Disclosure: I worked for various "startup" companies starting in 1991 through 2005. One got bought by a large company and made me some money, but not a life-changing amount. Some others variously went into "zombie" mode. One got bought by a company that simply milks the existing customer base for support revenue. One failed outright.
That said, when the first company was bought, there was a product that the buying company didn't want to continue to support. Some friends of mine made an agreement to take over that product, and started a company to do so. They never grew the customer base that much - it was a niche product. However, they were able to continue to work together as friends, have decent paychecks with 100% company-paid insurance, and after about 15 years, sold out to a company for enough to allow for comfortable (not rich) retirements. This was all on purpose and was discussed frequently by them - "Do we want to grow, or do we want to enjoy what we're doing, have some free time, less stress, and remain friends?"
I've always thought that was a FINE model for a company, if you can pull it off. I always wanted to work there (did some consulting for them), but they could never grow quite enough to hire me. Ah, well. :)
That's the story of the startup I work for as well. It survived long enough to find it's niche product and then stabilized. Everyone had decent pay and great hours. Eventually an exit opportunity came around and we all made some money. Parent org lets us keep maintaining and developing our niche product more or less independently. The more ambitious execs moved up into the parent org, but the rest of us remain friends working at a comfortable job.
Those aren't really startups though, at least according to Paul Graham. Those are more akin to small businesses. A startup is born to scale exponentially.
PG’s definition is only one, very VC-oriented definition. I think a layman’s definition would be a new for-profit organization started to solve problems, likely but not exclusively, using technology to do so.
That said, when the first company was bought, there was a product that the buying company didn't want to continue to support. Some friends of mine made an agreement to take over that product, and started a company to do so. They never grew the customer base that much - it was a niche product. However, they were able to continue to work together as friends, have decent paychecks with 100% company-paid insurance, and after about 15 years, sold out to a company for enough to allow for comfortable (not rich) retirements. This was all on purpose and was discussed frequently by them - "Do we want to grow, or do we want to enjoy what we're doing, have some free time, less stress, and remain friends?"
I've always thought that was a FINE model for a company, if you can pull it off. I always wanted to work there (did some consulting for them), but they could never grow quite enough to hire me. Ah, well. :)