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What Is A Startup?

A startup is a business structure powered by disruptive innovation, created to solve a problem by delivering a new product or service under conditions of extreme uncertainty.

Many entrepreneurs and renowned business magnates define startup as a culture and a mentality of building a business upon an innovative idea to solve critical pain points.


Paul Graham, the founder of Y Combinator, has further simplified the definition of the startup and associated it with growth. According to him-

A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.

Therefore, the key points to note while categorizing a business as a startup are:

Growth

That difference is why there’s a distinct word, “startup,” for companies designed to grow fast. If all companies were essentially similar, but some through luck or the efforts of their founders ended up growing very fast, we wouldn’t need a separate word. We could just talk about super-successful companies and less successful ones. But in fact startups do have a different sort of DNA from other businesses. Google is not just a barbershop whose founders were unusually lucky and hard-working. Google was different from the beginning. – Paul Graham

One thing that differentiates startups from other businesses is the relationship between their product and its demand. Startups have products which target a largely untapped market. Startup entrepreneurs know the perfect strategy to create a product what the market wants and to reach and serve all of them. This triggers the fast growth.


Publisehed in: Simple-guides 07-2018

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