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What is a startup and its characteristics?

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What is a startup

In the business world, we only hear one word: “Startup”. Indeed, the majority of this form of business has been extremely successful since there launch.

A startup is a young company that brings innovation to a given sector. It displays excellent development potential and often thrives online.

Currently, it’s easy to launch a startup even in a large market, thanks to technology.

Because of the internet, a new service or a new product may quickly reach a large number of customers, which translates into a strong brand.

What is a startup?

A startup is a new innovative company that is active in the technology sector. In most instances, startups operate in fields such as technology, communication and IT. So, by definition, a startup is a business in the development stage, but in practice, it’s much deeper than that.

Indeed, a startup is not a simple company, and the entire startup team share the same idea, values and common goals.

What sets a startup apart?

In the world of business, a startup is somewhat a specific category of business that has a particular characteristic.

First of all, their business idea is new and in most instances, a very risky one because it might not be a familiar one. Take for example blockchain, insurtech, fintech and more. This innovation puts the company at enormous risk.

It is for this reason that a startup must be agile and flexible to adapt easily and quickly to changes and developments because, in this sector, there are no present rules, nor standards to guide them. As a result, each startup evolves differently.

A startup is a temporary state, it is the early-stage phase. Then, after the signing of the first contracts, we start talking about the growth phase and eventually it becomes a giant in its field.

What distinguishes startups from mature companies is their great need for funding. Initially, a startup does not generate any income (or very little income at best), therefore, they need a lot of funding for the development of their services/products, recruitment, marketing and more. During the growth period, the startup’s financing needs become more important, because of its rapid growth. But in return, they have a very strong potential for profitability.

A startup may seem to make losses at the start because it consumes more than what it generates. However, in the end, this might change and it starts generating a lot of income.

The rise of startups on the internet

Nowadays startups are companies that have strong online visibility. They are completely operated on computers, the internet and the latest technologies.

These businesses concentrate all their energy on the internet because it is the space that has the most potential customers and provides better returns.

A startup can therefore be an online insurance company offering new technologies such as online procedures, mobile applications. It can be a home delivery business, an online banking platform, a mobile app and more.

Kossi Adzo is the editor and author of He is software engineer. Innovation, Businesses and companies are his passion. He filled several patents in IT & Communication technologies. He manages the technical operations at

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