A startup is a young company that is looking for a scalable business model and intends to conquer the whole world. But when are you a startup? In this article we explain our definition of a startup!
The definition of a startup is quite subjective. All the experts agree that a start-up is a young company, looking for a scalable business model and planning to conquer the whole world. There is, however, no fixed definition for a startup. To provide a clear picture, we explain the definition on the basis of 4 important characteristics.
Scalability is perhaps the most important characteristic for a startup. A startup aims to grow into a major player and who will conquer the world in no time. This hypergrowth is therefore characteristic of a successful startup. This speed is also expressed in the concept of burn rate. Burnrate is how much money a startup burns to gain market share as quickly as possible.
The business model of a startup is not yet established, startups are constantly testing and validating whether the business model is still scalable and repeatable. A startup is always looking for the right product market fit and will therefore first launch a minimum viable product to test whether the product works for the target group. When this product does not work in the market, the startup can make a pivot, a rigorous change in the business model.
IT startups are driven by technology and this technology can also help the startup to scale up quickly. This increases the chance of success when there is a technological component in the startup. A startup can use an existing technology or develop a new technology, but will only be truly successful if the business model is innovative and meets the needs of the market.
Startup entrepreneurs are very ambitious and work day and night to make their business a worldwide success. A 9 to 5 mentality is certainly not part of this. With startups it is all or nothing, you have to constantly work on it to eventually be able to build something big. When you are successful you will eventually grow into a scale-up.
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