What is a Startup
Sophia lies on the couch as watching reels on Instagram. She lazily stretches as she yawns loudly yawn. It is the second week into the summer vacation and she’s already bored! Two Whatsapp beeps bring back her enthusiasm. It’s her close circle of friends arranging an outing!
Yaay! She yells out. Scrolling through the long chat, there are those new summer dresses Daniella is sharing from Pinterest. Daniella is a clothes hoarder!
On Pinterest, she finds loads of ideas with which she can play around with fashion. After all, she is the Diva of the group. Sophia jumps up cheerfully, time to get ready for the outing.
The scene we have just displayed is a snapshot of a very familiar morning. Not only for teenagers but for many of us. We might lay there skimming through apps, which our phones loaded with tons of. But, do we know the stories behind those apps? Apps that are quite essential to us now, making billions of dollars, have started before as Startups and became vital ones that have shaped a big part of our lives.
Since we have brought up the word “Start-Up”, let’s lay some important foundations regarding this term.
What is a Startup?
Startup and entrepreneurship are two terms that are being interchangeably used over the past few years. Therefore, it is important at the very beginning to define what a startup is.
“A startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market1.”
As much as the definition seems simple, a startup is much more demanding and complex. We will learn more about startups and their associations as we continue through. Let’s look at some statistics.
What does data have to say?2
- About 90% of startups fail
- 10% of startups fail within the first year
- Failure is most common for startups during years two through five, with 70% falling into this category3
- The startups’ failure rate is roughly the same for all industries
- The highest five-year survival rate for new businesses is mining at 51.3%
- Founders of a previously successful business have a 30% likelihood to succeed in their next venture
- 82% of successful business owners stated that they have the skills and proven experience to run a business with limited cash flow
- 14% of startups fail for disregarding customer needs
- Founders who failed before have a 20% chance of success, while newcomers have an 18% chance of success.
So, startups don’t simply flourish and bloom.
1Amy Fontinelle, Investopedia 2020, Startup, Accessed 10 June 2021, https://www.investopedia.com/ask/answers/12/what-is-a-startup.asp
2Startup Failure Rates, Embroker, Accessed 20 June 2021, https://www.embroker.com/blog/startup-statistics/#ss-3
3 Jack Steward 2021, Accessed 20 June 2021, https://findstack.com/startup-statistics/
For more about this topic, download our latest book " Startup Day - A Journey in Entrepreneurship " for FREE:
