What is a startup? Everything you need to know about it!

Learn everything about startups!

Ana Codeglia

04/24/2018 | By

What will we see in this post

The internet has changed every single aspect of our lives: the way we communicate, organize our daily routine, where we consume, and even the way we do business!

Before, the idea of starting a business or a company only seemed possible to those major players with a lot of capital. But the invention of new technologies enabled everyone to make their dreams come true through startups.

As a matter of fact, some big companies, like Amazon, and Facebook, started out as startups and, today, they became household names on entrepreneurship around the world.

But, what exactly is a Startup?

Let’s see…

‘Startup’ is a term used to define companies that are young or have just been created but have great growth possibility.

Unlike an SME, a startup is characterized by being a scalable business that grows in a very fast and efficient way.  

Small and medium business ventures that get in the market after investing a certain quantity of money, normally need to wait a little to start taking advantage of their own benefits. On the other hand, startups do the opposite, they get in the market to look for capital and use digital technology to grow and find financing.

Summing up, startups are characterized by:

Being young companies

That’s right, a lot of people make the mistake of bundling up all the small companies and labeling them as startups, but that’s not the case. Startups are characterized  by being young companies that have two options: evolve and become small and medium companies, or shut down.

Being Scalable

Scalability is one of the main attributes of startups. In other words, their ability of growing and generating revenue much faster than their costs.

Which means that a scalable business is the one that is capable of increasing its own production and sales without increasing its own expenses. So, its profit margin grows exponentially.

Startups, therefore, are not necessarily limited by lower profits because they are small, but quite the opposite, these companies are capable of generating higher profits.

Having a close relationship with technology

A startup is a company with a strong relationship with technology. In general, they are characterized by being a business filled with innovative ideas and great disposition to innovate and satisfy the market’s needs.

The new entrepreneurs and creators of Startups depend on technology to grow and find financing through internet platforms.

In fact, the Startup Ecosystem Report, carried out by Telefónica, shows that 80% of startups have an engineer among their founders.  

Having a low cost

Startups are characterized by having really small costs in comparison with the profits they obtain and those frequently grow exponentially.   

For example, companies like Amazon, Apple, Google or Microsoft started their work from home, or better yet, in their founders’ garages.

The main premise of startups is to keep costs low to start making profit as fast as possible.

Successful companies that started as Startups

Do you need a little bit of inspiration? Don’t worry, we’ll show you a few examples of entrepreneurial business or, even better, major companies that started out as startups and that, today, became a true source of  inspiration for many entrepreneurs. Shall we begin?


This car-sharing company that connects passengers and drivers via a mobile app started in 2008 with the idea that users should be able to hire a car with a single touch on their smartphones’ screens.

From that moment on, Uber became very popular in every continent  and, today, it has more than 15,000 employees all around the world with an estimated market value of roughly $50 billion.

More than that, Uber has expanded its business model to other ventures such as UBEReats, an app to order food delivery, bridging users and restaurants.


This company started out as a startup that would meet the needs of the market to connect property owners and travelers. Today, Airbnb is present in more than 192 countries, 35 thousand cities around the world and a privileged position on the ranking of successful startups at the moment.


Are you the kind of person who opens the Spotify app the second you turn on your computer, to listen to music? We have great news! Spotify started also started out as a startup, founded by two friends who love technology.

In 2008, Daniel Ek and Martin Lorentzon launched the first version of Spotify with the objective of enabling people to listen to music the way the wanted, where they wanted, with an invite-only access.

Today, Spotify has a catalog with more than 30 million songs, and more than 140 million users.

What do I need to start a Startup?

If you have enough inspiration, it’s time to get hands-on and start your own digital business. We’ll explain how to start a company or, how to actually start your startup. Let’s do it!

1. Think of problems that people need to solve

Startups want to solve problems and offer innovative services to the market. For example, Uber started because its owners felt frustrated every time they needed to hail a cab in the city of San Francisco.

Do a little research on the market, start looking around and opening your mind to think: which problems do people need to solve? Certainly, you’ll find a few business ideas that are worth your while.  

2. Search for creative and practical solutions for those problems

Startups, more than simply being characterized as profitable business, are also known for offering creative and different solutions for those problems.

It is not about looking for strange and unimaginable solutions, but thinking about simple strategies, that no one has put it into practice up to that point (or that no one has done it well enough).

3. Think about scalable solutions

As an entrepreneur, you need to find solutions with a solid potential for growth and that are capable of increasing the profits and the revenue without  the need of reinvesting in infrastructure.

For example, if you want to develop an app for smartphones, you’ll have the work to create it once and people will buy it and you won’t have to invest more money or work (only for eventual updates).

4. Use technology to offer the best service or product

Technology is here to make our lives easier – and you have to take advantage of it. Use all the technological resources at your disposal to offer the best service or product possible.

5. Set goals and deadlines

As with any business, a startup must have well-defined objectives and goals, in the short, medium and long term.

Whether you have partners or want to start a startup on your own, you need to take time to write down which objectives you want to achieve, and set deadlines for them. This is extremely useful to keep things in orders, and your focus on what is important.

6. Come up with a financial plan for your business

This is the moment both your feet must be on the ground. Be honest with yourself, and with your partners as well, if you have any. You have to set a budget for your startup, and define how much money each partner will invest.

If you definitely don’t have the capital to start your startup, keep on reading…

7. Seek crowdfunding

Not every entrepreneur is born a millionaire, this has been proven again and again. So, if you don’t have enough money to get your business idea off the ground, your can seek financing via crowdfunding.

This means that you post your business idea on a crowdfunding platform, such as Kickstarter or Indiegogo, to find people to back your initiative and pledge the necessary amount you need to start your business.

8. Put a team together

Most businesspeople don’t get rich alone. They have the support of many other people that help them realize their ideas.

Make sure you have a good team to start your startup. You don’t need a big group of people, but it’s important that everyone brings something to the project.

Remember that to reach your goals, you need to be consistent. Travis Kalanick, for example, failed twice before becoming the president of Uber!

Do you need more motivation?

Here are 10 golden rules to start a successful startup:

  1. Solve problems;
  2. Be creative;
  3. Put people’s needs first;
  4. Don’t be discouraged if things don’t go well at first;
  5. Focus on the big problems;
  6. Be late, but never too late;
  7. Start with what you have;
  8. Be surprising;
  9. Tell good stories;
  10. Be willing to face challenges.

Other ideas for people who want to become entrepreneurs

There are many different business opportunities for people who want to become entrepreneurs, especially in the online world.

Here are just some of them:

Start an ecommerce

Selling online may bring excellent results, without the need of a lot of capital to start.

The best thing about an ecommerce or an online store is that they are not expensive. Most platforms provide basic features for you to start, besides offering different options in customization.

In this article, you will learn everything you need to know about ecommerces.

Keep a blog

Being a blogger is an excellent way of making money online. And the best thing about it is that your chances of growing and expanding are great! You can make from $1 without having to increase your costs. All you need is a computer that is connected to the internet.

In this text, you will see all the opportunities blogging brings for you to make money from them.

Sell online courses or ebooks

Offering digital products such as online courses or ebooks is one of the most profitable businesses when it comes to cost-benefit. With little or even zero investment, you can make a lot of money, as this is a very scalable business.

To be successful in this kind of work, you need to be passionate and be knowledgeable about something that may interest other people. Creativity, organization, and, of course, basic computer skills are also required. Selling digital products is the best way of turning your knowledge into profit!


So, now you know what a startup is, the question is: are you ready to become a successful entrepreneur? We hope this text has given you a little push to your motivation, and led you to discover all the possibilities available for you to realize your dreams.

Now, it’s your turn. It’s time to gets hand-on. Remember, nothing ventured, nothing gained!

See you soon!