What Is A Startup?

What Is A Startup

In recent years, such a phenomenon in business as a startup has become not just popular, but, perhaps, fashionable. They talk about a startup on television, books are being published about it. There appear new thematic resources on the Internet every day. Not everyone understands what is a startup and whether there are differences between a startup and a “new” company. Does the startup have any specificity? Or is this term used to refer to any promising initiative?

What is a startup?

A startup is a company that has just been created or is still in the process of creation.

This company has a certain business idea that needs to be developed and promoted, but its creators are still engaged in market research and the search for means for its implementation.

Sometimes startups refer to companies that are going to offer innovative products and services to consumers but are currently in the process of finding suitable business technologies and financial support. The future of such companies looks uncertain.

A startup can be any company, regardless of its field of activity. However, in some circles, startups are considered only initiatives in the field of high technology, Internet business and “related disciplines.”

When hearing a “startup”, people usually imagine Internet resources that stand out among their own kind. The most famous and successful startups are video hosting Youtube, the “people’s encyclopedia” – Wikipedia, as well as the largest social networks, such as Facebook. Many people think that these projects have gained such popularity because they were based on some unique ideas, but that’s not exactly true.

In other countries, the concept of “startup” is interpreted a little differently. The most impressive examples of startups are IT corporations with a “world name”: Microsoft, Apple, Google. The history of these giants really started from a small one – namely, from a small group of like-minded people, burning with the desire to realize their ideas.

A brief history of startup

The first mentions of the term date back to 1939. That year, San Francisco was filled with firms focused on IT-development. Students innovators David Packard and William Hewlett called their project a start-up, which grew into the largest company “Hewlett-Packard”.

Now, all Internet projects with a twist are called startups. This is due to the success of some well-known startups, such as:

  • Social networks Facebook, Vkontakte. At the same time, only the first one is really a startup (original idea and free niche). Another one is a successful copy that was only successful on the RuNet;
  • Wikipedia – ever-growing online encyclopedia;
  • YouTube – the largest database of videos;
  • Flickr – the most popular photo storage service;
  • Twitter – a messaging platform;
  • The concept of a startup applies to all areas of production not only to the field of IT.

Distinctive features

A startup has some features, which distinguish it from other “young” companies:

  1. High speed of development. The project starts in the shortest possible time, sometimes in less than six months.
  2. The presence of an innovative idea, which has never been implemented before. Novelty and utility should attract customers.
  3. Availability of funds. Startup attracts investment at the time of its inception. In this case. investors invest money in an idea but not in a successful company.
  4. Low chances of success. Only 30% survive for more than a year, and only 15–20% of them exist for 2 years or more. This is due to the high risk of unsuccessful implementation of a new idea.
  5. In most cases, the purpose of creating a startup is selling it by entering an IPO. There are cases when a startup manages to sell its project for millions of dollars (for example, Summly application).
  6. The presence of a team. A team of friends, partners or classmates with well-coordinated teamwork has a higher chance of success.

Stages of development

The startup project goes through 5 main stages during its development:

  1. Seed stage. Studying market, making up an action plan, preparatory activities, first negotiations with interested parties.
  2. Startup stage. The moment of launch and the first weeks of work is the most critical period in the life of a startup.
  3. Growth stage – the position of a startup in which it has already taken a stable position in the primary market and is confidently moving towards the achievement of the goals outlined in the business plan.
  4. Expansion stage. When the plan to conquer the primary market is almost complete and business expands to other markets, including by buying other startups, we can talk about expansion.
  5. Exit stage – the exit from the project of the initial investors in the person of venture funds, and the further sale of the project to strategic investors. In case of failure, the “exit” is the closure of the business.

As you can see, a startup is not just a young company. A startup is a company created by ambitious young people who are ready to promote their project at any cost. Since startups always lack funding, investors come to help, attracted by the opportunity to make money. Without them, the project has no chance.


safestartup.org is presented by the Institution of Occupational Safety and Health (IOSH), sponsored by Norwich Union and supported by HSE and Small Business Service.

Recent Blog List

The Role of Startups in Advancing Telemedicine and Health Tech

Definition of Telemedicine and Health Tech Telemedicine, at its core, refers to the delivery of healthcare services remotely, using digital communication technology for diagnosis, treatment, and monitoring of patients. This medical practice has revolutionized the healthcare industry by enabling healthcare professionals to provide care to patients in even the most remote locations. Telemedicine encompasses a broad spectrum of services, from teleconsultation, where video conferencing tools are used for remote doctor-patient consultations, to mobile health apps that allow patients to track their vital signs and monitor chronic conditions. It also includes electronic health records, which ensure the secure and efficient sharing […]

The Evolution of Consumer Behavior and Its Impact on Businesses

Historical Roots and Transformed Consumer Behavior Consumer behavior, the decision-making process, and the actions people take when purchasing goods and services, has a rich history that dates back to the emergence of markets and trade. The industrial era brought about significant changes in consumer habits, ushering in a transformation that continues to the present day. From the industrial era to now, several key factors have shaped consumer behavior: New Technologies: The introduction of advancements like mass production, telecommunications, and eventually the internet has redefined what consumers demand and how they demand it. Technological innovations have opened the doors to new […]

The Significance of Transparency and Ethics in Business

The Importance of Transparency in Business Operations A cornerstone of successful businesses, transparency in operations is essential for building trust among various stakeholders, including customers, employees, and investors. Firms that prioritize openness and integrity in their activities often enjoy enhanced public perception, increased customer satisfaction, and higher employee morale. The Role of Transparency in Building Trust Transparency fosters trust by demonstrating that a business is willing to share information openly, hold itself accountable, and operate with integrity. This open communication builds credibility and reliability in the eyes of stakeholders, making them more likely to engage with the company and support […]

How Startups Can Navigate the Challenges of International Expansion

Understand the Market Before expanding internationally, startups must first understand the intricacies of the local market where they wish to establish a presence. This entails conducting thorough market research on the target market, identifying consumer behavior patterns, and evaluating the competition. Being cognizant of these factors can help startups position themselves effectively in the market and capitalize on potential business opportunities. Conduct Thorough Market Research Market research is essential to comprehending the target market’s demographics, preferences, and purchasing patterns. Startups should gather data on the size of the market, its growth rate, and any potential barriers to entry. Analyzing this […]

The Role of Venture Capital in Business Growth

Defining Venture Capital and Its Evolution in the Business Landscape Venture capital is a unique form of private equity capital that is typically provided by professional investment firms or funds to early-stage start-up companies exhibiting substantial growth potential. In exchange for this essential capital, venture capitalists acquire equity ownership in the companies they invest in. This section will navigate through the rich history of venture capital, from its inception in the 1940s to its metamorphosis in the late 20th century, and its currently widespread influence across numerous industries. The roots of venture capital can be traced back to 1946 with […]

Crafting a Winning Pitch: Tips from Industry Experts

Understand Your Audience To create an effective and compelling pitch for your product or service, it is essential to have a deep understanding of the industry, the specific company or investors you are addressing, and their core values. Researching their past investments and projects can give you valuable insights into their interests and expectations. Analyze the Target Audience’s Market Segment One of the first steps towards understanding your audience is to analyze their market segment. Identify the problems or challenges that your product or service aims to solve by researching the industry, competition, and target demographics. This understanding will help […]

The Impact of Economic Policy Changes on Emerging Businesses

Definition of Emerging Businesses and Economic Policy Changes Emerging businesses, often characterized by their high growth potential and innovative nature, play a crucial role in driving economic growth and development. These businesses, typically small to medium-sized enterprises (SMEs), are founded by entrepreneurs with a clear vision to challenge existing markets or create entirely new ones. Their relentless pursuit of innovation and their ability to adapt to changing market dynamics make them key players in the global economy. However, the growth trajectory of emerging businesses is inextricably linked to the larger economic context, which is shaped by a constant stream of […]

Cybersecurity Best Practices for Startups in an Evolving Digital Landscape

Understanding the Importance of Cybersecurity for Startups In the rapidly evolving digital landscape, startups face numerous cybersecurity challenges due to several factors. These challenges include limited budgets, lack of skilled personnel, and difficulty in identifying potential threats. It is crucial for startups to address these issues and prioritize cybersecurity in order to protect the company’s most valuable assets, customer data, intellectual property, and maintain a strong cybersecurity posture. When startups neglect their cybersecurity, vulnerabilities in their networks and systems can lead to significant financial loss, a damaged reputation, and a decrease in customer trust. In the cases where a startup […]

Funding Options for Startups in Uncertain Economic Times

Navigating Economic Trends for Startup Funding In today’s economic landscape, startups face a formidable challenge: securing the funding necessary to launch and grow their businesses. The air is thick with financial uncertainty, casting a shadow over traditional venture capital channels and shaking the very foundations of the startup ecosystem. Global Economic Trends The recent economic landscape has been characterized by volatility. The aftermath of the pandemic has left a trail of economic disruption, leading to supply chain bottlenecks, inflation, and the whiplash of financial markets. Interest rates have risen in response to inflationary pressures, making capital more expensive and investment […]

How Startups Can Utilize Augmented Reality for Business Growth

Understanding Augmented Reality (AR) and Its Benefits Augmented Reality (AR) is a cutting-edge technology that has been making waves across various industries, offering a multitude of benefits to startups and established businesses alike. At its core, AR creates an interactive experience by blending the digital and physical worlds, superimposing digital content onto the real world, thereby enhancing the users’ perception of their surroundings. For startups, capitalizing on AR technology can provide a competitive edge by enabling the creation of unique and immersive customer experiences. The integration of digital information onto physical objects can make products more engaging, leading to increased […]