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Startup : Meaning, Importance, Process, Pros & Cons

Startup : Meaning, Importance, Process, Pros & Cons


In this era, the idea of startups is on a rise. Each and every day we hear about success stories of new startups. This leads to the rise of a question in our minds of what it feels like to establish a startup or be associated with the same. As per Neil Blumenthal, the co-founder and co-CEO of Warby Parker, “A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.” A startup company (startup or start-up) is referred to a newly emerged venture, fast growing business which aims in meeting a marketplace need by offering an innovative product or service to the society. Generally, a startup is a company, a proprietorship concern or a partnership firm designed to quickly develop a scalable business model.

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In order to set up a start-up, one needs to be clear regarding what he/she wants to do. A person willing to establish a start-up can consider the points listed below.

1) Setting up one’s goals and objectives.

2) One should be clear on how much he/she is spending on what?

3) Vision and mission statement should be made clear.

4) Setting up of the  inventories.

5) A catchy name  and logo should be given to the business and the start-up is to be registered.

6) An individual  should connect with like-minded persons on LinkedIn.

7) Making a partnership with or hiring a few sales and marketing professions.

8) An entrepreneur needs to hire a few interns and fresh graduates for a limited period.

9) A start-up founder should look for angel investors or venture capitalists for financing his/her business.

10) One can look for a small office initially, which can be upgraded in the future.


A few reasons for establishing a startup entrepreneurship are listed as follows:-

1) Innovations –They are the most suitable form of executing inventions. They contribute to a rapid development of modern technologies and the area where they operate.

2) Employment opportunities – In the long run, startup companies create a large number of new jobs and make a contribution to the country’s economic growth. They are the best business set up for employing university students and fresh  graduates.

3) Bringing new competition into the economy – Startups are the most dynamic economic organisations in the market since they provide additional competitiveness to country’s economy.

4) Promoting the research-innovation system – High-tech as well as knowledge-based service startups help in the promotion of research and development in the economy. Meanwhile, startups also encourage interns and researchers to execute their ideas.



Startups will always have these four strengths against big businesses:-

1) Agility: Startups are generally young and formless for the first few years. One may have a great business plan and an operations strategy which he/she can implement as per his her discretion. In a startup, an entrepreneur can do whatever he/she wants to.

2) Team chemistry: In a startup, the co-founders have no option but to make bonding with the other members of their team. The co-founders have to work closely together  with  the team members have a natural chemistry in their professional relationships.

3) Less bureaucracy: In the case of startups, everything is carried out in an informal way, unlike big companies. formalized. Decision making is easier in a startup.  When a decision is to be made, it does not need to undergo rigorous evaluation by multiple people. Bureaucracy is almost absent in a startup.

4) Competitive pricing: Pricing of the products and services is a difficult issue to tackle for the established companies. Each business organisation must consider different factors when it hast to decide about  pricing . Startups enjoy the advantage  over the established business houses when it comes to pricing.\


There are some risks involved in startups too:-

1) Uncertainty: The startups may fail to be a going concern after doing business for a few months or years. The biggest risk for a person to work with a startup is the level of uncertainty. No one knows what the future of the business will be. The pressure of job security in a startup  is very high.

2) Lack of structuring: Startups are not well structured or adequately organised as business entities. Everything of a startup is in the testing phase, therefore, nothing is certain. Nothing is clear whether it is team structure, job responsibilities or business procedures.

3) Low remuneration: The startups are in the initial phase of their operations . So they are in a position to pay handsome stipend or salary to their team members. Extra benefits, perks, allowances of the employees would be dependent on the kind of  business performance that is being achieved by the startups.

4) Long working hours:
Whenever one starts something new it demands more effort and time in the initial stage. In early days a founder or a co-founder will have hectic working schedules and maybe no holidays at all. The entrepreneurs may face difficulties to maintain work-life balance during the initial days of the startups.


A startup is a wonderful form of entrepreneurship. It plays a great role in contributing towards the growth of the economy of a country in various ways. Nowadays, various startups in India are contributing to the GDP of the nation to a substantial extent. Working with a startup is a decision that one needs to make after considering both advantages and drawbacks. If an individual thinks he/she can perform well under pressure and wants to grow in his/her career with the growth of the organisation, then a startup is an ideal place for such person.


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About the author

Rajarshi Bose

I am scorpion by birth, very passionate about art, quite humorous by nature, accounting & finance student, financial trader by hobby and last but not the least, lover of sports.

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