The Endless Spiral of Startup Terminology

How Startup Jargon Became a Maze of Confusion

The author is Julien Petit, founder of Mighty Nine.

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In the world of startups, conversations often seem to go in circles. Terms like innovation, startup, and scale are thrown around as though their meanings are self-evident. Yet, as we dig deeper, it becomes clear that these words—and the ideas they represent—are not as straightforward as they once seemed.

Recently, I found myself in a discussion with some brilliant minds, and we started with a simple question: What does innovation really mean? The goal was to clarify the definition, but instead, the conversation spiraled into a web of new concepts and terminologies, each one more confusing than the last. It was as if every time we introduced a new term to explain the previous one, we only ended up adding more layers of complexity.

Innovation or Startup? Which Comes First?

The discussion began with pointing out how strange it is to define a startup as simply an innovative company. “It’s not just confusing,” one said, “it’s kind of stupid.” And he had a point. If innovation is the key to defining a startup, then what about companies selling mundane products like sponges or underwear, which still somehow get labeled as startups? As another one noted, today, everyone wants to call themselves a startup because it seems easier to raise funds that way.

At this point, instead of clarifying what innovation truly means, the conversation took a turn. We stopped asking what innovation is and shifted our focus to another elusive term: startup. Now we were caught up in trying to define whether it’s the venture capital investment that makes a startup, or if a startup is what attracts venture capital.

Already, we had strayed from our original question. But things were about to get even more tangled.

Scaling: The Cure-All or Another Buzzword?

During the discussion, someone attempted to simplify the conversation by suggesting we focus on scalable ventures. This seemed promising. Surely, scalability—growing a business rapidly with minimal added investment—could help explain what makes a startup. But then the term scalable itself needed defining.

I highlighted the ambiguity: “We’ve just substituted one term for another. Now we need to define scalability.” And I was right. The conversation shifted again—this time into the realm of what it means for a company to be scalable, and why some businesses, like Hermès and LVMH, could be considered scalable but aren’t typically thought of as startups.

At this point, someone introduced yet another idea: that a startup is an “enterprise whose investments and potential revenue are not linearly linked.” This brought us back to the traditional Silicon Valley concept of exponential growth versus linear investment. So now we had three competing ideas—innovation, scalability, and exponential vs. linear growth—and none of them had resolved the initial question of what innovation truly is.

The Never-Ending Spiral of Concepts

As if the conversation weren’t complex enough, the terms Product-Market Fit (PMF) and service vs. manpower were added to the mix. Someone quipped that a startup is a business with an unproven playbook—as soon as you hit PMF, you’re no longer a startup but a venture. This seemed like a neat way to tie things together. However, PMF itself needed explanation, and soon we were back to discussing whether scalability depends on J-curve or linear growth models.

By the end, we were no longer talking about innovation or startups in any simple sense. Instead, we had layered on multiple concepts that were meant to clarify each other but only ended up making the discussion more convoluted: winner-takes-all markets, software vs. manufacturing models, services vs. manpower, industrialization, and so on.

It became clear that we were stuck in a spiral of terminology, each new term introduced to explain the last but ultimately leaving us further from clarity. The more we tried to pin down what makes a startup, the more elusive the definition became. This isn’t just a problem of semantics—it’s a problem of how we think.

A Dogma That Spreads Like a Virus

What struck me most about this conversation was not just the endless loop of terms but the way we’ve accepted this spiral as normal. These concepts—innovation, scalability, PMF—are taken as gospel in the startup world, even though they often contradict or fail to fully explain one another.

As I said during the conversation: “There’s something off with how we define our field, and if we don’t take it into account, we’ll make mistakes in our reasoning.” We’ve built a dogma around these concepts, and because they’re espoused by influential people, we’ve allowed them to spread like a virus, infecting our thinking without ever questioning whether they truly make sense.

“There’s something off with how we define our field, and if we don’t take it into account, we’ll make mistakes in our reasoning.”

The Birth of a Buzzword

The word startup entered our vocabulary in the 1970s. It was used to describe a new economic phenomenon—companies that weren’t operating like the traditional businesses of the time. These were pioneers in new technologies, like transistors, software, PCs, and eventually the internet. The explosive growth of these companies was something the world hadn’t seen since the Rockefeller era, and a new term was needed to explain it. So, startup was born.

Back then, this label helped people quickly understand that these were not your typical businesses. They were tech-driven, high-growth, and exciting. But over time, as the media, marketing, and even politics got involved, startup became a catch-all for anything remotely innovative. It started to lose its specificity. The term became sexy, a sign that you were part of a different class of entrepreneurs.

But this shortcut in thinking created a problem. When startup became a one-size-fits-all label, it stopped being helpful. We began using it for companies that had little in common with the high-growth, technology-driven pioneers that the word originally described.

The Shift to Early-Stage Investment

As the startup ecosystem evolved, another major shift occurred: the rise of early-stage investment. Suddenly, being a startup wasn’t just about building something new and exciting—it was about attracting investor capital. In this world, raising funds became a badge of honor. If you could convince VCs to invest in your idea, you had made it. The term startup became synonymous with raising money, even more than with innovation.

This created a new narrative: VCs invest in innovation. But what was innovation, really? In many cases, it became just another buzzword, applied to any business that could get funded. The truth is, many companies raising capital weren’t really innovating—they were just leveraging this new game of early-stage investment. Businesses that would never have been called startups in the past suddenly fit the mold because they were playing by the new rules.

Entrepreneurship became a game of testing ideas, often with big budgets and little risk for the founders, because VCs were shouldering that risk. It was fun and thrilling, and it created a wave of excitement around becoming an entrepreneur. But over time, the lines blurred, and the focus shifted away from true innovation toward simply fitting into the startup mold.

The Venture Capital Ecosystem and Its Limitations

Here’s where things get interesting. The venture capital model that we associate with startups isn’t about supporting any business with potential. VCs have a very specific goal: invest in companies that can generate massive returns in less than ten years. They’re looking for the next unicorn, the business that will grow into a billion-dollar company and deliver exponential returns. This is why VCs have historically favored technology companies—the (new) tech sector offered the kind of explosive growth that made these returns possible.

In the 1970s and 80s, these companies were able to grow so fast because they were operating in new, uncharted economic territory. There was little competition, and the potential for expansion was enormous. It’s no surprise that VCs gravitated toward these companies. But we made a critical error in our thinking: we began to believe that VCs invest in technology, rather than understanding that VCs invest in anything that can deliver exponential growth.

Now, we’re seeing the limits of this model. As certain sectors become more saturated, the VC model struggles to deliver the same returns. And suddenly, the label startup feels outdated. After all, if we define a startup as a high-growth tech company, what happens when the growth isn’t there anymore? Or when the innovation isn’t as groundbreaking? Or when new technologies are not new anymore?

It’s Time to Break the Cycle

The way we’ve been thinking for years has led us to a confusing and constraining place. Terms like startup and innovation have become hollow buzzwords, and our reliance on these outdated concepts is more than just a semantic issue—it actively stifles the spirit of entrepreneurship (and venture capital).

The “startup” and VC world thrives on being open-minded, fearless, and creative—embracing the unknown and leaping into the void with curiosity and courage. But the status quo, where we cling to old terminology and definitions, does the opposite. It nurtures what psychologists call a cognitive closure—a preference for order, predictability, and quick decision-making at the expense of ambiguity and creative thinking. This need for closure pushes us toward a false sense of security, where clarity is favored over exploration and predefined frameworks are valued over true innovation. Instead of being a playground for new ideas, the entrepreneurial ecosystem risks becoming a space of conformity and groupthink, where everyone plays it safe, clings to established norms, and is less willing to question the status quo.

This spiral is not just confusing—it’s dangerous. By relying on rigid definitions and frameworks, we risk losing the very essence of what it means to build something new and impactful. Real breakthroughs happen when we challenge existing ideas, think outside established categories, and embrace the discomfort of ambiguity. If we can break free from this endless loop of jargon and dogma, we open ourselves up to fresh thinking, more daring entrepreneurship, and true innovation.

It’s time to shed the old language and assumptions and take a more flexible approach to understanding the world of entrepreneurship (and venture capital). By embracing uncertainty, we empower ourselves to be more creative, to ask better questions, and ultimately, to build businesses that create real, lasting change in a world that is constantly evolving.

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The author is Julien Petit, founder of Mighty Nine.

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