 1) that doesn't appeal to BW's audience, and 2) startups are small and varied, so it wouldn't make sense. It's like taking a survey of the most popular restaurants (McDonalds, Burger King) and using that as proof that the swanky new sushi place down the street is an awful place to eat.
From what I remember, college debt payments are not usually more than other expenses like food and rent. I'd bet they're rarely more than 30% of the expenditure of someone considering a startup, and thus shouldn't be a deciding factor.
This is one of those ways in which being a rich kid is a huge advantage. I'm not sure if most young startup founders have rich parents, but it wouldn't be particularly surprising. Then again, maybe having rich parents makes it too easy to just coast in a cruddy job (or grad school)...
[quote]
What Paul ignores is the fact that most people out of college are faced with seemingly insurmountable debt as a result of having to pay for an education
[/quote]
Yeah, but you get a 6 month grace period after school's over before repayment begins, and you usually have several financial hardship forbearances you can take to postpone repayment. Even then, you can go back to school for one semester, and reset the grace period and financial hardship forbearances.
So, you have at least 18-24 months of forbearance/deferment before you have to begin repayment, and that can be hacked indefinitely by taking 6 credits at your local community college.
I believe that more high-schoolers than before will evaluate an alternate option to college. It is these folks who will add strength to the startup numbers. The people who decide to get into college and pickup big debts have already made a decision of not wanting to do startups. Additionally,this debt seems insurmountable in the current scenario, but as things change loan financiers will factor in such changes and perhaps even build in options for doing a startup or allow for repayment to start much later than it currently does.
While Paul focuses on web based startups, I think this phenomenon will apply to more areas as technology enables individuals to create their own niche. This is already true for some sports and certain types of businesses.
Like you correctly mentioned, the debt problem is more pronounced for Americans and some other nationalities, most developing nations do not have this problem and their entrepreneurs will start startups especially in developed and lucrative markets such as the US. This inturn will force the US mechanism to adapt. This effect of globalization has already had effects in many other industries.
In the UK you graduate in June and have to start repaying your loan the following April as a percentage of your income if you earn more than GBP14,000/year. I've found that you can survive for GBP6,000/year so this shouldnt be an issue. No idea what the situation is like in the US however
I wish I'd thought to consider a startup during my grace period. If I was graduating today, rather than right after 9/11, that's almost certainly what I'd do.
"Then the effects of being measured by performance would propagate all the way back to high school, flushing out all the arbitrary stuff people are measured by now. That is the future of web startups." What an impressive conclusion - I hope it happens.
This would only work if everyone in HS either expects to work on web applications or the trend spreads to all industries. That might take a little longer.
I wish acquisition was this easy. I worked at a very large bank in Emerging Technology and I pushed our group to buy 3 startups. We passed on all of them because of bureaucracy and lack of vision. Heck, the same bank passed on paypal (and tried to create their own), and now they have to compete head to head with a company that could be in house.
The unexpected Ted Stevens reference at the end really made me grin. I find Stevens so hilarious and horrifying at the same time.
I was surprised to find it in a PG essay, but on reflection it seems really appropriate in context. Though it did distract me enough that I had to read the last section twice.
With standardization comes bureaucracy. I dread what will happen when all this starts to become apparent to the government, and they decide that they need to "fix" some of the perceived injustices. How long before we start seeing laws regulating founder/investor relationships that look like our current laws for employers and employees? Will investors start being required to submit reports to the government to prove that their investment decisions aren't racially biased?
The government does not have an interest in impeding entrepreneurs or the formation of new businesses. The goals are usually the opposite, as can be seen with the various govt incentives and programs in place to help aspiring business owners.
I dont foresee increased regulation to be a big problem. Hindering the development of new businesses would be shooting the economy in the foot.
> Will investors start being required to submit reports to the government to prove that their investment decisions aren't racially biased?
Are you suggesting that investors should be racially biased?
I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons.
Hey, Paul: I've got an even better idea. What say I just cut all you investors out altogether? Whatever happened to growing a company slowly, based on the profits coming in? Oh, that's right - we don't do this in the tech industry because everyone says it won't work.
That's just a bunch of bunk. Nothing was funnier during Web 1.0 than guys saying we were "rewriting" the rules of business - like, profits didn't matter. Truth is, from a business point of view, starting a web service is no different than starting a dry cleaners: give people what they want, at a reasonable price (in our business, that usually means ad-supported)... and they'll come back (and click on ads in the process).
Yes, it may take some technical innovation... but it doesn't take any business innovation. Everything you say in your essay is true; so seriously, why do I need you? You expect me to go through this whole dance to come to Cambridge for, what, the possibility of five-thousand bucks? And then move to SilCon for three months so you can keep tabs on us once a week? Like, are you serious?!
Your essay is particularly prescient because you might have inadvertently predicted the ultimate demise of your current business - i.e., venture funding. No, I won't fill out your form; no, I won't travel to Cambridge for the possibility for you to give me five-thousand bucks. No, I won't move to the Valley so you can keep tabs on what I'm doing. I'm a big boy, and I can take care of this end myself, thanks. Good luck with giving away your cash.
Where is the evidence that Google has the best programmers? Certainly if you look at Google's acquisitions, they all stagnate post Google. Picasa was a pretty good product -- two years ago when Google bought it. Since then it's added a button to upload photos to Blogger. Gmail had a pretty good feature set for Web-based mail -- two years ago when it rolled out. Since then? etc.
Can't agree with the "Younger, nerdier founders" section.
It's like any other long tail, in this case the prototypical founder (late 20', single, technical guy) will not be as common - it'll become a more-diverse population. There will be younger founders and there will be older founders, too. Nerdier, and hipper. Etc.
For example, I'm a 40 yo front-end developer (started in 1995 building interactive apps at ESPN). I'm now starting a company, doing all the backend development too, thanks to Ruby on Rails. This was never available to me before 2006, really.
My bet - the trend will be away from the core developers, as the back end tools become commoditized and packaged, and the prized employees will become the designers - UI and graphical. Brands and positioning will start to play a larger part, and these contributors will have the most to say about this part of the company. I predict the trend will go away from the technical, as people will need to wear many hats in a small company.
As for the young, I don't believe they have an advantage in a crowded startup environment. The lucky bet, or obvious missing younger-demographic website will be created by the kids, but this will happen less and less as the low-hanging fruit is gobbled up. Instead, I think the older (or rather experienced) will have an advantage in a crowded startup world. Here, it'll be the niche positioning, establishing business relationships, and pursuing effective growth strategies that will make the difference.
Agreed. As per below. You probably know that Fred Wilson stirred up the "age of founders" issue a few months back. I'm curious to find some data on age/general demographic trends re: founders.
Prediction: Angel investors will ink deals with VCs to create an official pipeline. For example, let's say KPCB agrees to fund at least one Techstars company per year in exchange for first pick or something like that. That's the way elite prep schools interface with certain Ivy's, and it seems to work out for both of them. Of course startups will never get as locked down as colleges because there will always be more money than good investments, at least for the foreseeable future.
I always assumed the prep-school -> ivy connection was informal, much like the one between certain software companies and cs programs. For instance, Yale takes 10 kids from andover every year because they know all about how smart the 10 smartest kids from andover are from previous experience.
"And being Google, they're figuring out how to do it efficiently."
pg, I am a little alarmed by this flat recognition that is awarded to Google. It might be actually true. But its not an optimal way to think about things in the long run. As a teen ager I was a Michael Jackson fan, It took me a good while longer than other people to realize that he has turned into shit.
That's not a comment about how successful or cool Google may be, it's a comment about their management and corporate culture.
It's like saying "And being Wal-Mart, they're figuring out how to squeeze the last nickel out of their suppliers." It's just how they're interested in doing things.
I think there is a logical inconstancies in here.
You say specific startup hubs are important, but specific colleges are not? Bullshit, either both are important or both are not. By your own arguments they will be performing the same service, building communities.
You say one goes to Silicon Valley to be in a community of startups, meet cofounders and talk with smart people.
Then you say that in the future, in college, we will be more concerned with meeting cofounders and communing with smart people than we will be concerned with grades.
Why won't yo want to go to the school with all the smartest like-minded people?
Thats what Harvard is to business people. A community of like minded people that band together to help each other.
The same will be created at the new breed of startup oriented tech schools. The admission standards might be a tiny bit different though.
Great post, as usual, there is one point though - assuming that all the best will move to the startup hubs is like efficient markets hypothesis i.e. not really. They would move in a rational world but there are many seemingly irrational reasons that you can find world class people in obscure places anywhere in the world and, moreover, they are content to stay there. I am talking from personal experience, in my previous (vertical) search startup my chief programmer was world-class and had results to prove it, has since produced another world-class (Facebook) app and has not set foot in US ever. Similarly in my current search startup, I have some really great young kids. So the moral is that sure, the ratio of world class people is higher in startup hubs, but the rest of the world is so much bigger :) that many more are still out there ...
"At the moment, there is no one within big companies who gets in trouble when they buy a startup for $200 million that they could have bought earlier for $20 million. There should start to be someone who gets in trouble for that."
I think it's right that startups will be acquired earlier and earlier, but that makes me wonder: might those earlier acquisitions (which sometimes decrease productivity to 1/13th what it was) sabotage the success of the startup either because once acquired the founders don't have to work as hard to keep their heads above water or because when not constrained by a tiny startup budget the founders won't worry as much about finding efficient ways to do things--which in the past made them better startups/companies?
I wondered if anyone would bring that up. I think another thing that will happen is that acquirers will figure out how not to ruin the startups they buy.
A company that bought a bunch of hot startups early on and didn't destroy their productivity would be a force to reckon with.
Your each and every article is giving indication that married people are not good enough to start startup. Come on man - I am reading your articles to inspire myself and to keep up my tempo but when I read age analysis then that is very demotivating.
Well I think I need to find place where there are success stories without age limit ;)
I understand that kids and wife can take quite a bit time. But if there are people like me who dreams about own business for years and wasn't able to start it because never found right channels and due to that now I am above 30. Now I have vision and courage but also I am married. Does it mean that I have to stop seeing dream? No way man. I am here to prove you wrong. Will let you know whenever I am succesful :)
I agree. I would rather invest in a startup run by a 30+ person than one run by two 20 somethings.
I think one problem of starting up at 30+ is that one has achieved already a level of income, status etc. Putting that to risk is not so easy step to take than just having graduated. But if such a person takes that risk her idea is probably worth a second look...
What about the fact that when an industry matures it tends to become an oligopoly. It almost happens with any industry in history (e.g. automotive). With maturity often comes standardization which in turn compliments big bureaucratic organizations.Will this also apply to the Web? What about the chances of startups in the automotive industry? They used to be good round 1900...
Some thoughts on costs: While it is cheap to get some system up and running in a world of lots of different apps and competitors that go after a limited number of users it will be vital to get attention in order to succeed. In the end this probably means spending loads of marketing money which is anything but not cheap.
If being in silicon valley is important to mix with the best and brightest then being in a good university deserves the same argument/conclusion. Any old university won't have students capable of learning at fast pace and so the curriculum will be watered down. Any old university won't have high quality teachers that can mentor the most gifted students.
I do think taking that last exam and finishing university was a magical moment. Following a commitment through to the end even when things are tough or tedious is valuable experience. You can get this other ways but there is a huge difference between someone who stuck in there and finished university and someone who called it off just three credits short.
Hmm. I find the argument for unlimited concentration of startups in startup hubs somewhat unconvincing.
If the number of startups founded goes up by an order of magnitude or two, then the need to move to Silicon Valley in order to be in a startup-rich environment goes down.
Now, I do think that startups will still move, but I think that the number of hubs they can choose among to move to will be increasing as well.
I also have a feeling that beyond a certain density, the largest hubs will eventually hit diminishing returns in terms of their utility for startups (which will prompt more hub specialization).
That is a valid objection. Though there are only 5 or 6 web startup hubs, out of the thousands of similar sized towns in the world. That number could increase by a factor of 10, and it would still be likely that you'd have to move.
And in any case I doubt the number would increase. The power of hubs is self-perpetuating. So no matter how many startups originated in St. Louis, there wouldn't be a lot there when a given new one started, because many of the previous ones would have already moved.
(Suppose it happened that 50% of the next generation of big movie stars were from St. Louis. That would not make St. Louis a rival to Hollywood.)
Also there's the empirical argument: I can't think of one industry in history whose growth made the established centers irrelevant.
It depends on how the new startups are distributed. If it's a lot more places with just one startup, no new hubs will be created. Doubling from one to two increases the odds that another startup will come along, but the odds don't get especially favorable until you hit a critial mass, and that mass probably depends on local conditions.
Lots of folks have tried to create startup hubs. What will be different this time?
"We now get on the order of 1000 applications a year. What are we going to do if we get 10,000? That's actually an alarming idea. But we'll figure out some kind of answer. We'll have to. It will probably involve writing some software, but fortunately we can do that."
The company that manages to blend digital identity and reputation with the information power of networks is probably going to be the next MS. I've been interested in this problem for a long time now. Someone should really submit a proposal as a YC idea.
Does anyone believe that the future viability of web application innovation depends on the availability of consumer access to higher and higher bandwidth connections (at a cheaper and cheaper cost - to the point of commoditization), and if so, as the US falls further behind other countries in this respect,will that reduce the relevance of Silicon Valley as a startup hub for web application companies? Which country (city) do you think will emerge as the web app innovation leader?
I think Japan or South Korea is at the forefront in terms of widespread availability of cheap high speed internet access. Probably their reputations as societies that are not very inviting to foreigners, and the difficulty of non-native speakers learning the language is going to dissuade a lot of people from moving there to start companies.
Paul, you always speak of acquisition of a startup by a big company. What possibilities exist for startups merging? Is it common, or do you expect it to be?
I know a couple other startups in my town (one of your big 3) who do similar things to my startup. Thanks to the public (link-happy!) structure of the web, we already let people go from one to the other: a loose ad-hoc integration. Will this be the future of cooperative web software development?
[+] [-] electric|18 years ago|reply
[+] [-] byrneseyeview|18 years ago|reply
" In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar."
That's irrational. If they're already way in debt, shouldn't they want to take more risks? Why the hell would you do something boring for ten years to pay off your debt, when you could do something fun for one year and have a 10% chance of more than paying off your debt. Also, employers are impressed by people who start their own businesses.
" Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc."
Right, because Businessweek can't say "The best place for you to work is that company you start in your apartment with your pals," because 1) that doesn't appeal to BW's audience, and 2) startups are small and varied, so it wouldn't make sense. It's like taking a survey of the most popular restaurants (McDonalds, Burger King) and using that as proof that the swanky new sushi place down the street is an awful place to eat.
[+] [-] pg|18 years ago|reply
[+] [-] far33d|18 years ago|reply
[+] [-] iamelgringo|18 years ago|reply
Yeah, but you get a 6 month grace period after school's over before repayment begins, and you usually have several financial hardship forbearances you can take to postpone repayment. Even then, you can go back to school for one semester, and reset the grace period and financial hardship forbearances.
So, you have at least 18-24 months of forbearance/deferment before you have to begin repayment, and that can be hacked indefinitely by taking 6 credits at your local community college.
[+] [-] paul|18 years ago|reply
[+] [-] kashif|18 years ago|reply
While Paul focuses on web based startups, I think this phenomenon will apply to more areas as technology enables individuals to create their own niche. This is already true for some sports and certain types of businesses.
Like you correctly mentioned, the debt problem is more pronounced for Americans and some other nationalities, most developing nations do not have this problem and their entrepreneurs will start startups especially in developed and lucrative markets such as the US. This inturn will force the US mechanism to adapt. This effect of globalization has already had effects in many other industries.
[+] [-] danw|18 years ago|reply
[+] [-] Goladus|18 years ago|reply
[+] [-] gibsonf1|18 years ago|reply
[+] [-] matth|18 years ago|reply
[+] [-] goodspeed|18 years ago|reply
...because we've inspired everyone to do startups. There will be nobody else to hire :)
We're back to the pre-industrial revolution era. Where everyone didn't hire anyone and had their own backyard industry.
Woohoo!
[+] [-] chris_l|18 years ago|reply
[+] [-] broderickturner|18 years ago|reply
[+] [-] brett|18 years ago|reply
I was surprised to find it in a PG essay, but on reflection it seems really appropriate in context. Though it did distract me enough that I had to read the last section twice.
[+] [-] dfranke|18 years ago|reply
[+] [-] jsjenkins168|18 years ago|reply
I dont foresee increased regulation to be a big problem. Hindering the development of new businesses would be shooting the economy in the foot.
[+] [-] run4yourlives|18 years ago|reply
Are you suggesting that investors should be racially biased?
I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons.
[+] [-] conkhead|18 years ago|reply
That's just a bunch of bunk. Nothing was funnier during Web 1.0 than guys saying we were "rewriting" the rules of business - like, profits didn't matter. Truth is, from a business point of view, starting a web service is no different than starting a dry cleaners: give people what they want, at a reasonable price (in our business, that usually means ad-supported)... and they'll come back (and click on ads in the process).
Yes, it may take some technical innovation... but it doesn't take any business innovation. Everything you say in your essay is true; so seriously, why do I need you? You expect me to go through this whole dance to come to Cambridge for, what, the possibility of five-thousand bucks? And then move to SilCon for three months so you can keep tabs on us once a week? Like, are you serious?!
Your essay is particularly prescient because you might have inadvertently predicted the ultimate demise of your current business - i.e., venture funding. No, I won't fill out your form; no, I won't travel to Cambridge for the possibility for you to give me five-thousand bucks. No, I won't move to the Valley so you can keep tabs on what I'm doing. I'm a big boy, and I can take care of this end myself, thanks. Good luck with giving away your cash.
James Touchi-Peters, Founder/CEO CONK!/Arrow Media Minneapolis USA [email protected] http://conk.com
[+] [-] srt19170|18 years ago|reply
[+] [-] papersmith|18 years ago|reply
[+] [-] swards|18 years ago|reply
It's like any other long tail, in this case the prototypical founder (late 20', single, technical guy) will not be as common - it'll become a more-diverse population. There will be younger founders and there will be older founders, too. Nerdier, and hipper. Etc.
For example, I'm a 40 yo front-end developer (started in 1995 building interactive apps at ESPN). I'm now starting a company, doing all the backend development too, thanks to Ruby on Rails. This was never available to me before 2006, really.
My bet - the trend will be away from the core developers, as the back end tools become commoditized and packaged, and the prized employees will become the designers - UI and graphical. Brands and positioning will start to play a larger part, and these contributors will have the most to say about this part of the company. I predict the trend will go away from the technical, as people will need to wear many hats in a small company.
As for the young, I don't believe they have an advantage in a crowded startup environment. The lucky bet, or obvious missing younger-demographic website will be created by the kids, but this will happen less and less as the low-hanging fruit is gobbled up. Instead, I think the older (or rather experienced) will have an advantage in a crowded startup world. Here, it'll be the niche positioning, establishing business relationships, and pursuing effective growth strategies that will make the difference.
[+] [-] gregac|18 years ago|reply
[+] [-] Alex3917|18 years ago|reply
[+] [-] pg|18 years ago|reply
[+] [-] far33d|18 years ago|reply
[+] [-] bluishgreen|18 years ago|reply
pg, I am a little alarmed by this flat recognition that is awarded to Google. It might be actually true. But its not an optimal way to think about things in the long run. As a teen ager I was a Michael Jackson fan, It took me a good while longer than other people to realize that he has turned into shit.
[+] [-] zach|18 years ago|reply
It's like saying "And being Wal-Mart, they're figuring out how to squeeze the last nickel out of their suppliers." It's just how they're interested in doing things.
[+] [-] djasek|18 years ago|reply
You say one goes to Silicon Valley to be in a community of startups, meet cofounders and talk with smart people. Then you say that in the future, in college, we will be more concerned with meeting cofounders and communing with smart people than we will be concerned with grades. Why won't yo want to go to the school with all the smartest like-minded people? Thats what Harvard is to business people. A community of like minded people that band together to help each other. The same will be created at the new breed of startup oriented tech schools. The admission standards might be a tiny bit different though.
[+] [-] distrsearch|18 years ago|reply
[+] [-] herdrick|18 years ago|reply
[+] [-] brianwc|18 years ago|reply
I think it's right that startups will be acquired earlier and earlier, but that makes me wonder: might those earlier acquisitions (which sometimes decrease productivity to 1/13th what it was) sabotage the success of the startup either because once acquired the founders don't have to work as hard to keep their heads above water or because when not constrained by a tiny startup budget the founders won't worry as much about finding efficient ways to do things--which in the past made them better startups/companies?
[+] [-] pg|18 years ago|reply
A company that bought a bunch of hot startups early on and didn't destroy their productivity would be a force to reckon with.
[+] [-] Jaggu|18 years ago|reply
Your each and every article is giving indication that married people are not good enough to start startup. Come on man - I am reading your articles to inspire myself and to keep up my tempo but when I read age analysis then that is very demotivating.
Well I think I need to find place where there are success stories without age limit ;)
I understand that kids and wife can take quite a bit time. But if there are people like me who dreams about own business for years and wasn't able to start it because never found right channels and due to that now I am above 30. Now I have vision and courage but also I am married. Does it mean that I have to stop seeing dream? No way man. I am here to prove you wrong. Will let you know whenever I am succesful :)
Thanks for all great articles.
[+] [-] lakai|18 years ago|reply
[+] [-] lakai|18 years ago|reply
[+] [-] tedhenry|18 years ago|reply
I do think taking that last exam and finishing university was a magical moment. Following a commitment through to the end even when things are tough or tedious is valuable experience. You can get this other ways but there is a huge difference between someone who stuck in there and finished university and someone who called it off just three credits short.
[+] [-] webmaven|18 years ago|reply
If the number of startups founded goes up by an order of magnitude or two, then the need to move to Silicon Valley in order to be in a startup-rich environment goes down.
Now, I do think that startups will still move, but I think that the number of hubs they can choose among to move to will be increasing as well.
I also have a feeling that beyond a certain density, the largest hubs will eventually hit diminishing returns in terms of their utility for startups (which will prompt more hub specialization).
[+] [-] pg|18 years ago|reply
And in any case I doubt the number would increase. The power of hubs is self-perpetuating. So no matter how many startups originated in St. Louis, there wouldn't be a lot there when a given new one started, because many of the previous ones would have already moved.
(Suppose it happened that 50% of the next generation of big movie stars were from St. Louis. That would not make St. Louis a rival to Hollywood.)
Also there's the empirical argument: I can't think of one industry in history whose growth made the established centers irrelevant.
[+] [-] anamax|18 years ago|reply
Lots of folks have tried to create startup hubs. What will be different this time?
[+] [-] Alex3917|18 years ago|reply
The company that manages to blend digital identity and reputation with the information power of networks is probably going to be the next MS. I've been interested in this problem for a long time now. Someone should really submit a proposal as a YC idea.
[+] [-] gcheong|18 years ago|reply
[+] [-] imgabe|18 years ago|reply
[+] [-] myth_drannon|18 years ago|reply
[+] [-] ken|18 years ago|reply
I know a couple other startups in my town (one of your big 3) who do similar things to my startup. Thanks to the public (link-happy!) structure of the web, we already let people go from one to the other: a loose ad-hoc integration. Will this be the future of cooperative web software development?
[+] [-] imsteve|18 years ago|reply
Sure they can merge, but this is not an "exit". As far as I know, the purpose of a startup is a successful exit of some type.