UNDERSTANDING START-UP
What is a startup?
The term “startup” is a very popular term in town now. The term “startup” rose in popularity during the 1990s, as the technology and the internet-related companies rapidly increased. So,
what is a startup?
One thing that needs to be understood is that there is no hard rule to define a startup. The definition of startup differs from each person. According to famous entrepreneur, Eric Ries, founder of lean startup methodology is,
“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”
To put it in simple terms, a startup is an institution started by one or more than one entrepreneur to develop a viable product, service, or platform according to distinguished market demand. The objective of a startup is to scale them rapidly as a result of offering something that addresses a particular market gap. Generally, a startup starts with initial founding from founders or their family and friends.
So what exactly is a startup, let us break it down with their characteristics and explain it for you.
- A startup is focused on growth
A startup is an institution that is founded with the aim of going big i.e. to scale the business into brand. So, the startup founder and the team only aim for one thing i.e. growth. Small businesses may be happy staying small but start up whether it is small in size or big, they aim to scale up. This is the difference between a small business and the startup. A startup has the goal of growing and scaling and doesn’t want to remain a startup in the future. The sole aim of a startup remains to grow whether by increasing the capital of the company or by using or lending different technologies.
- A startup is a solution for a problem
When someone asks what a startup is, you have to be able to explain it in simple terms so that they can understand clearly. For instance you have to explain it to a child. For this, a famous entrepreneur Jochem Wijnands explained his child saying that “A startup is a modern version of an inventor. It experiences a problem and then tries to solve it with ingenuity. A successful start up typically wants to solve a problem and make the world a better place.” (McGowan)
Hence if a company helps in solving a problem and brings some changes, it is a startup company otherwise your company is just an idea.
- A startup is flexible
When it comes to startup, the most important term is flexibility. A startup should be flexible because they are experimenting to validate business models. In the beginning stage of startup, everything is not perfect so there is a need of fixing in different parts of startup. Hence, a startup company is flexible and is prone to fixing.
- A startup is working something innovative together
With a certain goal and thoughts, a startup is founded. In this competitive world, you should have some unique characteristics that can make you stand out from others and for startup i.e. innovation. When a team of different individuals come together to work towards a goal which will be something new and innovative, that can be considered as a startup.
A startup is a place where different innovative ideas come together and they work on it to produce innovative products.
- A startup is a company with a few employees
When a company is founded, there needs to be a team to scale business. The team may include employees, freelancers and so on. There is no any benchmark that your employee count should not exceed a certain number. Generally, the startup has fewer employees working together. A startup is a company where fewer number of people work together to develop an unique product or service and bring it to the market.
- A startup is independent
A startup is a company which is completely independent from others and doesn’t have ties with other established companies. Since startups are independent from others, there is a major hurdle of funding at the beginner stage. Therefore, savings, angel investors or help from family and friends are the available options for funding of startups.
- A startup is about making change
A startup is all about working on something new, creative. Some define startup as “A startup is the conscious decision to form a group of people with the sole purpose of bringing about change in the real world.” The changes in this definition can be considered as doing something new that can boost not only the people involved in this but also the world.
- A startup is a high-risk venture
There is a saying that “Great achievements involve great risks”. There is no business in this world that does not involve risks and startups are the same too. A startup involves more risk than others because the products developed by a startup tend to be innovative and the chance of failing is high. Therefore, a startup is a high-risk venture.
Conclusion
Going through the above definitions, we can see that each can define a startup in their own way. Let’s summarize it by saying “A start up is an institution that is founded by one or more entrepreneurs with the aim of scaling by working together to solve problems using innovative ideas which can be quite risky”. However, it is very important for any startup company to identify what are your startup’s innovative goals.
The main aim of this article was to make you clear about what exactly does startup mean. Hope it will be beneficial for those people who are curious about startups and want to venture into it.
With a certain goal and thoughts, a startup is founded. In this competitive world, you should have some unique characteristics that can make you stand out from others and for startup i.e. innovation. When a team of different individuals come together to work towards a goal which will be something new and innovative, that can be considered as a startup.