What is a startup? Definition, Types of Startups, & More

Startup Definition

A startup is just founded, a young company established by one or more passionate people (i.e., entrepreneurs) having years of domain expertise or strong ideas that can bring a huge change in society by offering a unique and valuable product or service. The startup aims to do something unique with their innovation and develop strong growth strategies quickly.

A startup is just founded, a young company established by one or more passionate people (i.e., entrepreneurs) having years of domain expertise

What is a Startup?

Startups are newly incorporated companies with unique product or service ideas to disrupt the industry with innovation and ideas. Startup companies are products or innovations that aim to solve problems not yet solved by existing companies. They have strong motivation and willpower to think outside the box and do business for the entire industry. Therefore, startups are often called disruptors.

Even if you don’t know much about startup companies, still you are familiar with many startups in Big Tech-just think of Amazon, Google, and Apple.  

What Are the 5 Types of a Startup?

Below are some major types of startup companies that you may find these days. 

1. Small Business Startups

These are the startups that are mostly self-funded by regular people. They grow at a good pace and have a professional website along with a business email. However, small business startups may not have a mobile app, as having one can be costly and unnecessary. Examples of small business startups are grocery stores and bakery shops. 

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2. Scalable Startups

Most tech startups often fall into this startup category as they easily find their way to the international market and have great growth potential. Although, they also face tough competition to survive and generate regular customers for a stable revenue stream. Setting up and running a tech business requires big capital support. These companies mostly contact investors to raise funds at seed and upcoming levels. Google, Facebook (Meta), and Uber are great examples of scalable startups. 

3. Social Startups

Non-profit organizations and charity societies fall under this type of startup. While most startups are launched to earn money, social startups aim to serve people and do something good for other people and the environment. Code dot Org is one of the perfect examples of a social startup that managed to raise $60 million from top companies like Google and Meta.

4. Buyable Startups

Many startups are established to start from scratch and build some promising market value to sell it later to bigger companies. Many tech giants like Amazon, Adani Group, and Unacademy buy buyable startups to gain short-term and long-term benefits. These companies keep looking for buyable startups with feasibility businesses and attractive portfolios along with a product that adds real value to customer’s life. 

How Does a Startup Work?

Mostly startups and companies have slightly different ways they function. Both have a group of people who work together to develop and upgrade products and sell to customers to generate revenue. However, well-established businesses duplicate the work processes that they have done in the past. For example, a well-established restaurant may open its franchise in another location; this way, they expand its business. 

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On the other hand, the startup aims to develop a fully new and unique product that solves the pain points of customers that established companies have not solved yet. They are early-age companies, having fresh minds, innovation, and dedicated teams who work beyond the level to drive great results. The already-established companies may be successful or have achieved a significant level in the market, but startups have yet to prove themselves. 

So, how does a startup work? Startups also work the same as the company, but they follow innovation to offer a better and unique solution to the target audience. It has a limited number of teams who may perform multiple job responsibilities and work for extra hours. They have the motivation and young spirit that makes them different from old companies. 


Startups are early-age companies established to bring innovative solutions that help customers and help them generate revenue. There are many types of startups, such as scalable, buyable, and small company startups. However, startups are mostly self-funded at the initial stage. Later, they approach some promising investors to raise funds and grow their businesses. 

Hopefully, now you have understood startups' meaning, the types of a startup, and how startups differ from companies. If you find this read useful, please share it with your friends. You can also go through other articles we have published here. 

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