Companies have been born even before the dot-com bubble and the popularity of the internet. However, after the said bubble, terms like startup companies have began to rise up and took form. Question is, just what are these startups and what separates them from the other companies?
The term startup began their rise in popularity during, as said before, the dot-com bubble. That’s because during that time, a lot of company websites have created and used as the extension of their companies.
In a nutshell, define startups as newly formed companies where there are still many things to iron out, but regardless, the company already has the potential to market itself.
Startup companies are deemed as such when they’re running for not more than five years – you can’t call a company that already lasted for a decade a startup anymore. So in other words, what every startup has in common is that they’re practically new companies. Startups are usually paired with technology, but in definition, these companies can come from any field.
Who Can Make a Startup
Anyone can start their own startup company, but only select number do make it and succeed. All one needs to be a startup founder is the right mindset and an innovative product that people will love using.
Of course, those wouldn’t be enough. You’d need the right people, the right connections and of course, money. Regardless of how much you want your product to succeed, without any funds to support, it won’t go anywhere.
What Makes a Startup not A Startup
Startups are meant to grow fast and become profitable in short amounts of time. That’s why when they reach a certain amount of time since inception or surpass a certain profit threshold, we no longer call them startup companies.
Startups have to reach a 5-year goal before graduating from their startup status or they can reach a certain revenue amount for them to do so – there are other factors that can affect that status as well.
Russell D’Souza, Co-Founder of SeatGeek says:
“It (startup companies) stops being a startup when people don’t feel as though what they are doing has impact.”
If the company’s promoted innovative idea ceases to be innovative, fails to sell, or if the people within the company can’t propel it forward, it no longer meets the criteria of being a startup company.
A bigger company acquiring a startup will also cause it to cease being a startup; however, many founders would also disagree with this statement. That’s because when its acquired, it becomes part of it, but regardless, it will still remain as a startup company.
When a startup finally reaches maturation period or passed the revenue quota needed, then it becomes a startup graduate. A company that generates more than $20 million and has more than a hundred employees should regard itself as a startup graduate.
Startups are becoming the present in the face of business nowadays. Companies that support these startups, the incubators, have brought many startups into full fledged companies and are continuing to do so. Consumers have benefited from these startups the most as they have made their lives generally easier when they featured their innovative services to them.