Who actually is a ‘startup’?
India is certainly bubbling with lot of entrepreneurial activity. I am not surprised to learn that India now boasts of second largest entrepreneurial eco-system on the world just behind USA. One just needs to look up at platforms like facebook, meetup etc and there are hundreds of startup groups, regularly having meetings, lectures and conferences. I am in startup space for almost 18 years now and therefore can say it from my own experience that a decade back, there would be just one startup activity a month in city like Delhi where as there are now 10 startup events happening every day.
But who is a startup? Is every newly founded business a startup?
Large number of young entrepreneurs, I come across have idea and want to start. They think or assume that as a startup, it is necessary to work on technology, or take venture funding, or have some sort of “exit.”
Ninety percent of small businesses today are family businesses, which can be very successful, satisfying, and small by design. It’s a strategic decision to start a startup. If your passion is to change the world, or even dominate an industry, scalability is the only way to multiply and that is start of a startup.
Startup is a company which is designed to grow and grow very fast. The only essential thing is growth. Everything else we associate with startups follows from growth.
For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people.
If you write software to teach Tibetan to Hungarian speakers, you’ll be able to reach most of the people who want it, but there won’t be many of them. If you make software to teach English to Chinese speakers, however, you’re in startup territory.
Any other venture which is not scalable doesn’t fall in the definition of a startup though it may be a newly founded company.
Lacs of companies are being started in India annually. However only fraction of them meet the definition of a startup.
A startup has to make something it can deliver to a large market and idea is scalable fast. A venture that is labour intensive and staff intensive is certainly not scalable and this would be called a newly found company and not a startup.
A scalable idea is the one which can be automated to the maximum. Scalable idea means “hockey stick ” growth curve which attracts investors.
So, hope now you know if your business is a startup or just any other newly founded company.