What is a startup?

People have different ideas about what a startup is. Is it constrained to technology product companies, or do technology services companies also count, or even professional services or bricks-and-mortar stores?

A useful definition given by Steve Blank is that "A startup is a temporary organization designed to search for a repeatable and scalable business model". This is the definition adopted by Quora and Wikipedia and highlights a few key characteristics:


 * The aim is to create a scalable business, meaning marginal cost approaches zero. Technology product companies are normally scalable, because the cost of having an extra client is tiny and decreases as you scale out. In contrast, consultancy businesses aren't scalable, because it costs you a large fixed amount to serve each additional customer.


 * A startup isn't a real business. Real businesses know how to make money; startups are still figuring that bit out.


 * The fact that there isn't a known business model implies that it is probably a technology company, bringing some new technology to bear on a problem or market for the first time.


 * As a "temporary organisation", a startup may not even be a legal entity. It may simply be a few friends working on a project together, and not be legally incorporated.

Other Definitions

 * Eric Ries: "A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty."
 * Paul Graham: "... a startup is a new business designed for scale." Another: "Startups usually involve technology, so much so that the phrase 'high-tech startup' is almost redundant. A startup is a small company that takes on a hard technical problem."

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