The world is witnessing a startup revolution featured by the emergence of new entrepreneurs and new verities of companies. New firms are utilizing the opportunities of technology and exploiting the chances of the digital world. They disrupt the existing business models, products and firms. We generically term these new and rapidly growing firms as startups.
According to management teacher and entrepreneur Bryan Guido Hassin, startup is a temporary organization used to search for a repeatable and scalable business model.
The term temporary is important as the goal of a startup is to develop into the next stage. This means end of its startup phase. According to Hassin, an early stage venture that can’t achieve the rapid scale-up is a small business is not a startup.
Startup is a company that is in the first stage of its operations and is designed to scale very quickly. It is this focus on growth unrestricted by geography which differentiates startups from small businesses. In this sense, a retail shop that started in a town recently doesn’t qualify as a startup. Practically, there are no hard and fast rules on defining a startup since revenues, profits, and employment numbers shift drastically between companies and industries.
Still founders illustrate that a startup is a culture and should not be measured arithmetically.
The ongoing startup revolution in various countries shows that there is a collective arrangement that promotes the startups. There are people, organizations and institutions that support and encourage the growth of startups. This supportive facility together is referred as startup ecosystem.
The startup ecosystem is comprised of people, startups in various stages of development and different types of organizations in a location; interacting as a system to create new startups. The supportive organizations or institutions are spread into different sectors- educational institutions, firms, semi-government entities, and social organizations.
Universities, funding organizations like venture capital funds, angel funds and other funding entities, support organizations (including incubators, seed accelerators, startup villages etc) are instrumental in bringing up startups. Large companies, research organizations, legal and financial service providers etc. also are critical contributors to startup formations.