How Do You Define a Startup?

This post is a part of Bite Sized Wisdom series.

Although there are a lot of definitions of startups, startup in the end is Micro Small Medium Enterprise (MSME). It’s typically said that startups disrupt the environment, startups are technology-focused companies, startups are the harbringer of destruction to the old business empires.

There are a lot of ways people try to define startups, and there are disagreements on this. People in the tech startup community generally doesn’t like it when startup is defined as MSME. Because startup is a disruptor, and can be enabled to grow very quickly. For example, see how fast Gojek rises from a small company, to a unicorn right now.

But etymology-wise, startup is “a newly established business.” Although it can be modified to mean “company designed to scale very quickly”.

India is the only country that has properly defined what a startup is and with clear metrics:

  • Startup means an entity, incorporated or registered in India :
  • Not prior to seven years, however for Biotechnology Startups not prior to ten years,
  • With annual turnover not exceeding INR 25 crore in any preceding financial year, and
  • Working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
    Provided that such entity is not formed by splitting up, or reconstruction, of a business already in existence.
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