A startup is an innovative and newly created company with high potential for growth. These companies are in their first stage of development and are also innovative. So they have both a high risk of faillure and an enormous potential of benefit.
Another good complementary definition is offered by Steve Blank : “A startup is a temporary organization designed to search for a repeatable and scalable businessmodel”:
- Temporary organization: a startup always, sooner or later, finishes its launching phase and if it is successful, it leads into the growth phase and if not … it shuts down (or even worse if its founders decide not to close it, then it becomes a zombie startup). But even the last case, it is no longer a startup because it is no longer in its launching phase .
- Searching for a repeatable and scalable business model: we are talking about startups in the XXI century, when the pace of change accelerates and innovative companies have to deal with a highly uncertain environment. Entrepreneurs are hardly sure of their business model when launching a startup. They do create their startup to find the right business model, the one which generates recurring revenues (repeatable business model), and also the one which is able to grow and with revenues growing proportionately more than their expenses (scalable business model).
Some authors even say that a startup is not a company, is an experiment or a hypothesis
Finally I like to emphasize that although the concept remind us very often of dot.com companies, there are startups in different industries.
- Related issues: prototipe, concept test, test the business model, high mortality.
- Photo: KLAQ Ballon Fest 2012 by Alex Briseño. Flickr
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