What Is a Startup?

By Matt Cynamon

What exactly is a startup? A startup is simply a business attempting to bring a new product or service to market. While startups are known for being young companies in the tech industry, the truth is that a startup can exist in any industry and can be any age.

The real difference between startups and traditional businesses is that startups operate in conditions of extreme uncertainty. For example, most startups operate with unfinished products, undefined business models, and unproven strategies. The whole journey of a startup is about bringing clarity to these questions and figuring out what the company and its good or service truly is. It’s that level of uncertainty, and figuring things out as you go, that gives startups their defining culture and what makes them such interesting places to work. The team is literally inventing the future on the fly.

Every startup passes through a series of stages or life cycles, which are marked by important milestones. Once these conditions are met — proof of concept, product-market fit, raising capital, scaling the business, and building out systems, explained in detail below — the company graduates from startup to mature business.

What Is a Tech Startup?

Tech startups use technology as a core part of their product, delivery, or marketing. For example, the taxi business is as old as the automobile itself. But companies like Lyft and Uber use technology — in this case phone apps — to make it easier for people to hail a taxi, provide directions to a destination, tip a driver, provide feedback, and more. Likewise, a few years ago if you wanted to watch TV, you’d need to install cable or a satellite dish. Now, on-demand video-streaming companies like Netflix and YouTube have led to over 22 million people getting rid of cable in 2017, upending a nearly 70-year-old industry. In both instances, companies leveraged technology to completely change the game in their respective industries. This is known as disruption, and all tech startups strive to be major disruptors.

The technical skills that are largely prized at tech startups include web development, data science and analysis, user experience design, product management, and digital marketing.

The 5 Stages of the Startup Life Cycle

While every tech startup’s journey is different, each typically follows this pattern:

  • Proof of concept. In the earliest of stages, founders build a prototype, or early version of a product, and try to establish whether there is any demand for it.
  • Finding product-market fit. Next, they will bring on a small team to refine the product and bring it to market. Product-market fit occurs when consumer demand proves there is a real need for the product.
  • Raising capital. As a startup graduates from each step, the founders will often need to raise money to fuel their growth. This stage may occur in several cycles (learn more in our guide to startup funding or our How to Get a Job at a Startup eBook).
  • Scaling the business. A scalable business is one that can perform the same or similarly regardless of how big it becomes. The process of scaling includes attempting to grow revenues exponentially while not breaking operations.
  • Building out systems. If the startup can achieve the necessary level of growth and stability, the company invests in building out the infrastructure needed to support a larger organization.

How to Launch a Career in Startups

Working in the startup world can be one of the most challenging, exhilarating, sometimes heartbreaking, and oftentimes fulfilling journeys of your life. But landing an opportunity at a startup is about more than luck. There are terms to learn, steps to take, and skills to grow to make you a candidate who stands out from the crowd.

In our eBook, How to Get a Job at a Startup, you’ll find a concise how-to guide for landing your dream job at a startup, through the knowledge of startup job-hunters, founders, and employers. Discover firsthand tips on how to break into a startup career, clear up confusing industry jargon, and learn about important resources that will aid you on your journey.

General Assembly believes that everyone should be empowered to pursue work they love. We hope you’ll find this book to be a helpful first step in getting there yourself.

Launch your career in startups.

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