Is Your Company Really a Startup?

Six Key Criteria

The term “startup” is often used to describe new businesses. But not every new company fits the true definition of a startup. Startups are distinct from traditional small businesses in their goals, strategies, and operations. So, how can you tell if your company is genuinely a startup? 

Here are six key criteria that indicate your company is a startup. 

1. Science or Technology-Based Solution

At the heart of most startups is a science or technology-based solution that addresses a specific problem in a novel way. Unlike conventional businesses that may rely on existing models or services, startups often leverage cutting-edge technology or scientific breakthroughs to create new products or services. For example, a tech startup might use artificial intelligence to automate complex tasks, or a biotech startup could develop a groundbreaking medical treatment. If your company isn’t grounded in a science or tech-driven solution, it might be more of a small business rather than a startup.

2. Focus on Innovation

Innovation is the lifeblood of a startup. This means not just introducing something new but also continuously iterating and improving upon it. Startups thrive on disruption, seeking to change the status quo with fresh ideas and unique approaches. They are typically agile, experimenting with different strategies to refine their product or service. If your business model revolves around pushing boundaries and challenging existing norms, you likely have the spirit of a startup.

3. Ambitious Growth Plan

Startups aren’t just content with steady growth; they aim for rapid expansion and market dominance. This ambition is a defining characteristic of startups, setting them apart from traditional businesses that may be satisfied with modest growth. A true startup has a clear vision for scaling quickly, often entering multiple markets within a short timeframe. This ambition is driven by the desire to capture significant market share and position the company as a leader in its field.

4. Highly Scalable

Scalability is another hallmark of a startup. A scalable business model allows a company to grow without being constrained by increased costs or operational inefficiencies. This often involves leveraging technology to automate processes, reducing the need for a proportional increase in resources as the company expands. For example, a software company can serve millions of users with minimal incremental costs once the initial product is developed. If your company can’t scale efficiently, it might struggle to achieve the explosive growth expected of a startup.

5. International Demand for Your Solution

Startups often think beyond local markets, aiming for global reach. They design their solutions with international demand in mind, allowing them to tap into diverse markets around the world. This global mindset is crucial for startups that want to achieve massive scale and impact. Whether it’s through direct sales, international partnerships, or global marketing strategies, a true startup looks to make a mark on a worldwide stage. If your company is focused solely on a local or regional market, it may not fit the startup mold.

6. Investors That Invest for Profit

Finally, the type of investors your company attracts can also indicate whether it’s a startup. Startups typically attract venture capitalists or angel investors who are looking for high-risk, high-reward opportunities. These investors are not just interested in steady returns; they are betting on your potential to disrupt markets and achieve exponential growth. If your company is backed by investors who share this vision and are willing to support your ambitious goals, it’s a strong sign you are indeed running a startup.

Conclusion

Being a startup is more than just being a new business. It’s about having a disruptive, scalable, and ambitious vision that leverages science or technology to solve problems on a global scale. If your company meets these six criteria, you’re not just a new business—you’re a startup ready to change the world.

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About the Swiss Startup Association

The Swiss Startup Association (SSA) is the umbrella organisation and the voice of Swiss startups. As a sector-independent non-profit organisation, the SSA gives startups a strong voice vis-à-vis politics, business and the public and works to improve the conditions for startups in Switzerland.
Beyond its political engagement, the SSA fosters a community for startups, recognizing the unique challenges they face. Through networking opportunities, educational sessions, and practical services, the SSA collaborates with industry partners to offer tailored support and valuable resources to guide founders on their entrepreneurial journey.

Join the Swiss Startup Association! Tap into our member benefits, the comprehensive Investor List and get full access to our events. By becoming an SSA Member you enjoy discounted tickets to our Big Founders Dinners and the SSA Founders Day.