What is a startup?

The short answer

A startup is a newly formed company built to test an idea, usually with the goal of growing fast and solving a problem in a new or better way. Startups often operate under a lot of uncertainty — they're still figuring out what product to build, who wants it, and how to make money from it.

What makes a startup different from a regular small business

Not every new business is a startup. A local bakery or a freelance design studio is a small business — it can be profitable and successful without ever needing to grow huge. A startup, on the other hand, is usually built with the intention of scaling quickly, often backed by outside investment, chasing a much bigger market.

Common stages a startup goes through

• Idea stage — spotting a problem worth solving.
• Validation — testing whether people actually want the solution.
• Building an MVP — a minimum viable product, the simplest version that proves the idea works.
• Early funding — raising money from friends, family, angel investors, or venture capital.
• Growth — scaling the product, team, and customer base.
• Exit — being acquired by another company, or going public through an IPO.

Why "tech startup" specifically

The term "startup" applies to any industry, but it's become closely associated with technology companies because software and apps can be built and scaled quickly with relatively low upfront cost compared to, say, opening a chain of physical stores. That's part of why tech startups get so much attention.