What’s the Definition of a Startup?

We say it, you say it, everyone says it. But what exactly does “Startup” mean? We pull out our favourite definition and explain what’s so great about it in this quick, dictionary-like blog.

Last night (28/8/14) our Investment Director, Ilya Frolov, sat on the panel of the excellent “That Start Up Show”. As soon as that’s up on their YouTube channel, we’ll be sending out links via our Twitter and Facebook pages. Until then you can dig into the first episode where you’ll be treated to an all too brief discussion about the definition of the term “startup”.

We thought this was a great topic, and one we wanted to expand on, but rather than weigh in with our own (admittedly extensive) definition, we thought we’d let Eric Ries do the talking. The Yale academic and Silicon Valley entrepreneur is widely credited as a pioneer of the lean startup movement – qualification enough, I’m sure you’ll agree. Eric succinctly says: 

“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”

For me, the most interesting part of that definition is the lack of definition. It’s not exclusive to tech. It’s not explicitly about scalability. It’s not about the industry or sector. For Eric, a startup is any institution (so NFPs are included) that provides a novel product or service without the assurance of success. That’s a net many organisations full under. 

I love that this definition is so unifying. The startup community in Australia is like one big family, just take a look at the next few startup events you attend – you’ll see the same faces time and again. But there are always newcomers to the scene, and welcoming them into the fold with no exclusions is what will help our startup scene to grow into a healthy, self-nourishing environment.

With eclectic inspirations leading to the diverse startups we encounter on a daily basis, it’d be all to easy to divide each group off into smaller, weaker pockets and specialisms. But for Australia to get together and sustain its under-supported (at least from a legislative perspective) startups, we need to build a united culture. 

That’s just one of the reasons (alongside the educational aspect and just sheer fun of it) why we love That Start Up Show, and are proud to support it. Nurturing a richly cultured community will only force Australian startup further into the public eye, so legislators, investors and the general population have no choice but to sit up and take note.


There’s a great Quora discussion about the definition of a startup that digs deeper into this topic, lending the voices of experts to questions like: “when does a startup stop being a startup?” If you want to find out more, or just have want to have your say, head on over there and add your voice to the conversation.