The term "Startup" has grabbed all the limelight in past few years in business world and deservingly so, making it a trend in most young graduates to start their own startups, just to sound cool you know. But, what exactly Startup means, really? A crazy middle-aged geek guys trying to take over the world from their garage is startup? Of course, not. Or a huge technology companies are startups? Not even that. Okay, so before your mind runs more wild, let me define for you, Startup is an early stage in the life cycle of enterprise, where a business idea in it's initial stage comes into reality with an entrepreneur securing a fund to form the basic structure of their business, and initiating operations or trading. Many relates this term only with Tech companies, but it's not true. The essence of startups has more to do with refreshing, innovative, problem-solving and scalable idea, and it's potential to grow.
Why traditional businesses are not called Startups?
Let's assume you got an opportunity of starting a business in food industry, and you got two options:
Option A. Setting up a restaurant, or opting for a franchise of a famous restaurant chain in a mature market?
Option B. Looking for the problem in the industry, and trying to solve it using a technology as means? For example, FoodPanda grown in leaps and bounds by making a platform which connects restaurants and consumers, making easier to order food online and get home delivered instantly.
If your option is A then you aren't a startup although your business is in initial stage, but if your option is B then congrats -your company is awarded with a fancy label called Startup. Because, the former is a well-known business strategy whereas a startup explores an unknown, untried or you can say a innovative business model, in order to disrupt an existing tried and tested business market.
A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed,"
-- Neil Blumenthal, cofounder and co-CEO of Warby Parker
If you've set up a tiny for-profit enterprise and are intent on it becoming huge enough to take over the world - even if you're working from your bedroom - you're probably a startup founder. Although, when a startup reaches it's maturity period, turning itself into a larger company with profitable business model, then ironically it's no longer called startup. For example, technology giant Amazon and Google started with their own business model, scaled themselves and occupied market which never existed before, but now they no longer called startups because they grown into a large company with profitable business model.
The most common factor all startups resonates is their ability to solve problem with the help of technology. "It stops being a startup when people don't feel as though what they are doing has impact." said Russell D'souza, co-founder of ticket search engine SeatGeek.
To define startups based on numbers, it goes like this any innovative business model with worth less than $500 million, having less than 100 employees, and $50 million revenue run rate (forward 12 months) then your company is still a startup.
What according to you is a startup? let us know your own definitions in our comments section, we would love to hear from you.
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