Understanding startups: What is a startup?

If you ask what people think of a startup, many people still have the clichéd picture from the USA. They think of founders who work night after night in their parents’ garages on their nearest Facebook or Google. Combining ideas in such a way that something unique and unprecedented is created. Even if this idea is somewhat clichéd, there is much truth in it – a startup is an innovative, young company with limited financial resources that creates something completely new.

In return, they prove their high degree of innovation and flexibility on a daily basis This unique type of company foundation, in contrast to classic self-employment or trade, impresses with a special kind of corporate philosophy.

The startup spirit is unique. While classical business start-ups are often characterised by a traditional business field and business model, startup founders follow a vision. Looking to the future and the unknown.

Eric Ries, author of the bestseller “The Lean Startup”, describes startups as follows: “A startup is a man-made institution that wants to create new products or services in an extremely uncertain environment. Startups are by definition highly innovative.


A look into innovation management of start-ups

In order to better understand what is behind the type of company of the start-up and what distinguishes the innovation teams in it, one must better understand its processes, functionalities and special features. A start-up is a young company that cannot yet look back on a long company history. In contrast to already established companies or groups, they are still in the determination phase of their business model. They are usually characterized by an extraordinary concept and a high degree of creativity and stamina.


The annual German Startup Monitor, DSM for short, defines startups according to the following characteristics:

  • Startups are younger than ten years.
  • Startups are (highly) innovative with their technology and/or business model.
  • Startups have (or are aiming for) significant employee and/or revenue growth.

Although the term is often associated with companies from the technical sector, there are no limits to the possibilities of start-ups. Today, the spectrum includes growth companies from a wide variety of sectors and industries. For example, nutrition, education or research. But this false image of industry affiliation often discourages potential founders from becoming self-employed. You associate startups too much with the technical components.


The fact remains that anyone can set up a startup, it is not the industry that defines a successful young company, it is the idea, the vision. Looking at the life cycle of companies, it becomes clearer where startups are to be classified. In these defined phases, companies differ primarily in terms of their size, the potential benefits tapped and the type of management. Good and adaptive management is characterized in particular by recognizing the respective situation and adapting their management style to the corresponding requirements and challenges.

Alexander Pinker
Alexander Pinkerhttps://www.medialist.info
Alexander Pinker is an innovation profiler, future strategist and media expert who helps companies understand the opportunities behind technologies such as artificial intelligence for the next five to ten years. He is the founder of the consulting firm "Alexander Pinker - Innovation Profiling", the innovation marketing agency "innovate! communication" and the news platform "Medialist Innovation". He is also the author of three books and a lecturer at the Technical University of Würzburg-Schweinfurt.

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