The term “startup” has been around for over a decade. It is usually used to describe a struggling young ventures or big tech companies – the so called unicorns and even the hip San Francisco apps and huge tech companies. But how do we actually define a startup?
According to Neil Blumenthal, co-founder and co-CEO of Warby Parker, “A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed”. So why do so many people decide to start or invest in one. Well, the answer is simple – tech industry. One of the rare industries that keeps moving forward at lightning speed. The most successful startups so far have actually been tech startups, unique website or app ideas that make our everyday life easier, and to think that just a few years ago they all started as a simple idea in some young entrepreneur’s head.
The startup industry has evolved so much that it now has its own language – a set of terms and expressions that helps define different aspects of this quite complex market.
Terms like accelerators and incubators are used to define collaborative programs, specially designed to provide different types of help to the newly formed ventures. For example, 39% of startups reported that being in an incubator provided them access to investors that were previously unavailable to them.
Each startup needs a lead investor, the person or company that is willing to be the first to invest money in an emerging startup. However, that same investor will be very interested in the prospects of his ROI – a return of investment.
A young startup also mustn’t forget how important market research is when deciding which new and unique product or service they want to provide to their customers. Using surveys, focus groups and field trials are all valid tactics for testing the market before launching a startup.
You will find that all these terms and many more are a part of everyday conversations among both well-established and up-and-coming entrepreneurs in the startup industry. And if you want to find out more, you can always go through our handy ABC of Startups slideshow below and brush up on the most important vocabulary needed for succeeding in the ever growing and changing world of startups.