Explainer: The Real Difference Between a Startup and a Pub With a Spreadsheet
On a Tuesday night in a back room in Stockport, a landlord called Dave is updating a spreadsheet. Column A is lager. Column B is what the lager actually cost him. Column C is labelled, with some optimism, "growth". He has told three regulars he is "basically running a startup", and one has offered him two hundred quid for 5 per cent of the pub. Dave is now a founder.
Britain has a lot of pubs and a lot of startups, and the two keep drifting into each other's lanes. One has a licence and a cellar. The other has a domain name and a Slack channel. Both are, at heart, a spreadsheet with feelings. Here is how to tell which one you are standing in.
The paperwork test
Start with the boring bits. They settle most arguments.
A pub needs a premises licence, a designated premises supervisor, a building with a roof, staff expecting wages and a brewery that would like paying. It needs a food hygiene rating, a fire risk assessment and, in most cases, a long conversation with the council about a gazebo.
A startup, at the beginning, needs none of that. It needs a company registered at Companies House, a bank account and somebody willing to describe a napkin as "the roadmap". The pub cannot pretend to exist for long. The startup can pretend to exist for eighteen months and call it stealth.
There is a harder version of the test, and it takes ten seconds. Ask what would stop the business trading tomorrow. The pub's answer is a laminated piece of paper from the council, kept behind the bar, with a date on it. The startup's answer is a card that expires in three years and a founder's willingness to keep talking.
Funding: the round versus the whip
This is where the two diverge most sharply, and where the language gets silliest.
Startups raise in rounds: pre-seed, seed, then Series A if everyone has behaved. The money comes from angels, micro-funds and a man called Nigel who made his money in industrial flooring and wants to give something back to founders. In return, investors get equity, a board seat and the legal right to email at six in the morning.
Pubs raise differently. The model is the whip round, or its formal cousin: the regular who says he will put a grand behind the bar and knock it off his pints. What each side actually receives is roughly this:
- Startup investor: shares, dilution, a monthly update with a chart that goes up and to the right, and an invitation to a launch event in a co-working space above a kebab shop.
- Pub investor: a plaque, a pint on the house, first refusal on the quiz team and the permanent right to say "my local" in a voice that implies ownership of the freehold.
If real money and real shares are changing hands, get an accountant or a solicitor involved before anyone shakes on it. A beer mat is not a shareholder agreement.
Burn rate, explained with lager
A burn rate is how fast you spend money you have not earned. Every business has one. Pubs call it "the week".
Startup burn sits in tidy buckets: salaries for people whose job titles contain the word growth, cloud hosting, a design retainer and a finance director who comes in on Thursdays. Pub burn is messier and no less real:
- Stock, which must be bought before it is sold, and which goes off.
- Staff, who are paid whether or not anyone comes in on a wet Tuesday.
- Energy, for a cellar, a kitchen and a cold room that never switches off.
- Business rates, insurance and the small matter of the brewery tie, which may mean buying your beer at a price somebody else chose.
- Sky Sports. Always Sky Sports.
The startup's burn can be switched off in a fortnight. The pub's cannot, because stock has been bought, staff are on the rota and the cold room is running. Neither is a moral failing. Both want checking weekly, not annually.
The spreadsheet itself
Here is a genuine difference. The startup's spreadsheet has a tab called Assumptions and a tab called 2027. The pub's has a tab called Takings and, if you are lucky, a tab called Takings (correct). One is speculative fiction. The other gets checked against the till every night. The pub wins this round.
Pivot, or "we're doing food now"
A startup pivots when its original idea does not work. It writes a short post about "learnings", changes the words on the homepage and calls the same team a new company. Investors are informed. Sometimes there is a slide.
A pub pivots constantly, but the pivots are older and have names. The quiz night is a pivot. The Sunday roast is a pivot. The sign on the door that says dogs welcome is a pivot. So is the sudden appearance of a pizza oven in the yard, a chalkboard reading NEAPOLITAN, and a landlord who now says "we're a kitchen with a bar attached".
The difference is who gets told. A startup announces its pivot. A pub's pivot is discovered. You walk in on a Thursday and the pool table has gone, and nobody mentions it, ever, and if you ask, you are the problem.
"We're basically a tech company that sells beer," said every landlord who has ever been handed a tablet till and a card reader in the same afternoon.
Valuation: the number nobody can defend
Startup valuation is a negotiation dressed up as a science. A company with no revenue, no product and two people can be "valued" at three million pounds, because a fund needs to deploy before the end of the quarter and somebody read a blog post about dilution.
Pub valuation is also a negotiation, but it is at least anchored to things you can count: barrels sold, the lease, the freehold, the state of the cellar, and the fact that the last tenant did a runner and took the glass washer.
Now do the arithmetic on Dave. Two hundred pounds for 5 per cent means the whole pub is worth four thousand pounds. The beer fridge alone is worth more than that, and so is a fortnight of lager. Either the regular has found the greatest bargain in Greater Manchester, or nobody in that back room has thought about it properly — which is, to be fair, a condition common to both sectors.
The growth chart versus the regular
Startups measure growth in percentages and put the curve on a slide. The curve is a hockey stick. The hockey stick has never happened.
Pubs measure growth in people. Not users — people, with names, who have a usual, a seat and a firm opinion about the music. Forty regulars who turn up twice a week is not "scaling". It is also not going anywhere, which is precisely the point.
Both are legitimate. The mistake is assuming one vocabulary covers both. Customer acquisition cost in a startup is a cell in a spreadsheet. In a pub, it is the round you buy the couple who have just moved into the flats round the corner. It is not tax deductible. It works better than anything Meta has ever sold anybody.
How to tell in one conversation
If you only have a minute, use one of these:
- Ask what happens if nobody turns up on Friday. A startup says the metrics dip. A pub says we lose four hundred quid.
- Ask about the exit. A startup founder describes an acquisition. A publican describes selling up and moving to Llandudno.
- Ask what they actually own. The startup owns a brand, a domain and a deck. The pub owns a fridge, a licence and a very specific smell.
- Ask about the customers. If the answer is a list of first names, and one of them is barred, you are in a pub.
None of this is to say one is better. A pub with a spreadsheet can be a superb business: cash up front, repeat trade, a building that appreciates and a queue at Christmas. A startup can be a pub with worse hours and better stationery. The real difference is not the jargon, the equity or the spreadsheet. It is what happens when the money stops. A startup can close the laptop. A pub has to open at eleven.
Dave is still a founder, for now. The spreadsheet is open on the bar, next to a pint of something that sells for £6.20 and cost him £2.80. Column C reads "growth". Underneath it, in a different font, somebody has written "quiz on Thursdays". That is not a pivot. That is the business.
Photo: Pexels / Pixabay
