Startup

Definition

A startup in business refers to a newly established company or organisation that is in the early stages of its development.

What is a startup?

Startups are typically characterised by their focus on creating and scaling innovative products, services, or technologies to address a specific market need or problem. These companies often operate in dynamic and rapidly evolving industries, and they usually have a high growth potential. 

Unlike traditional small businesses, startups are designed with the intent of achieving rapid growth and scaling their operations. This is often accompanied by the pursuit of significant market share and potentially global expansion.

Since startups are newly established, they have a limited operating history. This means they may not have a track record of financial performance or established customer base.

Startups typically operate with lean teams and resources, seeking to accomplish as much as possible with limited capital. They often prioritise efficiency and cost-effectiveness. Furthermore, startups aim to create business models that can be scaled quickly and efficiently. This means that the potential for growth is a fundamental consideration in their strategy.

Startups often employ an iterative approach to product development and business strategy. They build, measure, and learn from customer feedback to refine their offerings and business models.

Example of a startup

John and Sarah have an idea for a mobile application that helps users track their daily water intake and stay hydrated. They decide to turn their idea into a startup called “HydraTrack.”

1. Concept development: John and Sarah conduct market research to validate their idea and identify potential competitors.
2. Business plan: John and Sarah create a business plan outlining their startup’s goals, target market, revenue model, and marketing strategy.
3. Funding: To fund their startup, John and Sarah pitch their idea to investors, seeking seed funding to cover initial development and launch expenses.
4. Launch: After several months of development, HydraTrack is ready for launch. John and Sarah release the app on the Apple App Store and Google Play Store, targeting health-conscious individuals looking to improve their hydration habits.
5. Expansion: As HydraTrack grows, John and Sarah explore opportunities to expand their product offerings and reach new markets.

In this example, John and Sarah’s startup, HydraTrack, demonstrates the journey of a tech startup from ideation to launch and growth.