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Startup Are: Definition, Function, and Types

Startup seems to be the most trendy word, for now, there is a lot of search information related to the startup. For years investors have treated startups as small businesses. This is a real problem because there are very large conceptual and organizational differences between startups, small businesses and large companies.

A startup is an emotional roller coaster that can result in major failure or success, after which the total bank account of a person can increase or decrease dramatically. 

The person behind the startup is the founder, a person who is often very intelligent, a bit crazy who thinks normal work 9-5 is boring and tricked into believing that he can change the world by working tirelessly in front of a computer screen. This endless work is known to have eroded several years from the life of a founder. But it can be very beneficial both emotionally and financially for those who pursue it.

Definition of Startup

There may not be the most correct understanding of a startup. Many startup founders believe that startup is a state of mind. That's not a word that is limited by the number of years in the business, or the amount of income that the business earns.

Warby Parker Neil Blumenthal defines a startup as a company that works to solve problems where the solution is unclear and success is not guaranteed.

According to Steve Blank, a startup is "a temporary organization designed to look for repeatable and scalable business models", while small businesses operate according to a fixed business model. While the popular understanding of startup is "A technology company with less than 100 people".

Startup Function

For startup founders this concept means the following three main functions:

  1. To provide a vision of a product with a series of characteristics
  2. To create a series of views of business models regarding customers, distribution, and corporate finance.
  3. To understand whether the model is correct, based on customer behaviour, as predicted by your model.

Types of Startup

Steve Blank divides startups into six types. Following is an explanation of the types of startups.

1. Lifestyle Startup

Lifestyle entrepreneurs live their chosen life while working for anyone but themselves. In Silicon Valley, such professionals are freelancers or web designers, who like their work because of passion.

2. Small Business Startup

They are, who run their own businesses to feed the family. Small business entrepreneurship is not designed to develop.

3. Scalable startup

Google, Uber, Facebook, Twitter are just the latest examples of startups that can be scaled. From the beginning, the founders believed that they would change the world.

Such startups employ the best and the brightest. They are always looking for repeatable and measurable business models. When they found it, they began looking for more venture capital to improve their business. Often startup groups that can be scaled together in innovation groups (Silicon Valley, Shanghai, New York, Boston, Israel, etc.)

4. The startup that can be purchased

Over the past five years, startups offering Web solutions and mobile applications have been sold to large companies. This trend is becoming increasingly popular. Their goal is not to build a company that is worth billions of dollars but to be sold to a larger company with a fair amount of money.

5. Large Startup Companies

Large companies have a limited life duration. Changes in customer preferences, new technology, legislative issues, new competitors create pressure, forcing large companies to create new innovative products for new customers in new markets (for example - Google and Android).

6. Social Startup

They are excited and driven to make an impact. However, unlike startups that can be measured, their mission is to make the world a better place, not for the sake of wealth, but for an idea.
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